Uganda will start exporting crude oil in the 2025/2026 fiscal year, a report by the International Monetary Fund (IMF) has revealed.
The IMF has hinted that the start of commercial crude oil production in Uganda will propel its economic growth into double digits.
According to IMF, Uganda’s economy could rise to 10.8% growth from a projection of 6.2% in the previous period.
“Growth is expected to strengthen, boosted by the start of oil production, which will make a lasting improvement to the fiscal and current account balances,” the IMF added.
Although the crude oil exportation has delayed for nearly 20 years, Uganda is finally on the brink of supplying crude oil to other countries.
Also Read: EXPOSED: How Uhuru Govt Sold Crude Oil But No One Knows at How Much
Uganda’s commercial reserves pumps were discovered earlier in 2006. However, factors such as disputes with oil firms over the development strategy, and the lack of required infrastructure delayed the production process.
In the new dawn, Uganda is pumping up to 240,000 barrels of oil per day from its oil reserves estimated at 6.5 billion barrels.
IMF warning on declining bank reserves
The IMF reported a continued decline in Uganda’s foreign exchange reserves and asked for intervention from the central bank by reducing government imports, increasing foreign exchange purchases, and allowing for greater exchange rate flexibility.
However, there was a notable fall in the country’s foreign exchange reserves to $3.2 billion in June from $3.7 billion in December 2023.
According to the IMF, the fall was attributed to the high cost of servicing debt, the government’s inability to secure cheap credit, and limited hard currency purchases.
Also Read: Kenya Bows to Pressure, Grants Uganda’s Wish to Solve Oil Stalemate
Kenya Turkana Crude Oil Project
Despite recent developments, Kenya’s Turkana Crude Oil project continues to lag behind.
The Turkana crude oil project officially began with the launch of the Early Oil Pilot Scheme (EOPS) on June 3, 2018. This initiative was inaugurated by President Uhuru Kenyatta at the Ngamia-8 well site in Lokichar, Turkana County.
Currently, the Tullow Oil and its joint venture partners have submitted a revised Field Development Plan (FDP) to the government for approval. This plan aims to enhance the project’s economic viability and attract potential investors.
The project has encountered several challenges, including the need to secure strategic partners and the construction of the Lokichar-Lamu pipeline to transport crude oil from Turkana to Lamu port for export.
Despite these obstacles, Tullow Oil remains optimistic and is actively seeking new partners to advance the project.
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