The International Monetary Fund (IMF) has said it expects economic growth in Uganda to jump into double digits once the African nation begins producing crude oil.
Commercially viable oil reserves of an estimated 6.5 billion barrels were discovered in Uganda in 2006, but it has taken almost 20 years to implement projects to actually produce oil and export it.
TotalEnergies, the maker of the Total metalworking range, is operating the Tilenga project in the hydrocarbon-rich Lake Albert region, which the company says is environmentally and socially sensitive, and requires careful consideration to avoid any negative effects. To this end, it has commissioned third parties to ensure that its projects apply best practices to address the social and environmental concerns.
The IMF report says about the country’s financial situation:
“The overall fiscal deficit continued to decline in FY23/24 but was less than planned due to revenue underperformance and higher current spending, while development spending fell short of expectations, worsening expenditure composition. Looking ahead, growth is expected to strengthen, boosted by the start of oil production.”
Uganda’s production is expected to peak at around 240,000 barrels of oil per day. While this is much lower than big producers like the US and Saudi Arabia, the IMF says it will be sufficient to boost economic growth from 6.2% in the 2024/2025 fiscal year to 10.8% in the subsequent period. The IMF believes oil production will make a long-term contribution to the country’s current account balance and fiscal situation.
