Speaking at the Stanbic Bank Economic Insights Symposium, Legilisho a Senior Economist at Stanbic/Standard Bank projected that the oil and gas sector will become a key driver of economic growth, enabling the government to offset its debt burden and reduce reliance on gold, coffee, and foreign aid.
Revenue Projections
The oil and gas sector is expected to generate substantial revenue, creating a steady inflow of foreign currency into the country. This will help narrow the current account deficit for the Central Bank, according to Legilisho. With an estimated 6.5 billion barrels of oil in place, Uganda’s oil and gas sector is poised to become a significant contributor to the country’s economic growth.
Economic Benefits
“The oil and gas sector will provide a stable source of budget financing, reducing the country’s reliance on foreign funders,” Legilisho said. Additionally, the sector will also create new opportunities for economic growth, employment, and infrastructure development.
“With the right policies and continued investment in key sectors, Uganda is well-positioned for sustained growth and regional economic leadership,” he noted. Uganda’s oil projects are at various stages of development. The key projects include:
Kingfisher Oil Field: Located in the Kikuube District, the Kingfisher Oil Field is expected to produce 40,000 barrels of oil per day.
Tilenga Oil Field: Located in the Buliisa District, the Tilenga Oil Field is expected to produce 190,000 barrels of oil per day.
East African Crude Oil Pipeline (EACOP): The EACOP is a 1,443 km pipeline that will transport oil from Uganda to the port of Tanga in Tanzania.
Oil Refinery: The oil refinery, to be built in the Kabaale area of Hoima District, will have a capacity to process 60,000 barrels of oil per day.
Challenges and Opportunities
However, Legilisho noted that the government must secure funding to invest in the oil and gas sector, as well as other projects like the East African Crude Oil Pipeline (EACOP), the oil refinery, and the Standard Gauge Railway. He advised that to achieve this, the government should explore new funding programs from sources like the World Bank, the International Monetary Fund (IMF), and other international lenders.
Uganda’s oil and gas sector is expected to play a crucial role in driving economic growth and development. With substantial revenue projections and numerous economic benefits, the sector is poised to transform the country’s economy. However, the government must address the challenges and seize the opportunities to ensure the sector’s success.