The ceremony to christen Uganda’s crude oil as “Pearl Sweet” at Kingfisher on September 2, followed two weeks later by the groundbreaking of the Kampala storage terminal in Mpigi, were celebrated as milestones in a national energy story decades in the making.
For many onlookers, these two events may have appeared as the beginning of something. In reality, they marked the near end of a long journey of preparation. Where patience is rarely fashionable in economic development.
Politicians are rewarded for speed, investors for immediacy, and electorates for visible results. Yet Uganda’s oil journey has been defined by an unusual choice: slow and cautious movement.
WHAT UGANDA PREPARED FOR
The significance of these recent events lies not in the oil itself. Crude buried underground has no economic value. The value lies in the ecosystem around it: engineers, welders, financiers, transporters, lawyers, insurers, contractors, training institutions and entrepreneurs.
Countries that fail to build this ecosystem often discover that oil enriches balance sheets while leaving domestic economies largely unchanged. Economists call it the resource curse.
Uganda has spent years trying to avoid it. When oil deposits were first discovered, industry stakeholders commissioned an industrial baseline survey to assess whether Ugandan businesses possessed the capabilities needed to participate meaningfully in the sector. The findings were sobering.
Significant gaps existed in technical capacity, certification standards, skills development, access to finance and industrial readiness. Without intervention, much of the opportunity risked being captured and expatriated by foreign firms, leaving Uganda with production but limited participation.
The study identified major shortages in technicians, craftsmen and specialised service providers while calling for stronger local supplier development and access to capital. Further, it outlined a path forward.
If local enterprises could be prepared to compete, Uganda’s oil economy could support between 100,000 and 150,000 direct, indirect and induced jobs. The question, then, was how to get Uganda’s institutions and businesses ready.
BUILDING LOCAL COMPETITIVENESS
That challenge resonated deeply with us at Stanbic, anchored in our purpose of driving Uganda’s growth. Purpose, however, is only meaningful when translated into action.
Nearly a decade ago, Stanbic established the Stanbic Business Incubator with the conviction that Uganda’s future would increasingly belong to enterprises capable of competing at world-class standards.
Oil and gas became one of the clearest tests. Over the years, thousands of entrepreneurs have passed through the incubator’s programs. Many now operate as credible suppliers within the oil and gas value chain, winning contracts, employing Ugandans and demonstrating that local content is far more than a regulatory requirement.
It is an economic strategy. Importantly though, local content should never be mistaken for protectionism. Its true purpose is competitiveness.
A supplier awarded a contract because of nationality alone creates dependency; a supplier awarded a contract because it meets the highest standards creates prosperity. That distinction matters.
Oil projects eventually end. Skills endure. Infrastructure depreciates. Institutions compound. The same philosophy informs our support for strategic infrastructure. Economic transformation requires investment in productive assets, even when such investments are complex or controversial.
Countries do not achieve middle-income status by avoiding difficult decisions. They do so by expanding national capability. This broader lens also informs our support for energy infrastructure, including projects such as the East African Crude Oil Pipeline.
Reasonable people may disagree on aspects of implementation. What should not be disputed is Uganda’s right to pursue a development pathway that expands opportunity, raises incomes and accelerates economic growth.
For Stanbic, the objective has never been simply to finance projects. It has been to help finance a future. That future is reflected in our Positive Impact Agenda, which focuses on financial inclusion, enterprise development and job creation, infrastructure investment, climate resilience, and social investment.
Together, these pillars support a single ambition: building a stronger, more inclusive Ugandan economy. Which brings us back to September. The naming of Pearl Sweet and the launch of the Kampala Storage Terminal were, on the surface, energy-sector events.
The two events celebrated oil. But they also celebrated something rarer: proof that strategic patience can work. For those who have watched Uganda’s oil journey unfold over many years, that may be the achievement worth celebrating most.
Not that the first barrel is finally approaching, but that Uganda opted to wait, and to use the wait preparing for the opportunities that follow. And most importantly, those opportunities belong to Ugandans.
The author is the Chief Executive, Stanbic Uganda Holdings
Sounds more like a pitch for Stanbic Bank than an honest, granular assessment pinpointing exactly what Uganda got right and perhaps where it could have done better.
The reserves that are recoverable, at a daily production rate of 2% of Saudi Arabia’s output, can stretch out to 20 years, maximum 30 years, and that’s it. Meaning, if Uganda hypothetically produces exactly what Saudi Arabia produces per day, matching that capacity, the recoverable deposits would be done within 6 months and then “kaput”.
That’s not really a big lifetime story to talk big oil for Uganda.
Maybe, what Uganda got right was coming to a sobering reality and didn’t fall into the false excitement a.k.a the curse. And then comes the intricate web of the upstream and then PhD-level complications follow.
Uganda, with all this hype, could have done better with those commercial agreements. How does Uganda, before even realizing a single substantial amount for herself, suddenly find herself owning ONLY 15% of a Ugandan oil asset, a whooping 85% belongs to foreigners!!!! Hahahaa
The current Uganda leaderships always use the phrase ‘Pearl of Africa’ by one Will Churchill, out of context. Churchill would ‘eat’ or take back most of his own words today if he was still alive. Something which he said before his death. For sure he would not call the current Uganda military junta, led by General Agony’s the Pearl of Africa. The politic of Hydrocarbons aka oil is too complicated due to geopolitics. Uganda will not be there at anytime soon.