The International Monetary Fund (IMF) recently stated that the oil reserves in Uganda may account for around four percent of the country’s economy annually in the next few years if managed well.

These sentiments were echoed by speakers and delegates attending the Uganda International Oil & Gas Summit in Kampala, Uganda.

Addressing government officials and delegates, Patrice Laporte, Vice President of Siemens North American Oil & Gas Division, presented a keynote titled ‘Digitalization in the Oil and Gas Sector’.

“As more and more technology per barrel is required, oil and gas projects are becoming increasingly complex and the need for an integrated solution is important,” said Laporte, adding: “The anticipated positive economic impact in Uganda from the oil and gas sector is indeed promising but the full effect of this will only benefit the country and its citizens through judicious planning and implementation of the proposed pipeline.”

Uganda is a new entrant into the oil and gas market, and the proposed oil pipeline stretching from Uganda oil fields to the Tanzanian port of Tanga will be the world’s longest electrically heated crude oil pipeline. It is estimated to be one of the most expensive projects to develop upstream, midstream and downstream infrastructure and the country is looking to capitalize on lessons learned in other developing oil & gas markets, as well as from established producers.

“With an estimated 6.5 billion barrels of oil and close to 500 billion cubic feet of gas, Uganda is a promising site for exploration. Siemens has a proven track record of delivering fit-for-purpose technical solutions on a large scale in remote locations. This expertise and knowledge can play a decisive role in ensuring the performance and on-time delivery of a key infrastructure project of this magnitude,” added Laporte.

Siemens is considered one of the technology leaders in the industry because of its full spectrum solutions, products and services. “For many years Siemens have been supplying industrial automation, power generation and power distribution strengths and experience to the oil and gas industry.”

“What makes this special is that our expertise and technology is not only of benefit at the inception of a project but along the full value chain and throughout the entire lifecycle of an investment. Our innovative technical solutions ensure the sustainability of projects with a key focus on reliability, performance and economic efficiency.”

Siemens involvement in the third Uganda International Oil & Gas Summit follows on the back of its participation at Future Energy Uganda earlier this month as well as the signing of the Memorandum of Understanding in May this year at the World Economic Forum in South Africa.

The company is collaborating with Uganda on a number of fronts related to the country’s immediate and long-term energy and infrastructure ambitions as well as actively investigating the best option to establish a local presence based on business sustainability.

Sabine Dall’Omo, Siemens CEO for Southern and Eastern Africa recently commented while in Uganda, “Siemens is a company that invests for the long term and is optimistic about the long-term fundamentals of the Ugandan market. We want to support sustainable development – with solutions and projects in Africa, for Africa and are actively reviewing the requirements for the organization to open an office in Uganda taking into consideration business sustainability.”

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The seasonally adjusted Purchasing Managers Index (PMI) for Uganda has signalled further improvement in the health of the private sector, between July and August.

The headline index posted above the 50.0 no-change mark for the seventh month running, supported by improvements in new orders, output, employment and stocks of purchases , and the PMI reading for August was above the average recorded over 15 months of data collection so far.

Following stability in the preceding month, the wholesale and retail sector returned to growth in August.

Improvements in business conditions across the remaining sectors of agriculture, construction, industry and services, were maintained in the latest survey period.

Uganda’s private sector registered increases in both output and new orders for the seventh consecutive month during August, and panelists noted the greater customer purchasing power and further improvements in demand that were complemented by promotional activities.

Meanwhile, new export orders fell during August, with panelists mentioning political instability in key export markets like South Sudan.

In response to greater output requirements, private sector firms raised their payroll numbers accordingly, with all five monitored sub-sectors increasing their staffing levels during August.

Also, the ongoing upturn in new orders prompted firms to engage in input buying. As a result, input stocks accumulated for the fifteenth month in succession. Firms raised inventories due to forecasts of further improvements in market demand, according to anecdotal evidence.

Commenting on August’s survey findings, Jibran Qureishi, Regional Economist EA at Stanbic Bank said: “The private sector continued to show encouraging signs of improvement in  August with the PMI average recorded over the past two months of 54.2 being much higher than the 51.6 average in the first two quarters of 2017. Indeed, even though export orders were down in August, firms are likely to begin exporting much more over the remainder of the year and beyond as political risk in key trading partners could begin to subside. Moreover, the current stable macroeconomic environment is likely to bode well for the Ugandan private sector in FY2017/18 and continue to moderately get the economy back on firm growth trajectory path. ”

Meanwhile, the Ugandan private sector firms faced higher cost pressures during August. Cost inflation was again recorded across all five sub-sectors monitored by the survey. According to underlying data, rising overall input prices reflected higher staff costs and purchasing prices, with some food items, taxation and fuel prices reportedly up since July. At the same time, firms passed on higher cost burdens by raising output prices.

The Stanbic Bank Uganda Purchasing Managers’ Index is based on data compiled from monthly replies to questionnaires sent to purchasing executives in 400 private sector companies selected to accurately represent the true structure of the Ugandan economy, including agriculture, construction, industry, services and wholesale and retail.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.

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