KIKUUBE — President Yoweri Museveni has urged Uganda to use revenues from its oil resources to build long-term national assets rather than spend the money on imported luxury goods.
Museveni said the country must learn from the experience of other oil-producing nations and ensure that the expected petroleum revenues contribute to economic transformation long after Uganda’s oil reserves have been depleted.
The President was speaking on Wednesday at the Kingfisher Development Area in Kikuube District during the ceremony to officially name Uganda’s crude oil for the international market.
Uganda’s crude has been given the name “Pearl Sweet Petroleum”, a move that comes as the country prepares to enter commercial oil production and the international petroleum market.
Museveni said petroleum was a finite resource and that the money generated from it should therefore be invested in projects that would continue benefiting Ugandans after production declines.
He listed electricity generation, roads and other transport infrastructure, railways and universities among the areas that should benefit from the oil revenues.
“Future petroleum revenues should support investments in power generation, transport infrastructure, railways, universities, and other long-term national assets rather than increased consumption of imported luxury goods,” the President said.
Refinery defended
Museveni also defended Uganda’s decision to develop an oil refinery alongside the export infrastructure.
He said refining some of the country’s crude domestically would reduce the cost of transporting petroleum products and help lower Uganda’s dependence on imported fuel.
Uganda currently spends about $2 billion annually on petroleum imports, according to the President.
The planned refinery is part of the country’s wider oil development strategy, alongside the East African Crude Oil Pipeline (EACOP), which will transport crude from the oil fields in western Uganda to the Tanzanian port of Tanga.
The government expects the oil sector to generate substantial revenue once commercial production begins.
Museveni has previously spoken about creating a sovereign fund through which part of the petroleum revenues could be saved and invested rather than immediately consumed.
Gas to generate electricity
The President also said Uganda intends to make use of the gas produced alongside crude oil instead of allowing it to be wasted through flaring.
According to Museveni, associated gas will be used to generate about 80 megawatts of electricity, while some of the resulting petroleum products will be processed into liquefied petroleum gas for domestic cooking.
The plan, he said, is intended to ensure that Uganda obtains greater value from its petroleum resources.
Building local expertise
Museveni also looked back at Uganda’s early efforts to develop its oil industry, saying the country initially lacked enough specialised personnel to manage the sector.
He said government supported Ugandans to acquire training in petroleum engineering and management at institutions outside the country.
The investment in training, he said, has helped create a pool of Ugandan professionals capable of participating in the management and development of the industry.
Museveni urged the country to continue investing in technical expertise as oil production expands.
More exploration
The President also called for continued exploration for petroleum deposits in other parts of the country.
He said Uganda’s current oil developments represent only part of the country’s potential petroleum resources and urged continued geological exploration.
“The objective should be to ensure that the first barrel of oil is not the last,” he said.
The comment reflects the government’s intention to keep exploring Uganda’s sedimentary basins even as the country moves towards commercial production from its existing fields.
Kingfisher and Tilenga
Uganda’s commercial oil production will be centred on two major developments: the Kingfisher Development Area, operated by CNOOC Uganda Limited, and the Tilenga project, operated by TotalEnergies.
The projects are linked to the EACOP and the planned refinery, forming the main infrastructure for Uganda’s petroleum industry.
The Kingfisher project is located in Kikuube District, where Wednesday’s crude oil naming ceremony was held.
The government sees the petroleum industry as an important source of revenue for financing infrastructure and supporting wider economic development.
But Museveni’s latest warning highlights one of the central challenges facing Uganda as production begins: ensuring that oil wealth is converted into productive investments rather than short-term consumption.
Uganda’s Public Finance Management Act already provides for petroleum revenues to be deposited into the Petroleum Fund and restricts their use, with withdrawals requiring parliamentary approval.
The law provides that petroleum revenue transferred to the Consolidated Fund should finance government infrastructure and development projects rather than recurrent expenditure.
The debate will now shift from how Uganda prepares for oil production to how the country manages the revenues once they begin flowing.
For Museveni, the objective is to ensure that Uganda’s oil wealth leaves behind infrastructure, skills and investments capable of supporting the economy long after the country’s oil fields have stopped producing.
