How hydrocarbon investments are turning around Uganda’s economy

In normal times, an economic event with the potential to lift millions out of poverty, and with the potential to transform a country’s fortunes, would be considered a minor miracle. This is especially the case if such a transformation took place in Africa.

That is what Uganda’s new oil and gas development is on track for. When commercial production commences, it will add an estimated $1.8 billion to the country’s coffers, while also raising taxes, boosting local industry and creating jobs for thousands of Ugandans.

Yet it seems that we are not in normal times, and certainly not that this project is not being treated normally. Because despite the enormous impact this development will have on the future prospects of millions of Ugandans, the transformative effect is too often ignored or, worse, belittled.

Many in Western countries have tried to undermine the events, even as their dependence on fossil fuels and their own countries’ recent enthusiasm for new oil and gas exploration projects continues unabated. NGOs have shamelessly called for the entire project to be canceled.

But none of us should be surprised by what is happening. Such attitudes are not new. Elements in the West have long felt that they know better than Africans what is best for us, and treat us accordingly. What has become clear, however, is that many believe this is still the case.

I’m writing this in Cape Town, overlooking Table Mountain and close to Robben Island and the Cape of Good Hope. A few days ago the city hosted African Energy Week. It means that, knowing South Africa’s own history, it is difficult not to be amazed at the irony of the hypocrisy with which those in the West repeat the same old arguments like they did to justify apartheid in Africa.

Last week’s meeting was an important moment. The message was that Africans must be given the opportunity to develop economically and, as the continent navigates the realities of social change, be given the opportunity to realize people’s aspirations, free from the interference of those outside the continent who – like South Africa Africa knows it all too well – often just wants to contain it.

Generational change

In Uganda, our new oil and gas development will deliver a $40 billion boost to the country’s economy from the start of production and over the next 25 years. This year:

• approximately $2.8 billion will be invested;
• more than 400 miles of roads upgraded to asphalt;
• a second international airport is nearing completion;
• 10 newly accredited oil and gas training institutes delivering courses,
• and another $2.5 million has already been pumped into the local economy.

This will take place by deploying companies from the districts surrounding the main extraction locations to secure goods and services.

In a country where the annual wage is around a thousand dollars per year, a generational change is taking place. Even before the first oil in 2025, the value added to the country’s GDP was calculated at $8.6 billion. In total, more than 160,000 jobs are expected to be created in Uganda. So far, 94% of the 12,900 direct jobs created have gone to Ugandans, with a third coming from communities living in the area where the new oil and gas facilities are located.

The East African Crude Oil Pipeline (EACOP), which will transport Ugandan crude oil to the Tanzanian coast, will be the longest solar-heated pipeline in the world. Aided by the government, this development will give millions of East Africans the opportunity before the end of this decade to stop clearing forests for timber and switch to cleaner natural gas.

The theme of the African Energy Week was ‘The African Energy Renaissance’. There is no better description of what is happening in Uganda and in many parts of our continent. Our oil and gas development offers Uganda the opportunity to transform from a largely agricultural, low-income economy to a modern, diversified economy: an economy where no one will have to rely on timber to feed their families.

So we should all ignore the naysayers. Let us be proud of that and the way we are boosting people’s livelihoods through our own efforts and our own achievements, helping to develop and secure this great continent. We no longer need permission to do what we can for our countries and for a better future for our people. The time when people in the West think they can tell Africans what to do must end.