Earliest History – Prehistoric Times

Earliest History – Prehistoric Times

Long before East Africans came into contact with outside traders, traditional East African communities were exchanging goods and wares through barter trade, a system dating back to prehistoric times. At market days, which were a customary part of cultural life, some of the most valuable items of exchange were livestock, ironware, salt, weapons, beads, cowrie shells as well as foodstuffs.

Early History Development of Trade Routes: 300 CE – 1300 CE

Early Trade Developmrnt

East African coastal cities participated in a larger Afro-Asian trade network a thousand years before Vasco Da Gama peeked around the Cape of Good Hope to find the way to sail to India. Gujarati traders were already crisscrossing the ocean for biashara with the Swahili Coast of Eastern Africa. As far back as the 3rd c. CE, the banana, domesticated in India, came to Madagascar (and thence to the African continent) as part of the broad Afro-Asian/Indian Ocean trading community. By the 13th Century, Africa was well integrated in the global trading pattern. This trade also involved slave trade where slaves were acquired from the East African Coastal tribes and sold to Asian markets for use as hands on labour in their vast plantations and fields.

Slave Trade Opens Up Eastern Africa to Trade: 7 CE – 1900 CE

7CE to 1900

Exports of slaves to the Muslim world via the Indian Ocean became more defined after Muslim Arab and Swahili traders won control of the Swahili Coast and sea routes during the 9th century. These traders captured Bantu peoples (Zanj) from the interior in the present-day lands of Kenya, Areas around lake Victoria, Mozambique and Tanzania and brought them to the coast. Muslim merchants traded an estimated 1000 East African slaves annually between 800 and 1700, a number that grew to c. 4000 during the 18th century, and 3700 during the period 1800–1870.  When estimating the number of people enslaved from East Africa, author N’Diaye and French historian Olivier Pétré-Grenouilleau estimate 17 million as the total number of people transported from the 7th century until 1920, amounting to an average of 6,000 people per year. Many of these slaves were transported by the Indian Ocean and Red Sea via Zanzibar. The captives were sold throughout the Middle East. This trade accelerated as superior ships led to more trade and greater demand for labour on plantations in the region. Eventually, tens of thousands of captives were being taken every year. Slave labor in East Africa was drawn from the Zanj, Bantu peoples that lived along the East African coast mainly as well as, outcasts and victims of tribal wars from within the heart of Africa including Uganda. The Zanj were for centuries shipped as slaves by Muslim traders to all the countries bordering the Indian Ocean. The Umayyad and Abbasid caliphs recruited many Zanj slaves as soldiers and, as early as 696, there were revolts of Zanj slave soldiers in Iraq. A 7th-century Chinese text mentions ambassadors from Java presenting the Chinese emperor with two Seng Chi (Zanj) slaves as gifts in 614.

The Development of Trade Routes: 1500 CE – 1900 CE

1500CE to 1900CE

As the slave industry kept on booming, other valuable trade products greatly desired by international markets were discovered within the heart of central Africa and were thus brought onto the market scene. Further inland, the Kamba, of what is now Kenya, and the Nyamwezi of erstwhile Tanganyika, formed the trader’s networks that linked the ports of the Swahili Coast to the wealth of the heart of Africa. (Roberts, 1970; Cummings, 1975)  Copper from Katanga vied with ivory and gold to pay for the textiles and metals. Caravan routes laid down in centuries past are reflected in the roads and rails of today. The pioneers of all the major routes were African traders. Nyamwezi caravans from central Tanzania, reaching the coast about 1800, developed the most important route from their homeland to Bagamoyo on the mainland directly opposite Zanzibar. Kamba ivory traders from central Kenya opened a route that ended at Mombasa. Eventually, this route crossed Kamba and Maasai country, branching east towards Uganda and north to Lake Turkana. The oldest route stretched from Yao country to Kilwa.

Buganda Kingdom Paves the Way for International Trade in Uganda – 1800s – 1900s:

1800s to 1900s:

Buganda Kingdom Paves the Way for International Trade in Uganda – 1800s – 1900s: Even with the development of new trade routes, until the middle of the 19th century, Uganda remained relatively isolated from the outside world. The central African lake region was a world in miniature, with an internal trade system, a great power rivalry between Buganda Kingdom and Bunyoro Kingdom, and its own inland seas. When significant intrusion from the outside world finally came, it was in the form of long-distance trade for ivory.  Ivory had been a staple trade item from the coast of East Africa since before the Christian era. But growing world demand in the 19th century, together with the provision of increasingly efficient firearms to hunters, created a moving “ivory frontier” as elephant herds near the coast were nearly exterminated. Large caravans financed by Indian money lenders, Arab traders based in Zanzibar reached Lake Victoria by 1844. One trader, Ahmad bin Ibrahim, introduced Buganda’s Kabaka (King) to the advantages of foreign trade: the acquisition of imported cloth and, more important, guns and gunpowder. Ibrahim also introduced the religion of Islam, but the Kabaka was more interested in guns. By the 1860s, Buganda Kingdom was the destination of ever more trade caravans, and the Kabaka and his chiefs began to dress in cloth called “mericani” (derived from “American”). This cloth was woven in Massachusetts and was carried to Zanzibar by American traders. It was believed to be finer in quality, more than European or Indian cloth, and increasing numbers of ivory tusks were collected to pay for it using barter trade. Bunyoro Kingdom, Buganda Kingdom`s neighbor to the West wanted to keep up with Buganda`s economic growth and therefore also sought to attract foreign trade, in an effort to keep up with Buganda in the burgeoning arms race. Uganda in this era was not yet the country we know today. By the 1800s, it was still structured in political units called Kingdoms and Chiefdoms and Buganda Kingdom was the most powerful inland political unit (Kingdom) in Eastern Africa at the time. Traders from the East and West passed through Buganda Kingdom as its people were found to be helpful, very receptive to foreigners and understood the value of partnerships in building the Kingdom economically and politically. In addition, it had set laws that governed its people and well defined systems of governance.

