As Uganda stands on the brink of an oil era, the world watches. Will it emulate the model of Norway, which used oil wealth to build a trillion-dollar sovereign-wealth fund? Or will it fall victim to the "resource curse," where abundant natural resources breed corruption, inequality and economic fragility?
According to the Uganda National Oil Company (UNOC) annual review Balancing Progress and Preservation: Uganda's Oil Journey and the Delicate Balance of Development, the company is striving to "turn oil dreams into sustainable realities" by emphasising that oil must benefit all Ugandans rather than just today's generation.
The numbers are compelling. Uganda's oil sector is projected to create over 160,000 jobs 14,000 direct, 42,700 indirect and 105,000 induced with spill-over benefits in agriculture, tourism and construction.
According to the UNOC report, linkages with other sectors such as health, manufacturing and education are estimated to boost GDP by USD 8.6 billion in the next three years.
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Already (as of September 2024) more than 15,000 direct jobs have been created, while 34,889 are indirect and 100,115 are induced. Revenues from oil are estimated to peak at around USD 2 billion annually, to be invested in highways, hospitals and classrooms.
However, the resource's location and the scale of infrastructure raise serious concerns. The oil lies in ecologically sensitive areas including the shores of Lake Albert and near Murchison Falls National Park.
The proposed East African Crude Oil Pipeline (EACOP) a 1,443 km heated pipeline to Tanzania's coast has drawn criticism from environmental activists who warn of deforestation, displaced wildlife and a higher carbon footprint.
UNOC's report notes the tension explicitly: "The journey from discovery to development must find a delicate balance between progress and preservation."
The company highlights its partnership with the Church of Uganda through the Alliance for Climate Resilience (ACR) initiative, which aims to plant 40 million trees as part of its reforestation and environmental protection strategy.
Nonetheless, oil-rich nations have often faltered when resources surge without robust governance. A major independent study finds that Uganda could earn about USD 1.9 billion annually under a slow energy-transition scenario but revenues could fall to around USD 1 billion in moderate transition condition.
This variation underscores key risks: oil revenue is inherently uncertain and dependence on it can undermine economic stability if diversification falters.
The opportunity in Uganda is real: jobs, infrastructure, domestic industrialisation and improved living standards are possible if revenue is managed prudently, if institutions are strengthened and if local communities genuinely share in the benefits.
But the looming curse is just as real: oil could reinforce inequality, environmental harm, elite capture and neglect of non-oil sectors.
The difference between success and failure will depend on several factors. First, transparency and accountability must be non-negotiable. UNOC emphasises adherence to global standards, joining the Extractive Industries Transparency Initiative (EITI) and pushing for open revenue-sharing mechanisms.
Second, the environmental and social costs must be actively managed: decisions around land acquisition, resettlement and ecosystem protection will determine whether host communities feel empowered or dispossessed.
According to UNOC, "For families living atop oil reserves, the trade-offs are deeply personal." Third, the economy must not be captured by oil alone; linkages to agriculture, manufacturing and tourism must be realized, so that Uganda's growth is inclusive and resilient rather than narrowly hydrocarbon-driven.
Yet the risks are strong. Oil sectors in many countries erode institutions rather than building them. They shift focus away from diversification, accelerate currency appreciation that hurts exports ("Dutch Disease"), and create rent-seeking opportunities for elites.
Environmental and social impacts in Uganda could also be severe, given the fragile ecosystems involved. If oil becomes the dominant narrative, other growth sectors may suffer.
In summary: Uganda's oil discovery is both a huge opportunity and a potential trap. The advantage lies not in the barrels beneath the ground, but in how Uganda uses them.
If managed wisely with strong governance, fairness to local communities, environmental integrity and investment in diversified growth the oil can become a lever for transformation.
If mismanaged, it could reinforce inequality, environmental degradation and economic vulnerability.
As the UNOC report puts it: "The world watches. Will it become a model for Africa, or a cautionary tale?" The choice belongs to Uganda and the coming years will show whether this resource is a golden ticket for the nation, or a hidden burden.
A high-level government fact-finding mission led by Lucy Nakyobe, Head of Public Service and Secretary to Cabinet has recently confirmed that the country's first commercial oil is projected to flow by July 2026 a target now backed by verifiable progress across major oil sites.
The team visited the two pillars of Uganda's petroleum development the Kingfisher Development Area in Kikuube District, operated by China National Offshore Oil Corporation (CNOOC), and the Tilenga Project managed by TotalEnergies in Buliisa and Nwoya districts.
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Among them were Energy Permanent Secretary Irene Batebe, ICT Permanent Secretary Amina Zawedde, and top executives from the Uganda National Oil Company (UNOC) and the Petroleum Authority of Uganda (PAU).
Energy Ministry Permanent Secretary Irene Batebe said Uganda's oil development has so far attracted $7.5 billion (UGX 28.6 trillion) in foreign direct investment.
She noted that beyond oil production, the sector has driven significant economic transformation in western Uganda, with over 600 kilometers of new access roads, improved power lines, and expanded business activity around the project areas.
"The oil sector has created jobs, opened up markets for local suppliers, and strengthened regulatory institutions. What we are seeing is the emergence of a new industrial corridor in the Albertine region," she said.
While the nation prepares to pump its first oil in a year's time, a critical question lingers: How can Uganda harness this "black gold" to fuel progress while safeguarding its natural heritage and communities?
At the heart of this balancing act is the Uganda National Oil Company (UNOC), the state-owned steward tasked with turning oil dreams into sustainable realities as it marks its 10th anniversary in 2025.
