With the discovery of oil and natural gas reserves in the Albertine Graben region, the area with highest petroleum production potential in Uganda, the state is now poised for the economic boom that comes with mining and utilization of the state’s petroleum reserves. This is a coming of age, an entry point into the club of oil exploring countries. We can only trust that oil exportation will follow shortly.
The current volume of oil resources stands at an equivalent of 6 billion barrels of oil (of which 1.4 billion are recoverable), while we have 500 billion cubic feet of natural gas. This volume is based on exploring less than 40% of the Albertine Graben. If more explorative projects are undertaken in the area, the country’s known petroleum reserves and resources are expected to expand significantly. The fact that big reserves have been discovered without exploring even half of the Albertine Graben region is considerably promising.
However, this is not necessarily a given, there are numerous factors that could contribute to whether or not the country can convert the oil and gas into prosperity for all. Emphasis is on Uganda’s ability to convert the natural resources into tangible wealth.
In the private sector, we have five main investors with licenses for petroleum exploration waiting to cash in on the reserves. Over the past 15 or so years, $3.4 billion dollars has been invested in the oil and gas sector, and over the next 5 years, the amount is expected to lie anywhere from $15-20 billion. All of this will greatly benefit the economy. There will be new demands on the Uganda labour force, as significant training would be needed for Ugandans seeking to join the sector. In turn the quality of human capital to serve in this sector would have to increase. This would create a professional labour force with potential for higher earnings, leading to more economic dividends.
The most obvious improvement would be the support infrastructure system for the oil and gas sector. Government has proposed an industrial park in Kabale, an oil pipeline running from the Albertine to Tanga in Tanzania, a refinery, an international airport, a crude oil transportation/storage system, offices, and warehouses. The benefits of these developments could be potentially huge with thousands of new jobs and an increase in the volume of trade. The road and rail network would also have to be radically overhauled to support the increased socio-economic activity in the region and emanating from the region. Surely Uganda is on the brink of a historical transformation.
A viable refinery in Uganda would save billions of dollars currently spent in importation of refined oil products and would confer a great boost to the Ugandan economy, bringing a positive effect on our balance of payments. This picture looks very rosy and attractive.
But looking elsewhere on the continent, it has been called the “oil curse”, for discovery of such resource endowments has not always been accompanied by economic boom. Something eludes us in Africa.
My take? We need a mindset change and take control of our issues in Africa. There is no such thing as the oil curse but poor leadership.
So, before the new dawn can break forth, we need to sweep clean and put into place leadership that is based on kingdom principles. A fresh quality of leadership, courageous enough to fight corruption in all its forms and ensure that the resources we have been blessed with will benefit the entire nation, ridding us of poverty once for all.