Uganda central bank governor, Chief Justice inspect oil projects behind budget

Uganda’s central bank governor and chief justice have toured the country’s oil projects to see for themselves the production on which the national budget increasingly depends, as the sector enters its final stretch before first oil.

Bank of Uganda Governor Dr Michael Atingi-Ego and Chief Justice Dr Flavian Zeija visited the Kingfisher oil field in Kikuube District, inspected the start of the East African Crude Oil Pipeline (EACOP) at Kabaale in Hoima, and toured a petroleum waste plant built to serve the fields. They were joined by Deputy Chief Justice Moses Kazibwe Kawumi and a delegation of Supreme Court justices and Judiciary officials.

For Atingi-Ego, the trip was a chance to test an assumption the central bank has already banked on. “A lot hinges on what is happening in the oil sector,” he said, citing the UGX1.4 trillion in oil revenue written into the 2026/27 budget, the foreign-exchange inflows projected in the balance of payments and the jobs being created at the sites. “All these matter for macroeconomic stability, which is my focus.”

Speaking at an EACOP pump station, he explained why he had made the trip himself. “I came to confirm that this is true because, in the unlikely event that it is not, we have to go back to the drawing board. I am very, very impressed,” he said.

Kingfisher, on the shores of Lake Albert, is set to produce up to 40,000 barrels of oil a day and 20,000 tonnes of liquefied petroleum gas a year. Atingi-Ego was shown how crude will be drawn from reservoirs 2.5 kilometres below the lakebed into a central processing facility, cleaned, and then pumped 1,443 kilometres through a heated pipeline to Tanga port in Tanzania for export.

The field has attracted about $2.5 billion in investment. Together with Uganda’s other production sites, it is projected to earn the country between $1 billion and $2.5 billion a year, depending on international oil prices. Roughly $15 billion has gone into the country’s oil and gas sector so far — the biggest concentration of long-term investment Uganda has ever hosted.

At the pipeline, EACOP Deputy Managing Director John Bosco Habumugisha said the project had reached 91 percent completion against a planned 94 percent, with the entire line now welded. He attributed the shortfall to factors outside the project’s control, including the conflict in the Middle East, which forced cargo to be diverted from Dubai to Oman, and the recent Ebola outbreak, which grounded flights from some countries before Uganda was declared free of the disease.

Habumugisha said environmental restoration was moving alongside construction, and that communities would eventually struggle to tell where the buried pipeline runs once the land is returned to its original state. He also pointed to the legal groundwork behind the project, from the intergovernmental agreement between Uganda and Tanzania to the host government and shareholder agreements that made construction possible.

Zeija used the visit to counter public scepticism about the oil. “Out there, they were saying there is no oil. That it was already sold and exploited long ago. That’s what I see on social media. But you can see there is a lot of work going on,” he said, praising the project’s reliance on Ugandan labour. Atingi-Ego made the same point, noting that he had not seen a single foreign worker on the site.

The delegation also toured the $6 million Luwero Industries Waste Management Facility, a joint venture between Uganda’s National Enterprise Corporation and China’s HBP that has treated 70,000 metric tonnes of petroleum waste from Kingfisher since it was commissioned in 2023.

How the eventual revenue is handled is fixed by the Charter for Fiscal Responsibility 2021–2026, which channels oil money into a Petroleum Fund. From there, no more than 0.8 percent of the previous year’s non-oil GDP may be transferred to the Consolidated Fund, and that money must go to infrastructure rather than recurrent government spending.

The remaining 99.2 percent flows to the Petroleum Revenue Investment Reserve, which the Bank of Uganda holds on the country’s behalf and is required to invest offshore — a deliberate guard against oil earnings flooding the local economy, pushing up the shilling and pricing Ugandan exporters out of their markets. The reserve is designed to keep oil paying returns to the country, and to future generations, long after production winds down.