12 December 2o16, Kampala – The discovery of sub-Saharan Africa’s fourth largest oil reserve has been hailed as a panacea to Uganda’s problems. But even at peak production, it will only generate two barrels of oil per citizen per year.
A decade after the discovery of large reserves of commercial oil in Uganda was greeted as a game-changer for the country, some once optimistic leaders have reached a grim conclusion.
“Oil is a burden for us now,” says Norman Lukumu, prime minister of the Bunyoro Kingdom, where the majority of the deposits lie. “Some schools have been built but families displaced by land grabbers can’t use them. A road, some hotels, that’s all we have.”
Although production has not yet started, political leaders in Kampala have typically touted oil as a panacea to problems faced by one of the poorest countries in the world.
This August when production licence agreements were signed, for example, Oil Minister Irene Muloni hailed the 6.5 billion barrels found in the western region around Lake Albert as the solution to infrastructure challenges, rampant youth unemployment and a struggling economy.
“Service providers, jobseekers prepare yourselves. Let’s get ready to achieve our president’s vision for this country to become a middle-income country in the short term,” she said.
That vision, outlined by President Yoweri Museveni in his state of the union address this year, includes using oil to fund “the roads, the railway, electricity, irrigation, some aspects of education and health” as well as a long list of innovations from electric cars to banana juice.
These ambitions rest on the fact that of the 6.5 billion barrels discovered, 1.7 billion are easily recoverable. However, while this makes the find the fourth largest reserve of crude oil in sub-Saharan Africa, shared out equally across Uganda’s population, each citizen would only get about two barrels a year at peak production.
This compares to 39 per citizen in Angola, and 261 in Norway. Uganda’s oil revenue might be enough, used wisely, to spur some productive investments, but not to transform the country.
- African Arguments