Uganda Poised to Maximize Oil Revenue Through Industrialization and Value Addition

Uganda is on the cusp of a significant economic shift as commercial oil production draws nearer, with the first oil expected before the close of the 2026/27 financial year. The East African Crude Oil Pipeline (EACOP) has reached over 90% completion, a major milestone in the journey towards harnessing the nation’s oil wealth.

Energy Minister Dr. Monica Musenero emphasizes that the oil sector should be viewed as more than just a revenue source. It’s an opportunity to drive industrialization, foster innovation, and achieve sustainable development, aiming to transform Uganda’s economy from its current estimated GDP of $69 billion to $500 billion.

The government’s strategy involves retaining value within Uganda by processing crude oil rather than exporting it raw. The planned 60,000-barrel-per-day refinery is a cornerstone of this plan, promising to enhance energy security and create multiple downstream industries. Kabalega Industrial Park is being developed to host these refinery-related businesses, manufacturing, logistics, and agro-processing, projecting an annual contribution of $4.9 billion to the GDP and over 35,000 jobs.

To date, the petroleum sector has attracted substantial investment, accounting for nearly 70% of Uganda’s foreign direct investment. Even before production begins, the country has already generated over $1.4 billion in tax and non-tax revenues, which have supported critical infrastructure projects.

When production commences, annual state revenues are projected to range between $1 billion and $2.5 billion. Over the lifecycle of the upstream projects, pipeline, and refinery, government earnings could reach approximately $69.7 billion. These funds are earmarked for investment in infrastructure, education, healthcare, industrialization, and economic diversification.

The sector has also been a significant driver of local content and employment. Over 22,000 direct jobs have been created, with 85% filled by Ugandans, alongside substantial indirect and induced employment opportunities. Ugandan companies have secured a significant portion of procurement opportunities, gaining valuable experience and enhancing their global competitiveness. Furthermore, over 14,000 Ugandans have received specialized training, building a skilled workforce for both the oil sector and broader industrial ambitions.

Source: https://www.monitor.co.ug/uganda/business/prosper/oil-wealth-how-uganda-can-cash-in-5553608