The World Bank in its Country Economic Memorandum for Uganda, has said that the start-up of commercial oil production in the country could motivate its socio-economic transformation, if the profits are well managed.

According to the Bank, profits generated from oil could increase growth and reduce poverty, if it is invested into agriculture, infrastructure and human capital development.

“Uganda has an opportunity to get the economics right. If oil resources are well managed it could take the country a lot less time to achieve its national vision of attaining upper middle income by 2040. This will mean pumping oil profits back into sectors that will have huge economic spill-overs to the most vulnerable and the poorest people,” Christina Malmberg-Calvo (photo), World Bank country director for Uganda said.

Uganda is expected to commence the production of its first commercial oil in 2018, following the discovery of substantial reserves near its border with the Democratic Republic of Congo in 2006. Only 40% of the country’s potential has been explored so far and there is hope of more discoveries.

A group of companies spearheaded by Tullow Oil, Total and China National Offshore Oil Corporation (CNOOC) anticipates to produce about 60,000 bpd per day and could increase to 120,000 bpd.

The bank noted that once production begins the country could make up to $2bn in revenues yearly, thereby facilitating the transformation of its decelerating economy, Public Finance International reports.

Anita Fatunji