INFLUENCE OF OIL AND GAS DISCOVERY ON THE GROWTH AND DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN THE ALBERTINE REGION: A CASE STUDY OF BULIISA DISTRICT, BUTIABA SUB-COUNTY
CHAPTER ONE
INTRODUCTION
This chapter presents the background of the study, the problem statement, purpose, objectives, research questions, scope, and significance of the study.
1.1 Background of the Study
Oil exploration dates back to 347 AD in China when the first oil well was drilled (Song, 2016). Since then, oil exploration and production have become global economic activities. In East Africa, oil exploration began in the early 1930s under British colonial rule, although significant discoveries were not made until the 1990s (Purcell, 2014).
Scholars such as Gumede (2008) argue that Western countries often apply selective pressure on African nations regarding democratization, especially overlooking oil-rich countries like Chad and Equatorial Guinea. Similarly, Ross (2001a) links oil and mineral wealth to authoritarian governance. Boonstra et al. (2008) further highlight the complex relationship between energy production and democracy, noting that international pressure for reforms tends to weaken when global powers seek access to oil resources.
Oil has also been associated with political instability. For instance, in Nigeria, Bloomfield (2008) observed that oil has negatively influenced both the environment and political systems. Likewise, Boonstra et al. (2008) link increased oil revenues in Azerbaijan to declining democratic progress.
The discovery of oil in East Africa gained momentum after findings in Sudan and South Sudan in 1987, encouraging exploration in countries such as Uganda, Kenya, and Tanzania (Yabs, 2015). In Uganda, commercially viable oil reserves were discovered in the Albertine Graben in 2006. Since then, the government has planned large-scale projects including oil refineries, pipelines, and infrastructure development.
While these developments are expected to promote economic growth, job creation, and poverty reduction, they also require substantial land acquisition, leading to displacement of local communities (Ogwang et al., 2018).
Estimates indicate that Uganda holds approximately 3.5 billion barrels of oil reserves, with potential revenues of about USD 2 billion annually over 30 years (Kuteesa, 2014). Major international companies such as Total, CNOOC, and Tullow Oil have been licensed to develop these resources.
1.2 Statement of the Problem
Although oil exploration presents significant economic opportunities such as employment creation, increased trade, and economic growth (Sharma & Arora, 2012), it also brings challenges. These include environmental degradation, social disruption, and economic instability when governance and cultural concerns are not adequately addressed (Omorede, 2014).
In the Albertine region, oil activities have generated both positive and negative outcomes. However, the extent to which oil and gas discovery has influenced the growth and development of small and medium enterprises (SMEs) remains unclear. This study therefore seeks to examine this relationship.
1.3 Purpose of the Study
The study aims to examine the influence of oil and gas discovery on the growth and development of SMEs in the Albertine region, specifically in Buliisa District, Butiaba Sub-county.
1.4 Objectives of the Study
- To determine the influence of oil and gas investment on the growth and development of SMEs.
- To examine the relationship between the oil and gas industry and SME growth.
- To identify strategies for improving SME performance.
1.5 Research Questions
- What is the influence of oil and gas investment on SME growth and development?
- What relationship exists between the oil and gas industry and SMEs?
- What strategies can improve SME performance?
1.6 Scope of the Study
Geographical Scope:
The study will be conducted in the Albertine region.
Time Scope:
The study will cover the period from 2015 to 2026.
Content Scope:
The study will focus on the benefits and challenges of oil and gas discovery, as well as strategies to improve SME performance.
1.7 Significance of the Study
- The study will provide useful information for future researchers on oil and gas impacts.
- It will help the government understand challenges associated with oil exploration.
- It will contribute to academic knowledge on improving SME performance.
1.8 Conceptual Framework
Independent Variable: Oil and Gas Discovery
Dependent Variable: Growth and Development of SMEs
Moderating Variables: Policy, infrastructure, and governance
CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
This chapter reviews literature on the benefits and challenges of oil and gas discovery and strategies for improving SME performance.
2.1 Influence of Oil and Gas Investment on SME Growth
Natural resource discoveries present opportunities for economic transformation. Mawejje (2019) notes that oil in the Albertine region can promote socioeconomic development if risks are properly managed.
Oil activities in Uganda have led to infrastructure development and employment opportunities. However, negative effects such as displacement, inflation, environmental degradation, and reduced food security have also been observed (Ogwang et al., 2018; NAPE, 2016).
Land acquisition for oil projects has led to displacement and land conflicts. Poor governance and mismanagement risk creating a “resource curse,” as seen in countries like the Democratic Republic of Congo and Sudan (Mosbacher, 2013).
2.2 Relationship Between Oil and Gas Industry and SMEs
Oil exploration has significantly affected social and economic structures. Increased migration, land conflicts, and inequality have disrupted livelihoods. Women are particularly affected due to limited land ownership rights and reduced access to resources (NAPE, 2016).
Food security has also declined due to reduced agricultural activity and population pressure. Environmental risks such as oil spills and biodiversity loss further threaten livelihoods.
2.3 Strategies for Improving SME Performance
SMEs differ from large firms in structure, management, and access to resources (Storey, 1994). Key strategies for improving SME performance include:
- Adoption of modern technologies such as ERP systems
- Expansion of market share through marketing and diversification
- Increasing sales volume and profitability
- Improving logistics and supply chain systems
- Enhancing communication and information flow
- Reducing operational costs through automation
These strategies can enhance efficiency, competitiveness, and sustainability of SMEs.
CHAPTER THREE
METHODOLOGY
3.0 Introduction
This chapter outlines the research design, population, sampling techniques, data collection methods, and analysis procedures.
3.1 Research Design
The study will adopt a descriptive survey design using both qualitative and quantitative approaches to provide a comprehensive understanding of the research problem.
3.2 Study Population and Area
The study will focus on respondents in Buliisa District, Butiaba Sub-county.
3.3 Sampling Techniques
Both probability and non-probability sampling methods will be used, including simple random, stratified, purposive, and snowball sampling.
3.4 Sample Size
A sample size of 30 respondents will be selected using Krejcie and Morgan’s (1970) method.
3.5 Data Collection
Data will be collected from both primary and secondary sources using questionnaires and interviews.
3.6 Data Collection Instruments
- Questionnaires (for quantitative data)
- Interview guides (for qualitative data)
3.7 Data Analysis
Quantitative data will be analyzed using SPSS, while qualitative data will be analyzed thematically.
3.8 Ethical Considerations
The study will ensure confidentiality, informed consent, and voluntary participation.
3.9 Limitations of the Study
- Fear of respondents to provide information
- Limited time for participation
- Expectation of incentives by respondents
Conclusion
This study seeks to examine the impact of oil and gas discovery on SME growth in the Albertine region. The findings will contribute to policy formulation, academic research, and sustainable economic development.
