The Ugandan Economy
The recovery of the Ugandan economy in the last 10 years has been the subject of much positive praise by the World Bank and the IMF, both of whom have provided needed funding and policy support. The economy has been liberalised, with Government implementing measures to take control for running businesses out of public sector and giving control to the private sector. This programme has included the privatisation of non-strategic enterprises, encouragement of the development of the private sector, and the preparation of an environment conducive for foreign direct investment.
The economy of landlocked Uganda is predominantly based on agriculture, with small peasant landholdings producing both food and traditional cash crops. The cash crops that make up Uganda's principal exports are coffee, tea, and cotton, but recent diversification efforts have added flowers and horticulture. Uganda also exports fresh water fish from its abundant fresh water lakes, including Lake Victoria, to the European Union and the Far East. At the present stage of Uganda's economic development, manufacturing, construction and commerce sectors are far down the list as contributors to GDP. The economy is heavily dependent on imports of capital and consumer goods, including textiles, drugs, and petroleum products.
The Uganda shilling is the main trading currency and is fully convertible. Over recent years the shilling has been depreciating against all major hard currencies.
One of the current hindrances to further development of the economy is the weakness in infrastructure, particularly in energy and water. With the recently-privatised national operator introducing mobile phone services, there are now three GSM mobile phone operators in the country. This has greatly improved services in the telecommunications sector, with most areas outside the main towns now being accessible by mobile phone.
The Investment Code 1991 has virtually been abandoned with the resultant reduced attraction for inward investors. However, the Uganda Investment Authority has recently launched another campaign, the "Big Push" strategy to attract inward investment.