1986 to 2020 - Uganda Begins Her Road to Trade and Economic Recovery 1986-2020

President Yoweri Kaguta Museveni assumed power in early 1986 after over throwing Tito Lutwa Okello. After seizing power in January 1986, the new NRM government published a political manifesto that had been drawn up when the NRM was an army of antigovernment rebels. Several points in the Ten-Point Program emphasized the importance of economic development, declaring that an independent, self-sustaining national economy was vital to protect Uganda’s interests. The manifesto also set out specific goals for achieving this self-sufficiency: diversifying agricultural exports and developing industries that used local raw materials to manufacture products necessary for development. The Ten-Point Program also set out other economic goals: to improve basic social services, such as water, health care, and housing; to improve literacy skills nationwide; to eliminate corruption, especially in government; to return expropriated land to its rightful Ugandan owners; to raise public-sector salaries; to strengthen regional ties and develop markets among East African nations; and to maintain a mixed economy combining private ownership with an active government sector.

The NRM government proposed a major Rehabilitation and Development Plan (RDP) for fiscal years (FY) 1987-88 through 1990-91, with IMF support; it then devalued the shilling and committed itself to budgetary restraint. The four-year plan set out primarily to stabilize the economy and promote economic growth. More specific goals were to reduce Uganda’s dependence on external assistance, diversify agricultural exports, and encourage the growth of the private sector through new credit policies. Setting these priorities helped improve Uganda’s credentials with international aid organizations and donor countries of the West, but in the first three years of Museveni’s rule, coffee production remained the only economic activity inside Uganda to display consistent growth and resilience. When coffee-producing nations failed to reach an agreement on prices for coffee exports in 1989, Uganda faced devastating losses in export earnings and sought increased international assistance to stave off economic collapse.

Over the 35-year rule of the National Resistance Movement Party headed by H.E President Yoweri Kaguta Museveni, the country’s infrastructure, notably its transport and communications systems which were destroyed by war and neglect, have been rebuilt. Uganda now has six active mobile operators and a total of appx 22.8 million mobile subscribers. From 1987, Uganda 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 so-called Structural Adjustment Programs greatly improved the shape of the Ugandan economy, but did not lead to economic growth in the first decade after their implementation. Since 1995, Uganda has experienced rapid economic growth, and although the country has been a member of the General Agreement on Tariffs and Trade, from 25 October 1962, her commitment to trade and economic recovery and growth was cemented when the country became a member of the World Trade Organization, on 1 January 1995.

In light of the above, Uganda`s Imports have increased from US $ 5 million in 1986 to US$ 585.31 million in January 2020 with the country mainly importing petroleum oils (18.9%), gold (5%), medicines (3.5%), palm oil (3.5%), ferrous products (2, 6%), motor vehicles (2.5%), wheat and meslin (2.3%).

There has been a significant rise in export revenue from non-traditional exports, from $3 million in 1986 to 533 million US dollars in 2020. The main exports by 2020 being Coffee, tea, spices: US$441.2 million (33.6% of total exports), Fish: $163.2 million (12.4%), Dairy, eggs, honey: $134.5 million (10.3%), Cocoa: $69.5 million (5.3%), Live trees, plants, cut flowers: $61.3 million (4.7%), Tobacco, manufactured substitutes: $55 million (4.2%), Oil seeds: $42.1 million (3.2%), Wood: $38.4 million (2.9%), Sugar, sugar confectionery: $38.1 million (2.9%), Cotton: $33 million (2.5%).

To better facilitate trade, Uganda has constructed 6 One Stop Border Posts in Busia, Malaba, Katuna, Mirama Hills, Mutukula and Elegu had been created to ease cross border trade within the East African Region, markets in all major towns in the country and trade distribution centres like Kikuubo in Kampala among others from where many imported goods get distributed to the rest of the country.

The country has also invested heavily in developing road infrastructure, schools, hospitals to improve health, skills and knowledge among the youth required to provide critical labour to the growing trade economy.

The Ugandan economy reported strong growth in 2019, estimated at 6.3%, largely driven by the expansion of services. Services growth averaged 7.6% in 2019, and industrial growth 6.2%, driven by construction and mining. Agriculture grew at just 3.8%. Retail, construction, and telecommunications were key economic drivers. Inflation was expected to remain below 5%, strengthening the domestic economy.

To further boost trade and industry within the country, The Uganda Investment Authority Board in 2017 approved an additional 1 industrial park in Buliisa and 4 regional science and technology industrial parks making a total of 27 industrial parks located in various districts across the country. These parks will be used to maximize industrial resources like power and access to raw materials and can be taken advantage of by both local and international strategic investors. These industrial parks are used to add value to locally available raw materials thus boosting the agricultural and mineral sectors.

Government spending continues to increase, underpinned by public infrastructure and capital investments for the nascent oil and gas industry. Expenditures have increased faster than domestic revenues, widening the fiscal deficit in 2019. The deficit is largely financed through external borrowing, supplemented with domestic securities. Despite the rise in the deficit, Uganda is classified at low risk of debt distress. However, debt reached an estimated 43.6% of GDP in 2019, up from 25% in 2012, raising medium-term concerns. Lending remains within IMF limits, but risks have increased due to higher costs of debt servicing and infrastructure investments.

By 2021 because of the effects of the Corona Virus Pandemic on the country`s economic activities, real GDP growth is expected to contract by up to 1%, compared to 7.5% growth in 2019, and, as a result, real per capita GDP growth is expected to contract by about 4.5%.

In conclusion, Uganda has had its fair share of severe economic, political and social setbacks, however, with steady leadership, the country is quickly getting back on its feet.  President Museveni`s administration has been very keen on creating a strong sense of peace, security and freedom which has led to better retaining of the country`s skilled labour and resources, providing stable and better investment climate for foreign investors and improving the trade networks with other countries within the East African region. Although the country is highly fragmented, socially (Culturally), politically and religiously, the current administration has been proactive in building bridges and respecting the social-cultural differences within the country. This is evidenced by the restoration of Cultural Kingdoms in 1993 as recognized, organized social entities that give Ugandans their true sense of identity and belonging. With this, fragments are beginning to respectfully work with each other instead of against each other for the greater good of all Ugandans.

Saint Kaggwa Pilgrimages And Safaris | Design Javanet Systems