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Economy of Uganda

From Academic Kids

Uganda's economy has great potential. Endowed with significant natural resources, including ample fertile land, regular rainfall, and mineral deposits, it appeared poised for rapid economic growth and development at independence. However, chronic political instability and erratic economic management produced a record of persistent economic decline that left Uganda among the world's poorest and least-developed countries.

After the turmoil of the Amin era, the country began a program of economic recovery in 1981 that received considerable foreign assistance. From mid-1984 on, however, overly expansionist fiscal and monetary policies and the renewed outbreak of civil strife led to a setback in economic performance.

Missing image
UgandanShillings20000.jpg
The twenty-thousand Ugandan shilling banknote, issued by the Bank of Uganda.

Since assuming power in early 1986, Museveni's government has taken important steps toward economic rehabilitation. The country's infrastructure--notably its transport and communications systems which were destroyed by war and neglect--is being rebuilt. Recognizing the need for increased external support, Uganda negotiated a policy framework paper with the IMF and the World Bank in 1987. It subsequently began implementing economic policies designed to restore price stability and sustainable balance of payments, improve capacity utilization, rehabilitate infrastructure, restore producer incentives through proper price policies, and improve resource mobilization and allocation in the public sector. These policies produced positive results. Inflation, which ran at 240% in 1987 and 42% in June 1992, was 5.4% for fiscal year 1995-96 and 7.3% in 2003.

Investment as a percentage of GDP was estimated at 20.9% in 2002 compared to 13.7% in 1999. Private sector investment, largely financed by private transfers from abroad, was 14.9% of GDP in 2002. Gross national savings as a percentage of GDP was estimated at 5.5% in 2002. The Ugandan Government has also worked with donor countries to reschedule or cancel substantial portions of the country's external debts.

Agricultural products supply nearly all of Uganda's foreign exchange earnings, with coffee alone (of which Uganda is Africa's leading producer) accounting for about 27% of the country's exports in 2002. Exports of apparel, hides, skins, vanilla, vegetables, fruits, cut flowers, and fish are growing, and cotton, tea, and tobacco continue to be mainstays.

Most industry is related to agriculture. The industrial sector is being rehabilitated to resume production of building and construction materials, such as cement, reinforcing rods, corrugated roofing sheets, and paint. Domestically produced consumer goods include plastics, soap, cork, beer, and soft drinks.

Uganda has about 30,000 kilometers (18,750 mi.), of roads; some 2,800 kilometers (1,750 mi.) are paved. Most radiate from Kampala. The country has about 1,350 kilometers (800 mi.) of rail lines. A railroad originating at Mombasa on the Indian Ocean connects with Tororo, where it branches westward to Jinja, Kampala, and Kasese and northward to Mbale, Soroti, Lira, Gulu, and Kapwach. Uganda's important road and rail links to Mombasa serve its transport needs and also those of its neighbors-Rwanda, Burundi, and parts of Congo and Sudan. An international airport is at Entebbe on the shore of Lake Victoria, some 32 kilometers (20 mi.) south of Kampala.

GDP: purchasing power parity - $24.2 billion (1999 est.)

GDP - real growth rate: 5.5% (1999 est.)

GDP - per capita: purchasing power parity - $1,060 (1999 est.)

GDP - composition by sector:
agriculture: 44%
industry: 17%
services: 39% (1997 est.)

Population below poverty line: 55% (1993 est.)

Household income or consumption by percentage share:
lowest 10%: 3%
highest 10%: 33.4% (1992)

Inflation rate (consumer prices): 7% (1999)

Labor force: 8.361 million (1993 est.)

Labor force - by occupation: agriculture 82%, industry 5%, services 13% (1999 est.)

Unemployment rate: NA%

Budget:
revenues: $959 million
expenditures: $1.04 billion, including capital expenditures of $NA (FY98/99 est.)

Industries: sugar, brewing, tobacco, cotton textiles, cement

Industrial production growth rate: 9.3% (FY98/99)

Electricity - production: 792 million kWh (1998)

Electricity - production by source:
fossil fuel: 0.88%
hydro: 99.12%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 622 million kWh (1998)

Electricity - exports: 115 million kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: coffee, tea, cotton, tobacco, cassava (tapioca), potatoes, maize, millet, pulses; beef, goat meat, milk, poultry

Exports: $471 million (f.o.b., 1999)

Exports - commodities: coffee, fish and fish products, tea; electrical products, iron and steel

Exports - partners: EU 51% (Netherlands 6%, Switzerland 6%, Germany 5%, Belgium 4%), Kenya 5% (1998)

Imports: $1.1 billion (f.o.b., 1999)

Imports - commodities: vehicles, petroleum, medical supplies; cereals

Imports - partners: Kenya 12%, UK 6%, Japan 4%, India 4%, South Africa (1998)

Debt - external: $3.1 billion (1998 est.)

Economic aid - recipient: $839.9 million (1997)

Currency: 1 Ugandan shilling (USh) = 100 cents

Exchange rates: Ugandan shillings (USh) per US$1 - 1,788.5 (June 25, 2004), 1,525.8 (January 2000), 1,454.8 (1999), 1,240.2 (1998), 1,083.0 (1997), 1,046.1 (1996), 968.9 (1995)

Fiscal year: 1 July - 30 June

See also

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