Ugandan President Yoweri Museveni said yesterday he would not spend oil money from the east African nation’s few billions barrels of crude reserves on wages or recurrent expenditure.
The east African nation may be lifted into the world’s top 50 oil producers after foreign explorers found hundreds of millions of barrels of oil reserves in the western Lake Albert region.
Museveni said the government would “ring fence” any money from those reserves to fund infrastructure, higher education, agriculture, industry and services and human resources.
“Our oil money should never be used to pay wages … should never be used for recurrent expenditure or to support consumption,” he told a conference of his ruling party.
“I do not have the same intoxication with oil as some of the less discerning people seem to. Petroleum is not more important than agriculture, industry, services and a developed human resource,” he said.
Uganda’s economy has grown around 5% annually over the past two decades. While growth slowed in 2009 to an estimated 6.6% from 9.2% a year earlier, analysts say it has weathered the global slowdown better than expected.
Analysts polled by Reuters expect the economy to grow 6.4% in 2010.
But infrastructure is a key challenge for east Africa’s third largest economy, especially power and roads whose poor quality hinder farmers and producers’ access to markets in Kenya, south Sudan and eastern Democratic Republic of Congo.
Investor interest is heating up for Uganda’s unpumped oil, estimated at a few billion barrels, and the sector has begun to attract oil majors such as Italy’s ENI.
Uganda has said it expects to resume licensing exploration companies at least 60 companies have already expressed interest in bidding for acreage at the end of 2010 when a new oil law is expected to be in place.
Only a handful of crude explorers are looking for oil.
“Our newly discovered petroleum will give us readier cash with which we shall be able to tackle the more durable potential of Uganda’s industry, agriculture, services and human resource development,” Museveni said.
The former rebel leader did not say how the oil money would be divided up, nor any specifics on how Uganda would avoid the “resource curse” issues that are expected to arise as Uganda moves to national polls in 2011.