Abstract

The East African country of Uganda has seen its growth increase steadily in the last decade. While minerals have stagnated, the continued presence of agriculture and the 2006 discovery of oil have given the country reason for economic optimism. Not yet tapped, Uganda expects to construct a pipeline and start extracting this oil within the next five years. The Ugandan government, led by President Yoweri Museveni, has promoted oil as the opportunity to industrialize the country. However, Uganda must improve on several facets to make this happen. Their fiscal regime needs improvement, as it is not internationally competitive and suffers from tax leakage. As for economic diversification, the government plans for a quasi-market approach to industrialize, but it will need to improve education before attracting investment. Value addition must also be created for their resource economy, especially in minerals. In terms of regional connections, Uganda should continue its involvement with the African Union and the East African Community. While the government promotes oil as the key to transforming Uganda into a middle-income, industrialized country this change will not occur unless the government changes the country’s prevailing policies. Museveni’s government must, for instance, improve their transparency, not muzzle civil society groups and let institutions build more capacity. Without structural changes to the government, oil will not lead to the envisioned development of Uganda.