Building The Uganda Railways to Facilitate Trade in Uganda – 1890s

Uganda to 1890s

By the 1890s, 32,000 laborers from British India were recruited to East Africa under indentured labour contracts to construct the Uganda Railway. Most of the surviving Indians returned home, but 6,724 decided to remain in East Africa after the line’s completion. Subsequently, some became traders and took control of cotton ginning and sartorial retail. From 1900 to 1920, a sleeping sickness epidemic in the southern part of Uganda, along the north shores of Lake Victoria, killed more than 250,000 people. Almost from its inception the Uganda Railway developed shipping services on Lake Victoria. In 1898, it launched the 110-ton SS William Mackinnon at Kisumu, having assembled the vessel from a kit supplied by Bow, McLachlan and Company of Paisley in Scotland. A succession of further Bow, McLachlan & Co. kits followed. The 662 ton sister ships SS Winifred and SS Sybil (1902 and 1903), the 1,134 ton SS Clement Hill (1907) and the 1,300 ton sister ships SS Rusinga and SS Usoga (1914 and 1915) were combined passenger and cargo ferries. The 812-ton SS Nyanza (launched after Clement Hill) was purely a cargo ship. The 228-ton SS Kavirondo launched in 1913 was a tugboat. Two more tugboats from Bow, McLachlan were added in 1925: SS Buganda and SS Buvuma. On the other hand, the Uganda railway was of strategic importance to Uganda`s trade economy. As the region was transitioning from the era of slave trade, it provided an important strategic transport alternative at greatly reduced costs of transport from Uganda to the Coast. All major cash crops introduced in Uganda by the British like cotton, coffee, tobacco, tea and minerals like copper were all transported from Uganda using the Uganda railway. The railway network was also the all-important golden thread that wove the East African Community together to become economically codependent on each other.

Uganda Trades as a British Protectorate: 1894 -1962

1894 to 1962

Uganda Trades as a British Protectorate: 1894 -1962 The Protectorate of Uganda was a protectorate of the British Empire from 1894 to 1962. In 1893 the Imperial British East Africa Company transferred its administration rights of territory consisting mainly of the Kingdom of Buganda to the British government. In 1894 the Uganda Protectorate was established, and the territory was extended beyond the borders of Buganda to an area that roughly corresponds to that of present-day Uganda. In many areas of Uganda, by contrast, agricultural production was placed in the hands of Africans, if they responded to the opportunity. Cotton cultivation increased in importance after 1904, and once it became clear that cotton plantations would be too difficult and expensive to maintain, official policy encouraged smallholder farmers to produce and market their cotton through local cooperative associations. Cotton was the crop of choice, largely because of pressure by the British Cotton Growing Association, textile manufacturers who urged the colonies to provide raw materials for British mills. This was done by cash cropping the land. Even the CMS joined the effort by launching the Uganda Company (managed by a former missionary) to promote cotton planting and to buy and transport the produce. By 1910 cotton had become Uganda’s leading export. In the following decades, the government encouraged the growth of sugar and tea plantations. Following World War II, officials introduced coffee cultivation to bolster declining export revenues, and coffee soon earned more than half of Uganda’s export earnings. Buganda, with its strategic location on the lakeside, reaped the benefits of cotton growing. The advantages of this crop were quickly recognized by the Buganda chiefs who had newly acquired freehold estates, which came to be known as mailo land because they were measured in square miles. In 1905 the initial baled cotton export was valued at £200; in 1906, £1,000; in 1907; £11,000; and in 1908, £52,000. By 1915 the value of cotton exports had climbed to £369,000, and Britain was able to end its subsidy of colonial administration in Uganda, while in Kenya the white settlers required continuing subsidies by the home government. The income generated by cotton sales made the Uganda but more particularly Buganda kingdom relatively more prosperous, compared to the rest of colonial Uganda, although before World War I cotton was also being grown in the eastern regions of Busoga, Lango, and Teso. Many Baganda spent their new earnings on imported clothing, bicycles, metal roofing, even cars and many also invested in their children’s education. The Christian missions emphasized literacy skills, and African converts quickly learned to read and write. By 1911 two popular journals, Ebifa (News) and Munno (Your Friend), were published monthly in Luganda. Uganda enjoyed a strong and stable economy in the years approaching independence. Agriculture was the dominant activity, but the expanding manufacturing sector appeared capable of increasing its contribution to GDP, especially through the production of foodstuffs and textiles. Some valuable minerals, notably copper, had been discovered, and water power resources were substantial. In 1967 Uganda and the neighboring countries of Kenya and Tanzania joined together to form the East African Community (EAC), hoping to create a common market and share the cost of transport and banking facilities, and Uganda registered impressive growth rates for the first eight years after independence.

