Uganda sees higher growth next year but no oil-fuelled boom yet

Uganda on Thursday forecast its economic growth would accelerate slightly in the coming fiscal year to about 7%, which suggests officials are not banking on large-scale energy production in the next 12 months.

The modestly higher growth forecast for the financial year starting next month compares to projected growth of 6.3% this year.

The government's latest estimate for the start of crude production was for the middle of next year, but a start date has been repeatedly pushed back because of disagreements between international energy firms and President Yoweri Museveni's government and slow progress building critical infrastructure.

Uganda's oil fields near the border with Democratic Republic of Congo (DRC) are estimated to contain about 6-billion barrels of reserves and are being developed by companies including France's TotalEnergies and China's CNOOC.

In his annual budget speech on Thursday, finance minister Matia Kasaija said the aim was to lower the deficit to 6.5% of gross domestic product next fiscal year from 7.6% this year.

His speech made clear the government views energy and mining as key growth drivers, citing an oil pipeline, refinery and quantifying reserves of resources like iron ore, gold and copper as priorities.

He said annual economic growth would reach double digits once oil production begins.

The International Monetary Fund thinks Uganda's growth could hit double digits when crude oil starts to flow.

The World Bank said last week that it would resume funding to Uganda, nearly two years after it suspended new financing over an anti-LGBT law that imposes penalties including death and life imprisonment.

Reuters