Uganda last week announced it would invest $4.5 Billion in its oil refinery. The Announcement was made in Washington DC. and was carried by all major cable news network in many world Capitals. The Refinery project, just like all major projects in Uganda is behind schedule. It was supposed to have been launched this year 2022. It has however been sabotaged by the leading oil companies namely Total Energies and CNOOC, the Chinese Giant. They have vehemently opposed the refinery in preference of EACOP that will facilitate export of crude oil coz this would be in their favor. The Oil refinery has innumerable benefits to Uganda’s economy. Apart from creating employment, it will produce products such as Petrol, Diesel, Jet Fuel, Paraffin, LPG, Bitumen, and Shoe Polish among others. The 60,000 Capacity Barrel oil refinery needs an Assurance from Total and CNOOC of the supply of that amount every day before actual construction can commence. We hope government will expedite the process of concluding the negotiations such that the refinery is finally up and running. The refinery project is too good for Uganda. Its delay is a delay of opportunities for many young unemployed Ugandans. The refinery is too good to be stopped or its implementation delayed in any way. It has a multiplier effect on the economy. Apart from having initial huge investment, it will spur a lot of economic activity in Bunyoro region where it is to be established and the other parts of the country. By Uganda producing its own petrol and diesel, it will bring down the cost of production leading to faster economic growth for the country. On completion of the refinery the country will no longer import oil products but will instead export the surplus to the region and beyond. Furthermore, by exporting petrol and diesel which are finished products, Uganda will earn much more in terms of foreign exchange instead of exporting crude oil which fetches less money and leads to job loss. Uganda discovered oil way back in 2006 but has been postponing drilling and production saying it first wants get ready with the necessary legal framework as well as better planning. The discovery of Oil then came with expectations for both government and the citizens. Most Ugandans though it would take a shorter time to start cashing in on revenues from Oil. However it has been a very long wait. Government had at first estimated that production of oil would be realized by the year 2018. This was not possible. The production date has been a moving target. Right now, government has once again promised that initial oil production will be in 2025. It remains to be seen whether this target will be met this time. The oil refinery is supposed to be allocated up to sixty thousand barrels of crude oil per day. It is estimated that Uganda has up to four million barrels of recoverable oil in the ground. This is the confirmed amounts in the areas so fa explored. Government officials and oil experts have intimated that more oil finds could be released in the near future when full exploration resumes. Uganda is likely to join the league of the large oil producers in Africa. With better management of oil resource, the country could leapfrog from a third world poor country to a middle income progressive nation in a matter of years hence moving a large cache of its population from the doldrums of poverty to sustainable prosperity in just a matter of eons. Uganda has an advantage to learn from other African nations that discovered oil long ago and have been exploiting it. It will have to tread carefully such that it does not face the same challenges those countries faced. It has the opportunity to learn and copy the best practices from the best practices from countries that have used oil to positively transform their economies. Estimates indicate that current volumes of Uganda’s oil can only last up to 25 years. The amount of revenue the country could generate nevertheless are enough to invest in strategic areas which would fundamentally alter the trajectory of the country towards a smooth path of economic development. It all depends on how the resource shall be managed. The oil refinery was apriority when Uganda discovered oil and it should remain so because of its potential benefits and plough back effect on Uganda’s economy.
