Bank of Uganda Governor Dr Michael Atingi-Ego has said he is confident Uganda will see its first oil flow during the 2026/27 financial year, while warning that excessive Government borrowing could put pressure on the economy and private-sector access to credit.
Atingi-Ego made the remarks while appearing before Parliament’s Budget Committee, where he discussed Uganda’s financing needs and the economic expectations surrounding the country’s oil production.
The Governor said Uganda’s domestic financial market can absorb the Government’s planned Shs12.7 trillion in domestic borrowing, but cautioned that borrowing beyond the projected requirement could push interest rates higher and increase competition for funds between Government, businesses and individuals.
According to the Governor, private-sector credit grew by 16.1 percent year-on-year to June 2026. He warned that increased Government demand for domestic funds could affect the availability and cost of credit for the private sector.
Committee Chairperson Gabriel Okumu also called for measures to discourage excessive borrowing, saying Parliament’s Budget and National Economy committees should closely monitor the Government’s financing plans.
Atingi-Ego further called for Uganda’s FY2026/27 fiscal and debt path to be reviewed, particularly if the country’s debt projections no longer reflect the current economic position. He also proposed that debt risks be assessed annually, with Government reporting on its domestic financing strategy and its effect on private-sector credit.
At the same time, the Governor expressed confidence in Uganda’s oil outlook. He has previously said that the progress of the East African Crude Oil Pipeline (EACOP) is critical to the country’s economic projections, including Government revenue and export earnings.
During an August visit to EACOP’s Pump Station One in Hoima, Atingi-Ego said key elements of Uganda’s 2026/27 budget and balance-of-payments projections are linked to the successful delivery of the oil projects.
The Petroleum Authority of Uganda has indicated that the country remains on schedule for first oil, with EACOP forming a key part of the infrastructure required to transport crude from the Tilenga and Kingfisher fields to the export terminal at Tanga, Tanzania.
The Governor’s comments therefore place two major issues at the centre of Uganda’s 2026/27 economic outlook: the expected arrival of oil revenues and the management of Government borrowing and debt.
While first oil is expected to provide a new source of revenue and foreign-exchange earnings, Atingi-Ego’s warnings highlight the importance of ensuring that domestic borrowing does not unnecessarily constrain credit available to businesses and households.
