Economy of Uganda is expected to grow strongly in medium term with or without first oil production

At first, the government projected that the first commercial oil from the Albertine Graben would be produced in 2020. However, Eng Irene Muloni, Energy Minister, stated that "the 2020 timeline would be taken ahead to 2020 as the joint venture partners Total.

 

Muloni further said that, "the final investment decision could be made in the first quarter of 2019 and the first oil in 2022."

 

Despite of delay in oil production, Uganda's economy will grow strongly in the medium term. Razia Khan, Chief Economist said that, "we expect strong medium term economic growth, that is with or without first oil production as the government boosts infrastructure spending."

 

She further continued, "we have raised our 2018 GDP growth forecast to 6.0% (from 5.5%). We still expect growth to average close to 6% in the coming years, moving on even further with oil production."

 

The central Bank's Composite Index of Economic Activity describes above potential growth of 7-8% in the financial year 2019, which ends by 30 June 2019.

 

Uganda's imports of raw materials are expected to point as the construction of the oil pipeline to the port of Tanga in Tanzania begins, commented Razia Khan. According to her inflation is likely to grow the Central Bank's 5% target by end 2019 and in 2020.

 

Also, more measures to ramp up the revenue base are expected when the budget for financial year 2020 is announced in June 2019.

 

CNOOC and Tullow are yet to make the investment decision to develop the oil fields in Tilenga and Kingfisher blocks.