Uganda needs a refinery to achieve its first oil, much as the upstream section is almost ready, according to Honey Malinga, Commissioner of Petroleum Exploration, Development & Production, Ministry of Energy and Mineral Development.
He was speaking during the Kampala Geopolitics Conference held at Makerere University on Thursday, October 24, 2024.
“We must have the refinery or the East African Crude Oil Pipeline (EACOP) ready before we can commence oil production,” added Malinga while appearing at a panel discussion on “Oil’s impact on Uganda’s Future: Blessing or Curse? The Impact of Oil Revenue on Uganda’s Economy, Society, and Geopolitics.”
Dr. Fred Muhumuza, a member of the International Center for Research on Women (ICRW) Board, said given the promise of oil revenue, the government overloaded itself with the national debt under the auspices of the upcoming oil revenue “which we have not yet seen”.
“We were told that the first oil would be in 2012, but by then, Uganda didn’t have a pipeline or refinery, let alone plans for both. Upon reflection, I advised that oil revenue should be removed from the national budget,” he stated.
According to him, oil is a global resource and there are many global wars surrounding oil. “Ugandans cannot say ”my oil”. Russian oil, for instance, is under global embargos because of various geopolitical issues. I come from the oil region, and I have not seen an oil road. Yes, there are good roads, but there are not oil roads.”
Bugweri County, Bugweri District, Hon Abdu Katuntu, says from 1897 to 1925, Uganda had bits and pieces of legislative documents for the mineral sector.
“In 1967, we created a specific law regarding petroleum exploration and production. In my view, we have one of the best laws for the mining, exploration, and production of the oil and gas sector,” he noted.
Raymond Mujuni, Editor at Nation Media Group, believes Uganda’s demographic structure will likely remain unchanged over the next ten years.
“With over 240,000 barrels sold daily, how much of the income stream will trickle down to the Youth once oil production starts?”
He said the existing oil revenue has increased Uganda’s borrowing appetite for funding various infrastructure projects, such as hydropower dams and an increase in the wage bill.
“I believe the oil & gas can structurally transform our economy by creating jobs for the ever-growing youth population. The longer the oil stays in the ground, the less benefit it has for Ugandans. The oil price continues to rise daily in a volatile market, where we are, unfortunately, a secondary player,” he pointed out.
Allana Kembabazi, an expert on social economic rights, said it is often the narrative that oil is a curse, but countries like Indonesia would say otherwise since oil is the reason for their robust education system.
“Other countries like the Netherlands and Qatar are a testament that oil is a blessing. I want to encourage Ugandans to re-imagine the future and, for a moment, forget about the Trauma that we carry as the Youth of Uganda stemming from gross fiscal indiscipline,” she stated.
