Uganda’s green oil field project contributes an additional Shs 1.55 trillion to the country’s foreign direct investments, totaling Shs 5.57 trillion from 2021 to 2022.
The joint venture between China National Offshore Oil Corporation (CNOOC) and Ugandan National Oil Company in Lake Albert’s oil field, valued at Shs 23.7 trillion, plays a significant role in driving the investment surge.
Despite FDI growth, Uganda’s Uganda Investment Authority (UIA) emphasizes the need for more investments to meet urgent development requirements, aiming to attract Shs 10.93 to 14.57 trillion annually for infrastructure and job creation.
Between 2021 to 2022, investments in Uganda’s green oil field project added an extra Shs 1.55 trillion to the country’s foreign direct investments, totaling the country’s green oil field to Shs 5.57 trillion. For context, Uganda’s FDI increased from Shs 2.93 trillion in 2017, to its current Shs 5.57 trillion.
According to the United Nations Conference on Trade and Development (UNCTAD), the Shs 1.55 trillion was the largest recorded in the East African sub-continent, during the period under review.
The investment was majorly fueled by the joint venture between the China National Offshore Oil Corporation (CNOOC) and the Ugandan National Oil Company in Lake Albert’s oil field worth Shs23.7 trillion. Other comparable oil investments in Uganda include the Shs 12.8 trillion, 1440-kilometer East African Crude Oil pipeline, which is intended to transport oil from Uganda’s Lake Albert to Tanzania’s Tanga ports for export.
According to UNCTAD, the subcontinent’s FDI was an impressive Shs 31.7 trillion, with increases recorded across different countries. Kenya increased to Shs 2.77 trillion, Tanzania’s FDI rose to Shs 4 trillion, and Uganda’s FDI exceeded EAC’s growth projection of 3%.
Regardless of the growth, the country via the Uganda Investment Authority (UIA) notes that the country’s FDI has underperformed, as more is required to foster the level of development Uganda aspires to.
The UIA’s director of domestic participation, Mr Angelo Izama said, “We need an infusion of about Shs 10.93 trillion to Shs 14.57 trillion every year to catch up with urgent needs, such as the provision of jobs and infrastructure development.”
Based on information found in the UIA’s December 2022 memo, FDI contributes the most to creating jobs for Ugandans, particularly in the manufacturing sector. This, in accordion with Mr. Izama’s assessment, has been enhanced by the country’s push for import substitution heightened by the coronavirus pandemic.
The UIA is also trying to combat the investment gap that exists on a micro level, by partnering with more advanced countries in need of Uganda’s resources.
