The bar tab is due: Paying for Uganda’s oil before the first drop is pumped

What the report says

The Observer’s commentary argues that Uganda has spent years counting on future oil revenues to solve budget and debt pressures, even as first production has repeatedly been delayed. The piece says the country discovered oil in 2006 and that expected start dates have shifted several times, most recently to before the end of June 2027, while repayment obligations on oil-related borrowing have not changed. It frames this as a case of relying on promised resource income before any crude has been sold.

Citing IMF projections and research on large oil projects, the article says oil revenues are unlikely to cover Uganda’s growing financing costs in the near term. It points to heavy interest payments in the national budget, a large share of domestic borrowing, and concerns that expensive public debt could crowd out private sector lending. The writer also notes that the IMF has repeatedly raised public debt projections for Uganda over time.

The commentary adds that global oil demand may face longer-term pressure from the rise of electric vehicles and changing energy markets, making assumptions about future oil earnings even less certain. It says Parliament and the Ministry of Finance should be more transparent about oil-linked loans and should not book oil income in the budget until crude is actually sold. The article concludes that the key issue is not whether oil will arrive eventually, but how much value will remain after creditors are paid.