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Tourism

Uganda's Oil Sector Devastates Small Tourism Businesses

Strategic Insights

— 2 min read

In Uganda's oil-rich regions, promises of economic fortune and opportunities have instead turned into nightmares for small tourism business owners, a new report reveals. Despite government and industry claims of benefits from the oil and gas sector, many local entrepreneurs feel betrayed and financially ruined by the supposed "false promise" of oil-related business opportunities. The report, titled 'Those Oil Liars! They Destroyed My Business: Tourism stakeholders' views of Uganda's oil sector', conducted by the Africa Institute for Energy Governance (Afiego), highlights the devastating impact of oil exploration on small tourism businesses in districts hosting Uganda's oil projects worth about $20 billion.

Key Takeaways:

  • Small tourism business owners in districts hosting Uganda's oil projects worth about $20 billion feel financially ruined and betrayed by the supposed "false promise" of oil-related business opportunities.
  • A hotelier in Buliisa district borrowed money to expand his facility, thinking it would cater to oil workers, but activities stalled due to a tax dispute and no oil workers stayed at the hotel till date, causing him to struggle with debt repayment.
  • Local hotel owners in the Albertine Graben petitioned their umbrella organisation, Uganda Hotel Owners Association, to intervene on their behalf after it emerged that contrary to promises, employees of oil and gas companies and their contractors would be staying in workers camps and not hotels.
  • TotalEnergies has constructed an estimated 4,000 housing units for its Tilenga project workers, while CNOOC has built 2,000 housing units for staff manning its Kingfisher facilities.
  • Oil drilling is ongoing in Murchison Falls National Park, with infrastructure developed by French TotalEnergies, and commercial oil production from the park is expected to start by June 2026.
  • Some respondents recommended that protected areas should be established as no-go zones for oil drilling, and government should better fund tourism and reduce taxes.
  • Despite challenges, some tourism business owners reported oil-driven improved infrastructural developments that ease business, creating partnerships with the oil industry to promote tourism, and an increase in demand for travel services.
  • The Ministry of Tourism data shows that between 2020 and 2024, Murchison Falls National Park and Queen Elizabeth National Park led in visitor numbers, but these conservation areas are subject to oil exploitation activities or threats.

Statistics:

  • By November 30, 2024, 15,169 people were directly employed in the oil sector, 90 percent of whom were Ugandans, with 4,773 of them coming from the host communities (Petroleum Authority of Uganda).
  • Between 2020 and 2024, Murchison Falls National Park and Queen Elizabeth National Park led in visitor numbers (Ministry of Tourism).
  • In 2024, the tourism sector earned Uganda Ush4.8 trillion ($1.28 billion), contributing 16 percent of Uganda's total exports, while its direct contribution to GDP was 3.2 percent and up to 803,000 jobs (Ministry of Tourism).

Sources:

  • "Those Oil Liars! They Destroyed My Business: Tourism stakeholders' views of Uganda's oil sector" by the Africa Institute for Energy Governance (Afiego)
  • Ministry of Tourism
  • Petroleum Authority of Uganda

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