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GTAP Resource #4156

"The economic impacts of a newly discovered oil in Uganda, using a recursive dynamic CGE model"
by Roos, Louise, Philip Adams and Jan van Heerden


Abstract
The paper outlines the theory, database preparation and application of UgAge_D, a recursive dynamic computable general equilibrium model of the Ugandan economy. The model is based on ORANI-G, with a SAM extension and dynamic equations describing capital accumulation and wage adjustment. The database of the model is based on published national Supply-Use tables for 2002, updated to 2009. It has 83 sectors.
Uganda is highly vulnerable to oil price shocks as it imports almost all of its oil from the Kenyan refinery in Mombasa, which in turn imports crude oil from abroad. In the first part of this decade, large reserves of oil were discovered in Uganda, with recoverable reserves currently estimated at over 3 billion barrels. Very large investments are being put in place to mine the oil, refine some of it, and export the rest. The investment is being funded largely by foreign oil companies.
In this paper we use UgAge_D to analyse the macroeconomic, industry and income distribution effects of developing the new oil sector. In an effort to model the accelerated economic growth caused by the new oil discoveries, our modelling covers both the construction phase (around 5 years) and the production phase. The construction phase involves large investments in the newly created oil sector, while the production phase involves expansion of oil production, replacement locally of imported oil, and large fiscal shocks in line with the Government’s capture of economic rent from the new production.
JEL classification: C68, R13, L74.
Keywords: Dynamic CGE modelling, construction projects, African economic development, natural resource modelling.
...


Resource Details (Export Citation) GTAP Keywords
Category: 2013 Conference Paper
Status: Published
By/In: Presented at the 16th Annual Conference on Global Economic Analysis, Shanghai, China
Date: 2013
Version:
Created: van Heerden, J. (4/15/2013)
Updated: van Heerden, J. (4/15/2013)
Visits: 898
- Dynamic modeling
- Economic development
- Africa (East)


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