Uganda’s economy will expand by 5.2% in the fiscal year 2017/2018 after slipping to 5% in 2016/17, helped by infrastructure spending and foreign investment in the oil industry, the World Bank said on Tuesday.
After years of delays, the East African nation aims to start exporting oil in 2020 when construction of a pipeline through neighbouring Tanzania is due to be completed.
“The economy should grow at a slightly higher rate in FY2017/18, reaching the level of around 5.2 %,” the World Bank said in a report, putting growth in 2016/17 at “not higher than 5 %.”
Uganda’s financial year runs from July 1 to June 30. The award of oil production and exploration licences in 2016″could accelerate foreign direct investment (FDI) inflows, infrastructure development, employment and the development of local industries,” the bank said.
Uganda has oil reserves of about 6.5 billion barrels of which up to 1.7 billion are estimated to be recoverable. Its fields were discovered a decade ago but disputes over tax and development strategy have delayed production. France’s Total has the largest stake after buying portion from London-listed Tullow Oil.
China’s CNOOC owns the second biggest stake. World Bank lowered its 2016/17 forecast to 5 %, citing concerns about non-performing loans, insecurity in neighbouring South Sudan and the impact on tourism and the poultry industry from the discovery of bird flu in Uganda.
Central bank data showed commercial banks’ 8.3 %of loans were non performing in the quarter ending June 2016, up from 3.8 %in the quarter to September 2015. In January, Uganda said it had detected bird flu in two locations in the country, in wild and domestic birds, prompting some regional countries to block imports of Ugandan poultry.
– By REUTERS
