Museveni's Sovereign Fund Plan for Oil Revenues Gains Traction

President Yoweri Museveni has thrown his weight behind a plan to create a Sovereign Fund, a dedicated account where Uganda’s anticipated oil revenues will be initially deposited. This move aims to ensure that the substantial income expected from oil production is managed prudently and benefits the entire nation.

During his recent budget speech for the 2026/2027 financial year, President Museveni informed Parliament that the government expects to receive approximately $1.5 billion (around Shs5.6 trillion) annually from its share of oil. He emphasized the need for a strategic approach to managing these funds, drawing parallels with countries like Norway, which have successfully utilized their oil wealth. “Instead of using it to buy perfumes, whiskeys, and so on, they put their money somewhere as it gains interest,” the President remarked.

The concept of a Sovereign Wealth Fund (SWF) is defined by the World Bank Group as a state-owned investment vehicle designed to grow national wealth and stabilize the economy. Typically, nations fund these by investing profits from natural resource exports or fiscal surpluses, with investments often made in global stocks, bonds, and real estate.

This proposal echoes earlier advocacy by former Finance Minister Professor Ezra Suruma. In 2012, Prof. Suruma suggested creating a similar fund to safeguard oil money from corruption. He envisioned that only the profits generated by the fund would be distributed, potentially as pensions for the elderly or disadvantaged, ensuring a universal benefit.

Prof. Suruma, now a special presidential advisor, has applauded the President’s initiative, stating, “The oil money; if it is to benefit the population, must be handled in a manner where we have a Sovereign Fund.” He stressed the importance of proper management to prevent the funds from benefiting only a select few.

With oil production slated to commence soon, with key infrastructures like the Kingfisher and Tilenga projects nearing completion and the East African Crude Oil Pipeline (EACOP) well underway, the establishment of this fund is seen as a critical step for Uganda’s economic future. The President also noted that a portion of the oil revenue could be allocated to crucial infrastructure projects, such as regional railway networks.

Source: https://www.monitor.co.ug/uganda/news/national/museveni-gets-backing-on-oil-sovereign-fund-5496648