Uganda's President Yoweri Museveni has publicly denounced a petroleum import deal between Kenya and Gulf states, describing it as a "monumental scam" that has negatively impacted Ugandan taxpayers. The deal, initiated in 2023, involves Kenya and Gulf suppliers like Saudi Aramco, ADNOC, and ENOC. Museveni's comments have sparked a heated debate about the arrangement, which he claims has led to high domestic fuel prices in Uganda due to global energy shocks and supply bottlenecks.
The Government-to-Government (G-to-G) petroleum import framework aims to ease foreign-exchange and dollar liquidity pressures in Kenya. President William Ruto hailed the deal as a strategic move to save Kenya's economy, describing it as a climax of "akili tupu" (pure brainpower) and an innovative masterclass. However, Museveni argues that the arrangement effectively serves as a government-to-middlemen scheme that swindles taxpayers. The contracts under this deal extend through 2027 and 2028.
Museveni made these remarks while commissioning a 320-million-litre Kampala Storage Terminal in Mpigi District. He revealed that he had not been aware that Uganda was sourcing petroleum products through intermediaries in Kenya until an unnamed Kenyan senator raised the issue with him. The Ugandan leader expressed concern over Uganda's procurement arrangements and is now seeking alternatives for sourcing petroleum products more directly from bulk suppliers.
The deal between Kenya and Gulf states has not been well received by Ugandans, as most of their petroleum is imported via Kenya. Museveni's comments have prompted reactions from Kenyan politicians, including Eugene Wamalwa, leader of the Democratic Action Party of Kenya (DAP-K). Wamalwa has threatened to arrest those involved in the deal if his party wins elections, vowing to revisit the G-to-G arrangement.
In 2023, Kenya entered into agreements with major Gulf-based suppliers, including Saudi Aramco, Abu Dhabi National Oil Company (ADNOC), and Emirates National Oil Company (ENOC). The Kenyan Treasury said the arrangement aimed to ease pressure on foreign-exchange reserves and provide greater stability in petroleum supply. The system allowed nominated Kenyan oil marketing companies to handle the local distribution of petroleum supplied by the international firms.
Museveni's criticism of the deal has sparked a diplomatic row between Uganda and Kenya. The Ugandan leader's comments have also raised questions about the impact of the deal on the East African region's fuel prices. As Kenya and Uganda explore alternative procurement arrangements, the fate of the G-to-G deal remains uncertain.
The controversy surrounding the oil deal highlights the challenges faced by East African countries in securing affordable fuel supplies. As the region navigates complex global energy dynamics, governments must balance their economic interests with the need to ensure stable and affordable fuel supplies for their citizens. The debate over the Kenya-Gulf states oil deal is likely to continue, with implications for the region's energy landscape.
Key points
- Museveni criticizes Kenya's oil deal with Gulf states as a "monumental scam".
- The deal aims to ease foreign-exchange and dollar liquidity pressures in Kenya.
- Uganda is seeking alternative procurement arrangements for petroleum products.
