Oil refinery will boost Uganda’s economy, says global advisor

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Global Advisor at HYRAX OIL Haji Habib Kagimu, has asked companies like Total that are building an oil refinery in Uganda to ignore French environmental protection demonstrators against the project.

According to Kagimu, those working on the project are aware of the importance of the environment and know how to balance between the benefits of a refinery and environmental conservation.

“I have nothing against these French environmental demonstrators, but we are not stupid, we know what we want and we are mindful of the environment because we need it; it’s not the environment that needs us,” he said.

Kagimu, also the Honorary Consul of Malaysia to Uganda, added that without a refinery, through which the government plans to add value to its crude oil, there will not be much money for the country.

Kagimu explained that selling crude oil in its current form will instead deny Uganda more income, just as it has happened with coffee, where Uganda has been paying more for imported processed coffee as opposed to the earnings from unprocessed coffee exports.

Kagimu cited Malaysia, which has a population of 32 million and an economy of over $300 billion, in contrast to Uganda, which has an economy of $53 billion.

“They have moved ahead because they produce the equivalent of 750,000 barrels of gas and 100,000 barrels of crude oil. Using money from these two products, Malaysia has its National Petroleum Company called Petronas, an equivalent of the Uganda National Oil Company (UNOC).

“So UNOC, you are on the right course, and when I heard that the Ugandan refinery will be built using capital from shareholders and well-wishers without loans, I was amazed. Let us grab that opportunity, support them to deliver a refinery so as to add value to crude oil,” he added.

Kajimu made the remarks on Thursday during a dialogue between the Uganda Manufacturers Association and the Uganda National Oil Company, to discuss opportunities for manufacturers in the refinery and Kabalega Petro-Based Industrial Park at the UMA Multipurpose Hall.

At the same event, manufacturers, through their chairman, Aga Sekala Jr, said that the dialogue was aimed at helping manufacturers to optimise the benefits of Uganda's domestic oil wealth for the manufacturing sector and broader economy.

“We are at the cusp of first oil production, and this is a critical opportunity to forge a collaborative path forward. With an estimate of 6.5 billion barrels of oil reserves, of which 1.4 billion barrels are estimated as recoverable and 600 billion standard cubic feet of gas, we foresee our industries augmented and powered by the oil and gas sector, from inputs to energy,” Sekalala said.

He added that the manufacturing sector already contributes 16% to GDP, creates two million jobs, consumes 70% electricity, pays 30% tax, and 21% exports, but is still operating below utilisation capacity at 54%.