By Spy Uganda
The start of commercial crude oil production in Uganda is expected to result in economic growth surpassing 10% in the next fiscal year, said the International Monetary Fund (IMF) in a new assessment.
The African nation’s economy is projected to grow by 10.8% in the 2025–26 fiscal year, up from the previous 6.2% estimate, with expected growth of 6% in the preceding period and 5.3% in the following period.
The fund argued that Uganda’s current account deficit and limited capital inflows have pressured its international reserves. Despite strong coffee and gold exports, the current deficit remains high due to increased imports related to oil projects.
As of the end of 2024, gross international reserves cover less than three months of imports, excluding oil-project-related imports, due to challenging global financial conditions and reduced external project and budget support.
Prudent management of future oil revenues will involve implementing a rules-based framework, which allows for a portion of the revenues to support growth and social development while saving the rest for the benefit of future generations.
The government recently created the Petroleum Fund (PF) to collect oil-related fiscal revenues, allocated to the budget or the Petroleum Revenue Investment Reserve (PRIR), Uganda’s sovereign wealth fund.
