Uganda could dramatically overhaul its economy with the right management policies in place by the time oil starts flowing in 2018, the World Bank said.

"If oil resources are well managed, it could take the country a lot less time to achieve its national vision of attaining upper middle income by 2040," Christina Malmberg-Calvo, the World Bank country manager for Uganda, said in a statement.

By the World Bank's estimate, Uganda will start pumping oil within two years, which could help the country transform its economy and society dramatically if revenues are managed appropriately.

Uganda is categorized as a low-income nation with nearly 20 percent of the population living at or near the poverty level. The country's primary source of income pre-oil is agriculture.

A report from the International Monetary Fund in early June found Uganda had taken steps to build economic growth and keep inflation low.

"However, structural reforms have lagged and need to be revitalized to enhance competitiveness, promote economic diversification, and foster sustained and inclusive economic growth," the IMF's Min Zhu said in a statement.

The U.S. Energy Information Administration said Uganda holds an estimated 2.5 billion barrels of oil reserves. The Ugandan government estimates it could recover about half of that, but if production isn't in full swing by 2018, the Bank of Uganda warned there may be long-term problems for the nation's economy.

British exploration company Tullow Oil published a report in 2013 on its Ugandan developments. It said it has uncovered more than 1 billion barrels of oil in Uganda since operations began and most of that was in the country's Lake Albert basin.

Once production begins, the World Bank estimates Uganda could bring in up to $2 billion per year in revenues. That revenue needs to be allocated in a way that's transparent, equitable and accountable, the bank's report said.

"This requires pumping back the oil profits in to sectors that will have huge economic spill-overs to the most vulnerable and poorest," Malmberg-Calvo said.