Uganda to expand 7pc over next five years - bank

Uganda's capital,  Kampala. Uganda’s economic growth will likely accelerate to 7 percent if public infrastructure investments including in the oil sector remain high. [Photo: Courtesy]

KAMPALA,- Uganda’s economic growth will likely accelerate to 7 percent over the next three to five years if public infrastructure investments including in the oil sector remain at a “high level,” the central bank said.

The East African economy, a prospective crude oil exporter, is seen expanding at 6 percent in the 2018/19 (July-June) fiscal year, supported by robust activity in manufacturing, services and construction sectors.

The central Bank of Uganda’s (BoU) latest state of the economy report seen by Reuters on Friday said, “over the next 3-5 years, growth could reach 7 percent, if infrastructure and oil sector investments are on track.”

These infrastructure investments, the report said, will “remain at a high level over coming years. This should, in turn, continue to have positive spillover effects on private sector investment activity and spending.”

Uganda is at various stages of implementation of a range of infrastructure projects to help improve transport, boost electricity generation and also get the country to commence crude oil production.

Some of the major projects include two hydropower dams, an express highway, construction of a new international airport and expansion of an old one, and construction of a $3.5 billion crude oil export pipeline.

Most of the projects are financed with credit lines from China which also holds stakes in the country’s oil fields.

Uganda discovered oil reserves, estimated at 6 billion barrels, in fields in the western part of the country, near the border with the Democratic Republic of Congo more than 10 years ago.

Commercial production though has been repeatedly delayed by spats between the government and its private sector partners, that include France’s Total and China’s CNOOC, over taxes and disagreements over field development strategy. Production is now seen starting earliest by 2021. “Conditions are in place for a sustained economic expansion,” BoU said in the report.