Uganda`s Trade & Industry Falls Even Further: 1971 – 1986

Idi Amin Dada over threw Dr. Milton Obote and took over Uganda in 1971. The period 1971-86 both the Ugandan economy and the Ugandan society collapsed. Amin used nationalist, militarist rhetoric and ill-chosen economic policies to eliminate foreign economic interests and build up the military establishment. In 1972 President Idi Amin declared `economic war’ against the large and commercially dominant Asian community; he expelled holders of British passports, including approximately 70,000 Asians of Indian and Pakistani descent. This marked the beginning of an economic collapse and of escalating political and social disorder. Many Asians had been active in agribusiness, manufacturing, and commerce. Their mass expulsion and Amin’s efforts to expropriate foreign businesses undermined investor confidence in Uganda. The businesses of the expelled Asians were randomly awarded to Amin`s army cronies who without any experience in trade and economy, run them into nothingness within less than 2 years. Amin also increased public expenditures on military goods, a practice that contributed to escalating foreign and domestic debt during the 1970s. Relations with Uganda’s neighbors soured, the EAC disbanded in 1977, and Tanzanian troops finally led a joint effort to overthrow the unpopular Amin regime in 1979. By 1980 the economy was nearly destroyed. The country suffered the predations of Idi Amin and three further transient presidents, including civil war, mass emigration of the skilled, and mass murder.

By the end of Amin`s Presidency, Uganda had many citizens with very little education, high poverty, they also had a high dependence upon natural resources, partial democracy, ethnic and religious homogeneity was almost non-existence, Uganda`s trade and economy inevitably went into escalated free fall.

Because of this, this era was marked with severe plunder and murder where the government became predatory on its people that most of the country`s economic wealth and human resources were invested in foreign countries. The development crisis in Uganda began in the 1970s with the rise to power of Idi Amin (1971-79). The history of this time suffices to emphasize that Amin’s administration destroyed the economy, disorganized the industrial and other economic infrastructure, and triggered a spiral of economic mismanagement. Analysis of statistical records of the 1970s and 1980s reveals a virtual absence of heavy industries. Bulk of manufacturing activities in Uganda (at a stage of light industries) were characterised by low value addition. Three sub-categories of light industries stand out: food, beverages, and tobacco; wood and wood products; and the ‘miscellaneous’ sub-sector. Among these, the most distinctive sub-categories were sugar, beer, spirits, and pipe tobacco.

The availability of cheap labour and the high cost of imported technology meant that light industries (such as foods and beverages) were a natural starting point in the path to industrialization. The problem was that while output increased in a number of industrial sectors in the 1960s, it substantially declined in virtually all sectors after 1970. For example, in the machinery sub-category (which would serve as a basis for heavy industrialisation), the steel ingots declined by over 90 percent from 19,500 tons in 1970 to only 1,900 tons in 1980. Superphosphate production (a potential growth-pole of chemical industries) declined from 24,800 tons in 1970 to 0.0 tons in 1980. In short, at a stage of development where Uganda should have been experiencing its industrial transformation and deepening, Uganda was instead registering declining output in both light industries and the potential growth poles for heavy industrialisation leading to Uganda`s experiencing a steady ‘death’ of its industrial vitality. By 1979 when Amin was overthrown, up to 500,000 Ugandans had died as a result of the regime and there had been two insurgency attempts by exiles.

Since 1971, per capita income had declined by around 40% and the composition of economic activity had changed radically. In short, Uganda was simply unfortunate to be led by particular personalities, notably Dr. Milton Obote and Idi Amin, that contributed to driving deep the instruments of social and economic disharmony in the country.