Oil to improve Uganda’s economy growth by four per cent: IMF

UgandaUganda is looking forward to recovering its economy with the production of oil the reserves. (Image source: Bureau of Land Management/Flickr)The International Monetary Fund (IMF) has stated that the newly discovered oil reserves in Uganda may account for around four per cent of the country’s economy annually in next few years if managed well

Axel Schimmelpfennig, mission chief of IMF for Uganda, said that the country also needs some strategic infrastructure investment and better debt management procedures to boost up the economy.

As reported by Reuters, Uganda discovered commercial hydrocarbon deposits in the Albertine rift basin that shares its border with the Democratic Republic of Congo in 2006. The source estimated that the deposits hold around 6.5 bbo as well as commercial deposits of natural gas.

Uganda faced an economic downgrade in the past decades. Schimmelpfennig explained, “Drought in the Horn of Africa, regional conflict, and slow credit growth have contributed to, with per capita growth falling to half a per cent from an average of five percent for the past 20 years.”

With the production of oil in the new oil reserves, Uganda is expecting to raise its per capita GDP in near future.

"In our estimates the revenues could range on an annual basis from about half a per cent GDP initially to about four percent at peak production,” said Schimmelpfennig.

“The challenge that many oil producers face is to manage this well,” he added.

According to the source, the IMF has projected Uganda’s growth around 5.7 per cent in 2018. However, Schimmelpfennig has expressed hopes for a greater growth beyond the IMF figure.

Schimmelpfennig further described that the production in the new-found wells has been scheduled to start in 2020, after a number of years delay. Also, to serve the domestic purpose, development of an export pipeline is under process and work is at the early stages of field development.

He further commented that the country is expected to get benefits of the oil production for almost 30 years.

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