Uganda must act now to strengthen fiscal governance, expand domestic revenue mobilisation, and create clear, accountable frameworks for oil earnings. Citizens, policymakers, and civil society alike need to advocate for transparency and inclusive planning to ensure the nation’s oil wealth drives sustainable development rather than fueling mismanagement.
Uganda stands at a critical juncture as it prepares to tap into its vast oil reserves, with expected government revenues of nearly $2.5 billion per year by 2027. While the promise of transformative infrastructure and economic growth is real, experts warn that without robust governance, domestic revenue mobilisation, and planning, the windfall could easily be mismanaged.
For years, Uganda’s domestic revenues have hovered around 13 percent of GDP well below the Sub-Saharan African average of 16–18 percent. Despite strategies to raise the tax-to-GDP ratio, growth has remained sluggish, constrained by widespread tax exemptions, limited transparency in public spending, and the country’s large informal sector, which accounts for over half of economic activity. Agriculture alone contributes just 2 percent to revenue, despite making up 24 percent of GDP.
As Uganda readies to receive substantial oil earnings, concerns mount over the ability of both central and local governments to plan and utilise funds effectively. Local governments are entitled to 6 percent of oil royalties, but fears persist that without proper frameworks, these windfalls could be poorly spent or even returned to the Ministry of Finance unused. Projects like the East African Crude Oil Pipeline, which benefit from generous tax incentives and double tax agreements, further complicate revenue forecasts.
Experts emphasize that clear policies must outline which infrastructure projects are prioritised, who benefits, and how resource revenues are reinvested. Civil society, policymakers, and stakeholders must push for transparency and inclusive investment strategies to ensure oil revenues deliver tangible benefits for all Ugandans.
Uganda’s opportunity to leverage oil, critical minerals, and the growing global demand for clean energy is enormous—but only if domestic revenue systems are strengthened, governance is tightened, and spending is carefully planned. Without these measures, the promise of prosperity risks turning into financial mismanagement and deeper debt.