The political economy of oil and gas extraction: imperatives for fiscal and legal regimes in East Africa

The theme for the 8th East African Conference and Exhibition held from 7th to 9th June 2017 in Bujumbura was, “East Africa – An Emerging Hotspot for Oil and Gas Exploration, Infrastructure Development and Commercialization”. Various literature speculating the returns from oil and gas in East Africa have characterized the region as a growing hotspot and having the ability to attract investment that will assist the region not only to address the deplorable poverty levels but also to reduce the debt burden currently on the regions shoulders. But what are the actual social, political, economic, cultural and environmental implications of this? This contribution examines the Production Sharing Contracts (PSCs) that result in the models for sharing production as envisaged by the three East African Countries of Kenya, Uganda and Tanzania. Against these models the study unearths the interests, motivations of investors against those of the local communities that lead to the social, political, economic, cultural and environmental paybacks as well as the drawbacks in order to arrive at an aggregation. The study argues for a balanced decision making model for establishing/calculating these paybacks and drawbacks. This calls for a rethink of the fiscal and legal regimes in the region. The study is primarily based on secondary data.