Experts Skeptical About Prioritizing Oil Over Other Sectors

Since Uganda discovered oil in the Albertine Region, website there has been much speculation on this natural resource drastically turning the economy around.

While many are optimistic about the possibility, a few others have expressed worry that oil could be a curse to Uganda like in many other cases.

In a forum organized by Leo Africa at Serena Hotel on Tuesday, discount Aidan Eyakuze the ED Twaweza East Africa made it clear that for East Africa, oil shouldn’t be a priority due to the negatives that encircle the sector.

Much of Eyakuze’s rather provocative keynote address emphasized that if earth is to remain survivable for humans, 63 percent of the already existing carbon deposits should not be extracted.

Dr. Eyakuze attributed the wildfires, droughts, high global temperatures experienced recently to high carbon emissions.

“Fact as it is that these stocks are worthless will have an enormous effect on share prices of these oil companies. So those thinking of investing in oil companies should think twice”

He observed that there isn’t going to be any significant oil revenues for Uganda at current crude prices anytime soon.

“It will take until 2026 before revenue climbs towards 5 percent GDP”

Among the panel discussants at the same forum was tourism advocate Amos Wekesa who held that East Africa should invest more in tourism than oil.

“Oil shouldn’t be priority to what tourism is already earning us. For each 10 tourists, 1 permanent job is created”

Wekesa and Eyakuze agreed that tourism has a comparative advantage, creates more jobs and is more inclusive compared to the oil sector.

Dr. Eyakuze cautioned against the popular assumptions that oil and gas are scarce world over saying Uganda and Tanzania could experience a market shrink in future.

Senior Presidential advisor and former Finance Minister, Dr. Ezra Suruma however stressed that much as oil has had negative effects elsewhere, Uganda must struggle to fight the trend.

“Oil solves one critical problem; shortage of capital. This was a big problem in 1980 and as a result, Uganda was forced to accept loans with strict conditions. The effects are still visible” he said.

Dr. Suruma added it’s an opportunity for Uganda to have both of the top traded commodities; coffee and oil.

The forum raised issues relating to poor priorities, non-committed leadership and the confidentiality in the oil sector which hampers accountability.


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