Can Uganda’s Oil Endowment Support its Economic Development?

The document examines the potential for Uganda's oil wealth to drive economic growth, warning against the 'resource curse' and 'Dutch disease' that could undermine its agricultural sector. While noting progress in transparency legislation, it highlights critical gaps in revenue management and the need for stabilisation funds.

• Tullow Oil plc discovered 2.5 billion barrels of oil in the Albertine Graben area of western Uganda. At a price of $74 per barrel, this resource is valued at $148 billion, which could fund Uganda's national budget for 42 years without donor assistance.
• Uganda is highly susceptible to 'Dutch disease' because its economy relies heavily on agriculture, which employs over 80% of the workforce. Risks include a 'resource pull' where skilled labour leaves agriculture for higher oil sector wages, and currency appreciation that could contract agricultural exports.
• The document warns that Uganda must avoid pairing volatile oil revenues with fixed debt obligations to prevent over-indebtedness. This is a historical risk for the country, which in 1991 became the first nation to qualify for the Heavily Indebted Poor Countries (HIPC) initiative after debt exceeded 80% of export revenues.
• While the Access to Information Act of 2005 and the 2008 Oil and Gas Policy have improved transparency, implementation remains weak. The 2008 policy is criticised for being vague regarding the role and benefits for local communities.
• The draft Petroleum Exploration, Development, Production and Value Addition Bill from May 2010 contains significant transparency gaps. It fails to establish a centralised fund for receipts, lacks an auditing process for such a fund, and does not provide for the disclosure of industry-wide revenue data.
• Uganda lacks clear policies on the creation of petro and stabilisation funds to smooth oil revenues and uncouple public spending from oil price volatility. Fiscal provisions for taxes, royalties, and surface rents remain open-ended, which the author suggests creates opportunities for corruption.

APA

Modise, L. (2010). Can Uganda’s Oil Endowment Support its Economic Development? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2010/12/Policy-Briefing-26.pdf

Chicago

Modise, Lesedi. Can Uganda’s Oil Endowment Support its Economic Development? South African Institute of International Affairs, 2010. https://saiia.org.za/wp-content/uploads/2010/12/Policy-Briefing-26.pdf.

Wikipedia

{{cite report |last1=Modise |first1=Lesedi |title=Can Uganda’s Oil Endowment Support its Economic Development? |publisher=South African Institute of International Affairs |date=26 December 2010 |url=https://saiia.org.za/wp-content/uploads/2010/12/Policy-Briefing-26.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{modise2010can, author = {Modise, Lesedi}, title = {{Can Uganda’s Oil Endowment Support its Economic Development?}}, institution = {South African Institute of International Affairs}, year = {2010}, month = dec, url = {https://saiia.org.za/wp-content/uploads/2010/12/Policy-Briefing-26.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }