During a Gold Rush, Sell Shovels: Uganda's Oil Opportunity.

Good evening, turns out Uganda’s Oil is to rain on our economy next year. Like joining my church choir from my 2025 resolutions, the Ministry of Energy and Mineral Development has shifted the first oil production to June 2026, citing ongoing construction at the Kingfisher and Tilenga projects as reasons for the shift, noting that both projects are currently over 60% complete. Oil is expected to be a game changer in Uganda, but you might be wondering how you'll benefit (more on that below), and honestly, I fear it may lead to what economists call the Dutch Disease.

What is a Dutch Disease?

Unlike diseases named after their origin, the Dutch Disease isn't caught from a specific place, nor does it affect people's health directly. Instead, it is an economic jargon used to describe a situation where a rapid growth in revenue from a specific sector (often natural resources) leads to a decline in other sectors of the economy. It is also often characterised by a substantial appreciation of the domestic currency. The presumed mechanism is that while revenues increase in a growing sector, the given economy's currency becomes stronger compared to foreign currencies (manifested in the exchange rate). This results in the country's other exports becoming more expensive for other countries to buy, while imports become cheaper, altogether making those sectors less competitive. It was first noticed in the Netherlands when they started exploring their oil and gas in 1960, which caused the Dutch currency to rise, making exports of non-oil products less valuable, and economists in 1977 just decided to "let's call this a Dutch disease." I am not saying that this could happen here, but there is a list of countries that faced the same issue: Britain, Canada, Russia, Equatorial Guinea, Angola, etc.

How Does Uganda Not Catch It?

To escape the resource curse, Uganda needs to play its cards right. This means hoarding away oil revenues in a sovereign wealth fund like the Arabs Countries do, rather than splurging immediately, to stabilise the economy and prevent the shilling from becoming too strong. Think of it as putting the oil money on a sensible savings plan, allowing Uganda to invest wisely without inadvertently making its coffee and tourism industries uncompetitive on the global stage.

Smart spending is paramount. The government must channel oil revenues into neglected sectors like agriculture, manufacturing, and even tourism, fostering diversification rather than reliance on a single commodity. Investing in education, infrastructure, and supporting local businesses, the nation can cultivate a skilled workforce and a robust non-oil economy, ensuring future generations aren't solely dependent on the fluctuating price of crude.

Lastly, preventing the Dutch Disease boils down to good governance and unwavering transparency. Clear rules for oil revenue management, robust anti-corruption measures, and strong independent institutions are crucial to ensure the benefits of oil reach all Ugandans. African countries endowed with oil are plagued with corruption and mismanagement of funds. Without these safeguards, the promise of oil could quickly turn into a tale of missed opportunities, where the wealth flows into a few hands rather than elevating the entire nation.

How Can You Benefit?

Forget just showing up with a good attitude; the industry demands specific expertise, from welding and logistics to engineering and environmental management. Parents, this is a good industry for your child. AI has a long way to go before drilling it down there, and besides, data centres are going to need a lot of cooling products from oil. Get yourself trained and certified in high-demand areas – institutions like the Uganda Petroleum Institute Kigumba are great starting points. Then, get your name on the National Oil and Gas Talent Register, and keep an eye on career pages from major players like TotalEnergies and CNOOC. Think of it as preparing for a highly specialised marathon, not a casual jog.

During the California Gold Rush, the saying "during a gold rush, sell shovels" emerged because many more people profited by supplying the tools and equipment needed by prospectors than by actually mining gold; so businesses eyeing a slice of the action, the National Supplier Database can be your way in to get a piece. Uganda's local content rules set aside specific opportunities (like transport, security, and catering) exclusively for Ugandan companies. For bigger gigs, consider joint ventures with international firms; a strong handshake and a solid business plan can unlock significant contracts.

Invest. Profit. Prosper.

Shaddai Kamoga

Marketing Officer

Shaddai Kamoga is Marketing Officer at Konnect Initiatives, responsible for managing the company’s investment process.