Published on 23 May 2025

Uganda pitches petroleum and palm oil opportunities to Malaysian investors

As Malaysia faces land and resource limits, Uganda offers room for growth

Palm oil plantation in Uganda.

Uganda is actively promoting trade with Malaysia and broader Asian investors through the Pearl of Africa Business Forum & Expo, recently held in Kuala Lumpur. Designed to establish Uganda as a prime investment hub in East Africa, the forum spotlighted opportunities in agriculture, tourism, oil and gas, manufacturing, and technology, urging Malaysian investors to tap into Uganda’s rich resources and business-friendly environment.

In 2024, Uganda’s exports to Malaysia reached US$108.29m, while imports stood significantly higher at US$250.13m, revealing a trade imbalance. This disparity has driven Uganda to intensify efforts to expand bilateral trade, aiming for exponential growth over the next five years. By pitching investment opportunities and emphasizing market access, Uganda seeks to strengthen its position in the Asian trade network, reduce dependency on imports, and enhance local industries.

Investment in Uganda’s petroleum industry and palm oil sector were among the key opportunities presented to Malaysian investors at the ForumMalaysian companies have been invited to bid for the exploration of untapped oil and gas fields in Uganda. The offer comes as Malaysia faces the decline of its own oil reserves, which could be depleted by 2038.

Uganda is preparing to start oil production from the Lake Albert basin, located near the border with the Democratic Republic of Congo, following long delays since the discovery of commercially viable reserves in 2006. France’s TotalEnergies and China National Offshore Oil Corporation are developing Uganda’s Lake Albert oil resources through a joint venture with the state-owned Uganda National Oil Company. A final investment decision was reached in 2022, and the project is expected to produce 1.4bn barrels of crude oil over a period of at least 20 years.

Yet much of Uganda’s petroleum potential remains untapped – it is believed only about 40% has been explored. At the forum, Energy and Mineral Development Minister Ruth Nankabirwa said that a new licensing round would soon be launched. As of last year, government geologists were conducting preliminary surveys in two additional basins in the north and northeast. It is not yet clear whether these areas will be included in the licensing round or whether it will focus on the Albertine Graben – part of the East African Rift system that includes the Lake Albert basin and Uganda’s existing oil fields.

Nankabirwa also pointed to investment prospects at the Kabalega Petrochemical Industrial Park, which will host Uganda’s planned oil refinery. The government recently signed an agreement with UAE-based Alpha MBM Investments to finance, develop and operate the refinery, estimated to cost around US$4bn. Once operational, the refinery could spur a range of industrial activities – for example, by-products can be used to manufacture fertilisers. Support services such as logistics and hospitality will also be needed. The industrial park sits next to Uganda’s second international airport, which is nearing completion.

In agriculture, the Ugandan delegation expressed interest in leveraging Malaysia’s expertise in palm oil production. Malaysia is the world’s second-largest producer of the widely used vegetable oil, found in products ranging from cooking oil and baked goods to shampoo and biodiesel. However, Malaysian production has stagnated for more than a decade, partly due to a lack of available land for new plantations.

Centre Director Amit Jain with OPUL staff in Uganda.

Uganda, by contrast, has the right climate but remains underdeveloped in palm oil cultivation. In 2023, Uganda imported US$311m worth of the commodity. Kenyan industrialist Vimal Shah, CEO of consumer goods manufacturer Bidco Group, recently also urged Malaysian producers to consider establishing palm oil plantations in East Africa. Centre Director Amit Jain visited the 11000-hectare plantation managed by Oil Palm Uganda Ltd (OPUL) – a joint venture between BIDCO and Singapore-based palm oil conglomerate Wilmar in 2024. The palm oil plantations at Kalangala which is located on the stunningly beautiful island of Bugala on the Ugandan part of Lake Victoria was once a think forest infected by the deadly tsetse fly. Today it has a thriving fishing, tourism and oil palm farming district with a population of over 66,300 residents.

Palm oil produced in Uganda can cater for both the local market and supplied to neighbouring countries, where demand continues to outpace local supply. Africa imported 3.9m tonnes of Malaysian palm oil in 2023, a 17.1% increase from the previous year. Kenya, Egypt, Tanzania, Nigeria, and Mozambique were among the top importers.

Beyond oil and agriculture, the Ugandan delegation highlighted opportunities in tourism, particularly in eco-lodges, hospitality services, and infrastructure to better harness the potential of the country’s national parks. Mining – especially copper and gold – was likewise flagged as an area with strong investment potential.

Uganda prioritises local manufacturing and processing, leveraging its natural resources for industrial growth. By focusing on value addition rather than raw material exports, the country has designed investor-friendly policies that simplify business establishment.

The Uganda Investment Authority (UIA) supports this push through a one-stop center, streamlining business licensing and tax registration. Investors could benefit from full foreign ownership, guaranteed profit repatriation, and targeted tax holidays for priority manufacturing sectors.

Companies like Bidco Group, which have successfully established operations in East Africa, serve as valuable case studies for Asian investors looking to expand into the region. Uganda’s strategic location and its participation in the African Continental Free Trade Area (AfCFTA) also present advantages for manufacturers setting up operations.

Additionally, Uganda’s inflation rate has seen a notable decline, dropping from 10.4% in 2023 to 3.4% in March 2025. This could signal deliberate structural efforts by the government to foster a more conducive business environment for investors.

For Asian investors exploring African markets, Uganda offers rich natural resources, strong agricultural potential, and investor-friendly incentives. However, frontier market risks, such as currency volatility and infrastructure gaps, necessitate careful due diligence to ensure sustainable investment success.

References

'Uganda and Tanzania: launch of the Lake Albert Resources Development Project', TotalEnergies, 01 February 2022

'Uganda says it's exploring for oil in two new regions', Reuters, 21 August 2024

'Uganda plans third oil exploration licensing round in 2025/26, minister says', CNBC Africa, 02 January 2025

'The end of cheap palm oil? Output stalls as biodiesel demand surges', The Edge Malaysia, 10 March 2025

'Revisiting Africa as an option for Malaysian oil palm expansion', The Edge Malaysia, 12 March 2025

'Uganda keen to tap Malaysia’s expertise in palm oil industry', The Sun, 23 April 2025

'Uganda seeks billions in trade, investment at Malaysia forum', PML Daily, 23 April 2025

'As Malaysian oil runs out, is untapped Uganda the unlikely answer?', South China Morning Post, 24 April 2025

'Uganda Pearl of Africa Trade Expo opens in Malaysia', Ministry of Foreign Affairs, Uganda, 25 April 2025

'Uganda, Malaysia explore tourism partnerships, aim for 5,000 tourist flow', PML Daily, 25 April 2025

'How Malaysia and ASEAN investors are powering Uganda’s tourism growth at the Pearl of Africa Expo 2025 by embracing digital innovation, partnerships, and cultural exchange', Travel And Tour World, 26 April 2025