Uganda Revises Growth Forecast Lower as Crude Output Nears and Pipeline Construction Advances

Uganda, 30 January 2026 - Uganda’s Finance Ministry has revised the country’s economic growth forecast to 6.5 – 7% for the financial year beginning July 2026, down sharply from an earlier projection of 10.4 per cent, as expectations for an immediate economic boost from crude oil production are tempered by real-world constraints and global conditions.

The downgrade was announced via the government’s social media channels without detailed explanation, although it comes as Uganda prepares to start crude oil output in its western oilfields later this year.

The revised forecast dampens hopes that early oil revenues alone would significantly accelerate growth, but officials emphasise that crude production, led by France’s TotalEnergies and China’s CNOOC, remains a key pillar of Uganda’s economic strategy going forward.

Uganda’s oil sector has been under development for nearly a decade following the discovery of commercial reserves in the Lake Albert region, and producers are advancing upstream extraction infrastructure in anticipation of first oil.

A central element in Uganda’s oil strategy is the East African Crude Oil Pipeline (EACOP), a 1,443-kilometre crude oil export pipeline being built from Hoima in western Uganda to the port of Tanga on Tanzania’s Indian Ocean coast.

The pipeline is designed to transport crude from the Tilenga and Kingfisher oilfields to international markets, with a peak capacity of around 216,000 barrels per day and potential to ramp up to 246,000 b/d as output increases.

The project is majority owned by TotalEnergies (62 per cent), with smaller stakes held by the Uganda National Oil Company (15 per cent), Tanzania Petroleum Development Corporation (15 per cent) and CNOOC (8 per cent). It is expected to require sophisticated infrastructure, including multiple pumping stations and heating systems to maintain the flow of Uganda’s naturally waxy crude, making it one of the longest electrically heated pipelines in the world.

Construction of EACOP has progressed significantly, with milestones such as the arrival of line pipes in Uganda and coordinated work across Uganda and Tanzania, milestones that bring the project closer to its target of first oil exports by late 2026/early 2027.

While early proposals included connecting Uganda’s crude to the Kenya Pipeline Company network or building a pipeline to the Kenyan port of Lamu, Kampala chose the Uganda–Tanzania route in 2016, citing cost, security and logistics advantages.

The Tanzania route was deemed more secure and less constrained by topographical and operational challenges, and it benefits from an existing deep-water port at Tanga that can handle exports.

This decision has implications for regional energy infrastructure. Unlike Kenya, which remains a key transit route for refined petroleum products into Uganda, crude export infrastructure is now focused on Tanzania’s Indian Ocean coast rather than Kenya’s Mombasa or Lamu ports.