The Influence of Uganda’s Fiscal Policy in Promoting Sustainable Financing In The Oil And Gas Sector In Uganda

Abstract

This study focused on analyzing how fiscal policy is related to oil and gas in a given economy like Uganda in anyway would play a significant role in encouraging capital investments from foreign direct companies, thus ensuring sustainable financing of the sector. The study discussed a comparative analysis with other countries, where the extractive industries develop and operate through relationships between host governments and international companies. The fiscal policies that govern the relationship between these parties determine how the financial benefits and risks of extractive projects will be divided. These can be seen in the host government’s legal frame work and National policies and if managed successfully, it will generate large revenue streams thus influencing sustainable financing through striking a balance between attracting the best investors and getting a good deal for the country. A fiscal regime that does not provide sufficient incentives for investors can result in production or revenue levels that fall short of government goals. But a fiscal regime that fails to distribute enough revenue to the host country can fail to effectively compensate the country for the value of its depleting resources, and can foster citizen dissatisfaction and national instability. Yet sustainable financing seeks to reconcile economic performance with positive social and environmental impact. The researcher used a doctrinal research methodology in which data was collected using a systematic literature review method. The researcher used both thematic and content analysis techniques to analyze the study data findings. The study findings disclosed that Uganda has a comprehensive flexible legal framework that has fair content including; Production Sharing Agreements, royalties, tax holidays, stabilization clause and others. The researcher recommends that the government take a key interest in fighting corruption in implementing the provision of the legal regime and fiscal policy in order to reap the benefit in oil and gas blessing to the nation of Uganda