Oil, industrialisation and devt

One of Africa’s biggest challenges has been to industrialise. From oil to cocoa, cotton to vanilla, Africa is rich in natural resources but its heavy dependence on commodity exports means it has yet to take full advantage of the added value that processing raw materials and manufacturing can bring. The continent must move away from the mere export of raw materials and start to industrialise.

The former governor of the Nigerian Central Bank once pointed out that his country is one of the largest producers of tomatoes and one of the largest importers of tomato paste. From cotton to coffee, from tomatoes to oil, literally every product made in Africa leaves as a raw material and returns as a finished product. This must be stopped.

In this regard, Uganda has established an audacious plan around its oil industry. One of the oil projects is the development of the Kabaale Industrial Park. Kabaale Industrial Park is a 29.57sq km land in Kabaale, Buseruka, Hoima District. This park will host the refinery and it will also host the crude oil export hub. It is from this park that the East African Crude Oil Pipe Line (EACOP) will start its 1,443km journey to Tanga in Tanzania. It is from this park that the refinery will be built. It is here that we have Uganda’s second international airport being developed.

The relationship Africa has had with the metropolitan centres of the rest of the world has been as a supplier of raw materials. The implementation of Kabaale Industrial Park is a bold attempt to ensure that a raw material in the form of crude oil is able to make a maximum impact not just on the Treasury but also on the wider economy.

The proposed refinery will produce liquefied petroleum gas, petrol, diesel, kerosene and heavy fuel oil. It will refine 60,000 barrels of oil per day.

The park will also host a petrochemical industry that deals with the by-products from the refinery. We shall be able to produce textiles, fertilisers and other industries.

There can be no gainsaying the fact that an industrial park built and anchored on the refinery will have significant economic impact on Uganda. For starters, it means we will stop buying the oil we use from the Arabian Gulf and Singapore as we currently do. The impact on energy security and even on our balance of payments would definitely be substantial.

The new airport and the new roads around the project area will play a significant role in making it easier for tourists to visit Uganda and see the beautiful Murchison Falls National Park, Queen Elizabeth National Park or all the other excellent tourist locations.

The park will be built around the idea of value addition. Uganda will export crude through EACOP but what we are able to add value to through the industrial park and the refinery will certainly boost the economic prospects of Uganda.

The park will be run by the Uganda National Oil Company (UNOC). UNOC will have a land allocation policy for interested investors. Construction of the roads, fencing of the different plots, laying of cables, for the project is estimated to start latest by 2024 as the refinery is being constructed.

The need for these projects cannot be overemphasised. Refineries across the continent have a combined capacity to refine 1.3 million barrels of oil per day. Africa only refines 30 percent of that capacity. We have less refining capacity in Africa than the barrels of oil Nigeria produces per day.

This petrochemical hub is, therefore, an important and necessary development. Industrialisation will help Uganda achieve high growth rates, diversify our economy and reduce exposure to external shocks.

This will substantially contribute to poverty eradication through employment and wealth creation. This is what will stop us from being growers of tomatoes who are forced to import tomato paste.  Value addition is and must remain the rallying cry for Africa.

The writer is an advocate and partner at Kampala Associated Advocates

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