Uganda`s Independence and The Rise of Trade Unions 1962-1971

1962 to 1971

Ugandan got her independence in 1962 and was officially named the Sovereign State of Uganda between 1963 and 1967 and had President King Muteesa 1 as her first President with Dr. Milton Obote as his Prime Minister, before becoming the Republic of Uganda upon the enactment of the 1967 constitution under the leadership of the Uganda People’s Congress Party (UPC). After her independence, Uganda saw more trade unions emerge with the formation of the Uganda African Motor Drivers’ Association in 1939. However, it should be noted that the Uganda Trade Union Congress (UTUC), founded in 1955, was the country’s first national centre. The growth of trade unions led to the creation and fostering professionalism in trade as persons that intended to pursue particular areas of trade could not if they were not registered with the trade union concerned with the trade they are interested in. Industries like cotton growers, coffee growers, cocoa growers, tea growers all had unions to which they belonged. These unions were primarily used as training hubs and also market control centers where prices for labour and costs of products were discussed and agreed upon between producers and buyers. As trade unions grew in the late 1950s and early 1960s, workers from outside Uganda became involved. This was especially the case of Kenyan workers fleeing British repression during the Mau Mau Uprising. The newly independent government was fearful of the infusion of Kenyan workers who were perceived to be militant and framed trade union law in ways which were considered more draconian than during the colonial period. For example, at the time, non-Ugandans were banned from holding any position within a trade union. The UPC had had no effective urban organization before independence, although it was able to mobilize the trade unions, most of which were led by non-Ugandan immigrant workers from Kenya (a situation which contributed to the independent Uganda government’s almost immediate hostility toward trade unions). In addition, the leadership of Dr. Milton Obote ushered in an era of severe repression as he abolished kingdoms, consolidated all political, economic and social power with himself and created a strong sense of fear among highly qualified Ugandans and for private investors. This led to many educated Ugandans leaving the country and investing their skills and resources in other markets considered more stable and profitable. And thus Uganda started its steady economic decent.

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

1971 to 1986

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.

Uganda`s First Futile Attempts at Trade and Economic recovery: 1980 – 1985

1980 to 1985

Uganda`s First Futile Attempts at Trade and Economic recovery: 1980 – 1985

Amin was overthrown in 1979 by a coalition of domestic forces under the banner of the Uganda National Liberation Front (UNLF) with strong support of the neighbouring Tanzanian army. Following Amin’s departure, successive governments attempted to restore international confidence in the economy through a mixture of development plans and austere government budgets. Beginning in 1980, the second government of Milton Obote obtained foreign donor support, primarily from the International Monetary Fund (IMF), by floating the Uganda shilling (USh), removing price controls, increasing agricultural producer prices, and setting strict limits on government expenditures. In addition, Obote tried to persuade foreign companies to return to their former premises, which had been nationalized under Amin. These recovery initiatives created real growth in agriculture between 1980 and 1983. After the turmoil of the Amin period, the country began a program of economic recovery in 1981 that received considerable foreign assistance in aid. The aid was meant to facilitate the country`s trade and economic recovery. This aid was dependent upon Uganda liberalizing the economy with the hope that free market forces would make it more competitive in the world economy. Funds from the Bretton Woods institutions to boost production and exports began to increase, while political goodwill from the international community and willingness to trade with, and to invest in the country also rose considerably. From mid-1984 onward, overly expansionist fiscal and monetary policies and the renewed outbreak of civil strife led to a setback in economic performance. With the increase in rebel activities of the National Resistance Movement, state resources were diverted to fighting rebels and many economic programs meant to help Uganda`s state of trade and economy were greatly disrupted. The IMF and World Bank reforms had to be abandoned in 1983 due to the civil war and were only reintroduced in 1988 by the new regime of President Yoweri. The lack of foreign exchange was a major constraint on government efforts, however, and it became a critical problem in 1984 when the IMF ended its support following a disagreement over budget policy. Milton Obote was overthrown in 1985 by his military commander Tito Okello Lutwa whose regime lasted from May 1985 to January 1986, when he was overthrown by Yoweri Museveni. During the brief regime of Tito Lutwa Okello in 1985, the economy slipped almost out of control as civil war extended across the country. By the time Dr. Milton Obote was over thrown, his Presidency had started taking steps to grow Uganda but had not yet achieved resoundingly significant/ recorded positive achievements for Uganda`s trade and economic state.

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

1986 to 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.