Uganda Oil Investments Seen Doubling Size of Economy by 2025

KAMPALA (Capital Markets in Africa) – Uganda’s economy may double in size by 2025 as investments in the oil industry stimulate growth, the country’s biggest lender said.

The $15 billion expected to be spent before crude production starts in 2020 will benefit a range of sectors, boosting the East African nation’s gross domestic product to $60 billion, Stanbic Bank Uganda Chief Executive Officer Patrick Mweheire told reporters Wednesday in the capital, Kampala. Participation of local companies in the “windfall investment” and oil-export revenue will have a multiplier effect on the economy, he said.

Total SA, China’s Cnooc Ltd. and London-based Tullow Oil Plc are jointly developing Uganda’s recoverable crude discoveries of as much as 1.7 billion barrels. Some of that oil will be processed at a $4 billion refinery planned for development by a group including General Electric Co.

Stanbic and Japan’s Sumitomo Mitsui Banking Corp. are jointly raising $2.5 billion to help fund a 1,445-kilometer (900-mile) crude-export pipeline through neighbouring Tanzania. Mweheire said prospective lenders have shown “significant interest” in the $3.5 billion pipeline that will have capacity for 216,000 barrels a day.

Source: Bloomberg Business News