Uganda is one of the countries in Eastern Africa which is considered successful in the global market. The economy in Uganda is rising especially in Kampala, which is the financial center of Uganda. Recent data shows that there is economic growth in the country, as the rate of real GDP increased. According to the African Development Bank Group, in 2019 there was a big growth in the Ugandan economy. This data suggests that industrial growth was 6.2%, but among other sectors, agriculture grew just by 3.8%. However, the overall indicator of the country was still considered as successful.
Despite the bad impact the coronavirus pandemic had over the financial market of Uganda, the country quickly recovered which is due to making investments in the crude oil business. The most important sector of the country is agriculture. The production of coffee, beer, and other goods has increased dramatically in recent years. Uganda’s manufacturing sector is growing due to market reformation, increased domestic security, and tax breaks. Merchandise exports have increased by millions of dollars in recent years. Besides, one of the reasons for the country’s financial stability is the oil industry.
Trading oil in Uganda
Uganda has proven crude oil reserves of millions of barrels and in fact, the country is the fourth largest with these reserves in sub-Saharan Africa, after South Sudan, Nigeria, and Angola. This is why trading oil has become so popular in Uganda.
Trading oil is also popular among the online forex traders of Uganda. However, the Uganda Financial Intelligence Authority which is the country’s financial regulator doesn’t rule the forex market, making a lot of problems for forex trading brokers in Uganda, as there is no regulatory framework for Forex trading. This is a huge problem for people who want to trade forex in the country because trading oil isn’t licensed. People in Uganda have so many financial problems because of the lack of job opportunities and people want to turn to forex for a living. However, due to the lack of proper regulations, it’s hard to engage in the fx trading business.
Still, there are ways to trade forex in Uganda, as taking part in the online trading system becomes more and more popular. It has become a way for the oil business to enter the global market. The country has an export income which is mainly generated from oil re-exports. Ugandan Traders can take their pick from a long list of Globally regulated Forex Brokers who accept local traders.
But the situation slowly changes. As reported in APANews, recently Uganda has joined the Extractive Industries Transparency Initiative (EITI), which makes the global body on oil and gas transparency. It’s an international standard for promoting the open and secure management of oil, gas, and mineral resources. Joining the EITI would probably improve accountability in the management of Uganda’s natural resources and maximizes the benefits of oil trading.
Oil investors in Uganda
According to Bloomberg, recently Uganda set new plans for exporting oil and picked investors for five different blocks. Now the country’s oil and gas industry is predicted to gather investments worth more than $1 billion. As the Minister of Energy and Mineral development says, it was important for the oil companies to develop infrastructure for producing oil. Besides, the oil companies had to make some other arrangements concerning the infrastructure before making their final investment decisions for the two central facilities.
International oil investors currently working in Uganda have invested more than $3 billion, as the minister, Muloni says. She expects even more investors in oil businesses and strongly believes that they can start producing crude oil as early as in 2023.
As it seems Uganda has finally made its way to the global market and trading oil remains an interesting topic for investors from all over the world.