A Calibrated Macroeconomic Model for Uganda

About the Project KAPSARC is engaged in a long-term research project examining the dynamics of natural resource-driven growth in Eastern Africa. The principle research question we are seeking to answer is, how can natural resources be developed in a way that promotes inclusive economic development? We are answering this question through a comprehensive framework that examines macroeconomic issues of natural resource development, the impact of local content policies, and understanding the expectations of the stakeholders in East Africa’s oil and gas sectors.Summary for Eastern Africa PolicymakersRecent natural resource discoveries in Eastern Africa provide an opportunity to boost economic development. However, this opportunity brings with it potential challenges in the form of ‘Dutch disease’ and, potentially, the ‘resource curse’. A companion paper to this report: Managing Macroeconomic Risks Arising from Natural Resource Revenues in Developing Countries: A review of the Challenges for East Africa sets out the current state of thinking on the issues of Dutch disease, resource curse, the applicability of the permanent income hypothesis (PIH) in populous, developing economies and the impact of absorptive capacity constraints.Our focus is oil discoveries in Uganda and their expected impact on government revenues. We analyze alternative policies for spending natural resource revenues using a calibrated dynamic, stochastic, general equilibrium model (DSGE) of the Ugandan economy. These policy scenarios encompass the range of outcomes that are likely to be considered by the Ugandan government and provide a framing for subsequent policy discussions on how best to deploy the windfall.Using detailed publicly-available information on the upstream oil sector and the fiscal regime, we have derived realistic cost and government revenue profiles across a range of oil price scenarios. These profiles assume that proposed local content regulations neither delay project development nor increase the costs compared to international norms. This enables us to project annual production, fixed and variable costs, and government revenues for three global oil price paths.The three scenarios illustrate the potential effects of:Direct income transfers.Front loaded public investment spending.Gradual public investment spendingWithin these scenarios, we also assess the impacts of alternative assumptions on the efficiency of public investment arising from constraints on absorptive capacity within the economy.The results of the three different policy choices can be contrasted to show the tradeoffs between short term welfare benefits at the expense of long term economic performance. No single economic choice can be considered optimal in the absence of considering the political and social consequences of each individual policy choice. For this reason, we make no specific recommendation as to which approach to choose but provide a framework for policy discussions.

关于项目：KAPSARC正致力于一项长期研究项目，旨在探究东非地区自然资源驱动型增长的动态变化。我们旨在解答的核心研究问题是：如何以促进包容性经济发展为宗旨，实现自然资源的开发？我们通过一个全面的框架来解答此问题，该框架对自然资源开发的宏观经济问题、地方内容政策的影响，以及东非石油和天然气行业利益相关者的期望进行深入分析。

东非政策制定者摘要：近年来在东非地区的新兴自然资源发现为经济振兴提供了机遇。然而，这一机遇亦伴随着潜在挑战，如‘荷兰病’以及可能出现的‘资源诅咒’。本报告的配套论文《发展中国家自然资源收入引发的宏观经济风险管理：东非挑战综述》概述了关于荷兰病、资源诅咒、永久收入假说（PIH）在人口众多的发展经济体的适用性以及吸收能力限制的影响等方面的当前思考。

我们的关注焦点是乌干达的石油发现及其对政府收入预期的影响。我们运用经过校准的动态随机一般均衡模型（DSGE）对乌干达经济进行分析，研究使用自然资源收入的不同支出政策。这些政策情景涵盖了乌干达政府可能考虑的所有结果，并为如何最佳利用意外收益的政策讨论提供了框架。

基于对上游石油行业和财政制度的详细公开信息，我们推导了多种石油价格情景下的真实成本和政府收入概况。这些概况假设提议的地方内容法规既不会延迟项目开发，也不会增加与国际规范相比的成本。这使得我们能够预测三种全球石油价格路径下的年度产量、固定成本、变动成本和政府收入。

三种情景展示了直接收入转移、提前进行公共投资支出以及逐步进行公共投资支出的潜在影响。在这些情景中，我们还评估了不同假设对来自经济吸收能力限制的公共投资效率的影响。

三种不同政策选择的结果可以相互对比，以展示牺牲长期经济绩效以换取短期福利收益的权衡。在未考虑每个政策选择的政治和社会后果的情况下，无法认为任何单一的经济选择是最佳的。因此，我们不对选择哪种方法提出具体建议，而是提供了一个政策讨论框架。