Uganda’s Oil Production Set to Boost Economic Growth – IMF

Confidence UbaniSeptember 12, 20241 Mins read108

The International Monetary Fund (IMF) has projected that Uganda’s economy will grow by 10.8 per cent in the fiscal year 2025/2026. This forecast was driven by the expected start of crude oil production, which will help improve the country’s fiscal and current account balances.

“Growth is expected to strengthen, boosted by the start of oil production, which will make lasting improvement (to) the fiscal and current account balances,” the IMF said in its recent report.

Uganda plans to begin producing oil from its western fields after nearly two decades of delays due to infrastructure gaps and disputes with oil firms. At full capacity, the country is expected to produce 240,000 barrels of oil per day, which would boost revenues.

Uganda’s foreign exchange reserves, however, dropped from $3.7 billion in December 2023 to $3.2 billion in June 2024. The IMF urged the central bank to intervene by reducing government imports, increasing foreign exchange purchases, and allowing greater exchange rate flexibility to mitigate further decline. Generally, the Uganda’s economy is strengthening.

“Uganda has navigated the post pandemic recovery well due to sound macroeconomic policies. The economic recovery is strengthening with low inflation, favourable agricultural production, and strong industrial and services activity”, the IMF added.

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