Uganda recently unveiled a sh70 trillion budget, with the country’s finance minister allocating more than double to the oil and gas sector compared to the previous years.
The increased allocation to the oil and gas sector comes as the East African country homes to start commercial production of oil in the very near future.
Finance Minister Matia Kasaija said the country’s economy will grow by 7 percent in the financial year 2024/25 with the backdrop of oil production.
Other drivers of growth will include expansion of exports, increase in tourism activities, agro-industrialization and light manufacturing, private investment growth supported by foreign direct investment, remittances and a stable macroeconomic environment.
The jovial minister also hinted that the economy will be driven by investment in industrial parks, construction and maintenance of roads and bridges, rehabilitation of the Meter Gauge Railway and commencement of the Standard Gauge Railway, expansion of information, communication and technology infrastructure, and provision of reliable and affordable electricity.
“Uganda’s economic outlook is positive and optimistic. The economy has remained resilient and has fully recovered from a myriad of internal and external shocks,” Kasaija said.
“Next financial year, the economy is projected to get back to Uganda’s steady-state growth potential of between 6.4 and 7 percent, and double digit over the next five years.”
Uganda’s economy grew 6% in the current financial year compared to 5.3% in 2022/2023.
Oil and gas sector
Kasaija provided sh920 billion for the oil and gas sector, while promising that commercial production is on schedule for next year.
According to the minister, “Uganda’s Upstream Petroleum Project has advanced with drilling works in preparation for production while the East African Crude Oil Pipeline (EACOP) Project is on track with 500 km of pipeline delivered in Tanzania.” The target is to lay 100 km per month.
“The planned 60,000 barrels per day Refinery in Kabaale, Kikuube District, is progressing well. The land for the project sites and associated terminal has all been acquired by Government,” he said.
Already the government is working with Alpha MBM Investments from the United Arab Emirates (UAE) to build the Refinery.