UGANDA · ECONOMY
Key Facts
- The country Uganda is a landlocked East African country of more than 45 million people, led since 1986 by President Yoweri Museveni, preparing to produce oil.
- What happened On Tuesday 27 October 2026, Finance Minister Henry Musasizi told Parliament that dollar demand from the energy sector has jumped over the past year.
- The number Uganda energy dollar demand rose from US$360 million from July to September 2025 to US$620 million a year later.
- In shillings At the 28 October rate of about 4,316 shillings to the dollar, that demand equals roughly Shs2.7 trillion (about US$620 million).
- The cause Imports tied to oil projects ahead of production, plus higher global fuel prices, pushed up the need for dollars, the minister said.
- The refinery The US$4 billion Kabaale refinery in Hoima still has no final investment decision, now expected in February 2027, the regulator said in August.
- Still open How much of the US$620 million went to oil-project imports and how much to fuel, and how many dollars the central bank has sold.
Finance Minister Henry Musasizi told Parliament on Tuesday 27 October that Uganda energy dollar demand hit US$620 million, up from US$360 million a year earlier. At the 28 October rate of about 4,316 shillings to the dollar, that is roughly Shs2.7 trillion (about US$620 million).
For US investors and lenders, the pressure matters because, by the minister’s figures, one dollar now costs about 25% more shillings than in March. The planned state-backed oil refinery in Hoima, which would cut fuel imports, is still waiting for a final investment decision.
What the Finance Minister Told Parliament
Finance Minister Henry Musasizi gave Parliament a State of the Economy statement on Tuesday 27 October 2026. New Vision and Nile Post, two Ugandan news outlets, both reported his response to the weaker shilling.
He said Uganda energy dollar demand rose from US$360 million in the three months to September 2025 to US$620 million a year later. The increase of about 72% was partly due to imports tied to oil projects ahead of production, he told MPs.
Why Uganda Energy Dollar Demand Is Rising
Uganda found oil under Lake Albert in 2006 and has not yet sold a single barrel. Before the crude flows, Uganda energy dollar demand grows because the projects pay foreign contractors and suppliers, and those bills are settled in dollars.
France’s TotalEnergies runs the Tilenga field and China’s CNOOC runs Kingfisher, and both will feed a 1,443 km heated pipeline to Tanga in Tanzania. In September the finance minister gave Parliament a first-oil target of June 2027, as the Rio Times reported in Uganda Oil Delayed Again.
How the Refinery Delay Keeps Fuel Imports High
Uganda plans a US$4 billion refinery at Kabaale in Hoima district, designed to process 60,000 barrels of crude a day. Alpha MBM Investments, a company based in the United Arab Emirates, is to hold 60% and the state-owned Uganda National Oil Company 40%.
The Petroleum Authority of Uganda, the regulator, said in early August that the final investment decision is now due in February 2027, not July 2026. Until the plant runs, Uganda keeps buying refined fuel abroad for more than US$2 billion a year, which feeds Uganda energy dollar demand.
What Sits Behind the Shilling’s Slide
Musasizi said the shilling slid from about 3,604 to the dollar in March to roughly 4,500 in late October, up 25%. He blamed higher global petroleum prices, which lifted Uganda energy dollar demand, and falling world prices for coffee and cocoa.
The Bank of Uganda raised its policy rate from 9.75% to 12% and the bank cash reserve requirement from 11% to 13.5%. Energy, fuel and utilities inflation reached 14.5%, while headline inflation was 4.6% in September.
What the Government Plans to Do
Musasizi ruled out price controls, broad subsidies and tax cuts on fuel. Instead, he said the government is pursuing centralised bulk fuel imports, expanded strategic storage, cheaper pipeline transport and more domestic refining capacity.
He added that the government is using gold as one of the assets supporting the country’s reserves. Spending on workshops, meetings and administrative activities is being cut, and first-half budget releases reached 45.6% of the approved budget against a plan of 55.7%.
What It Means for US Readers
US investors in Ugandan bonds, and firms that lend in dollars to Ugandan borrowers, face a weaker shilling and higher local borrowing costs. Musasizi told businesses that borrow in dollars but earn in shillings to manage that currency risk.
Visitors and aid groups that pay in dollars get more shillings, but fuel and utility costs are rising for everyone. The earlier slide is covered in the Rio Times report on the shilling’s 33-year low and in the Uganda explainer.
What Is Not Known
The minister did not give the split between oil-project imports and fuel purchases inside the US$620 million. The reports of the statement also give no figure for how many dollars the Bank of Uganda has sold.
It is open whether the refinery decision will hold at February 2027 and whether first oil arrives in June 2027 as planned. The minister’s 4,500-shilling level is also well above the 28 October market rate of about 4,316, so the shilling’s path is open.
More: Uganda news in English, every day from The Rio Times.
Frequently Asked Questions
How many dollars does Uganda’s energy sector need?
Minister Henry Musasizi said Uganda energy dollar demand reached US$620 million in the three months to September 2026, from US$360 million. At the 28 October rate of about 4,316 shillings to the dollar, that is roughly Shs2.7 trillion (about US$620 million).
Why is the Ugandan shilling weak?
The minister pointed to higher global petroleum prices, which raise demand for dollars, and lower world prices for coffee and cocoa. Imports for oil projects before production also added to Uganda energy dollar demand.
When will Uganda’s oil refinery be built?
No final investment decision has been taken, and the Petroleum Authority of Uganda said in August that it is now expected in February 2027. The planned plant at Kabaale would process 60,000 barrels a day and cost about US$4 billion.
Will Uganda subsidise fuel prices?
No, the minister ruled out price controls, broad subsidies and tax cuts. He pointed instead to bulk imports, storage, cheaper pipeline transport and more refining at home.
What has the Bank of Uganda done about the shilling?
It raised the Central Bank Rate from 9.75% to 12% and the cash reserve requirement for banks from 11% to 13.5%. New Vision reported on 22 October that it has also sold dollars to ease sharp swings.
Sources: New Vision, Finance minister Musasizi outlines interventions, 27 October 2026; Nile Post, Government warns against panic dollar buying as shilling weakens, 27 October 2026; Nile Post, Uganda’s economy grows despite shilling pressure, 15 October 2026; New Vision, BOU intervenes as shilling hits sh4,300, 22 October 2026; fundsforNGOs News, Uganda delays Kabaale refinery decision to 2027, 7 August 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief