Uganda : Economy

Economy

GNI: 
US$20.8bn
GNI PC: 
US$510
GDP Growth: 
5.8% p.a. 2009–13
Inflation: 
10.9% p.a. 2009–13

During the years of civil war and instability GDP declined dramatically, falling by 14.8 per cent a year between 1978 and 1980, and the economy declined not only in size but also in sophistication. It grew by only 2.9 per cent p.a. 1980–90, and by 1988 it had only recovered to close to 1972 levels.

When it came to power in 1986 the National Resistance Movement inherited a dreadful legacy. It embarked on a programme of structural adjustment and during the following decade the economy grew at an average 6.5 per cent p.a. Tight fiscal and monetary discipline has been accompanied by trade liberalisation and a programme of privatisation. By 2004 about two-thirds of some 140 public enterprises had been transferred into private hands. Strong growth was achieved with relatively low inflation (generally in single figures from the early 1990s), greatly reduced budget deficits and a relatively stable exchange rate. Manufacturing output grew by 14.1 per cent p.a. 1990–2000. The main exports are coffee, fish and fish products (freshwater fish), gold, cotton, tobacco and tea.

However, this economic performance has not been sufficiently broad-based to raise living standards and quality of life for the majority of the people, and by 2000 the government had refocused its policy on poverty eradication.

Uganda was the first country to qualify for and benefit from the IMF/World Bank Heavily Indebted Poor Countries Initiative (in April 1998) with debt relief of US$700 million. In 2000, Uganda qualified for further debt relief under the Enhanced HIPC Initiative, ensuring a further US$1.3 billion reduction of its external debt.

The economy continued to grow at generally more than five per cent p.a. in the 2000s, more strongly from 2005, remaining above seven per cent p.a., even in the world economic downturn of 2008–09, in part due to strong agricultural production. From 2010 growth moderated slightly and continued generally at about six per cent p.a. in 2010–15. It was 6.0 per cent in 2013 and an estimated 5.9 per cent in 2014.

Oil and gas: 

Oil has been discovered in the basin of Lake Albert in the west of the country. By September 2012 estimated reserves of 3.5 billion barrels had been reported, confirming that Uganda was to become a significant oil-exporter in the 2010s.