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Uganda Economy
 
 
 

General

For decades, Uganda's economy suffered from devastating economic policies and instability, leaving Uganda as one of the world's poorest countries. The country has commenced economic reforms and growth has been robust. In 2008, Uganda recorded 7% growth despite the global downturn and regional instability.

Uganda has substantial natural resources, including fertile soils, regular rainfall, and sizeable mineral deposits of copper and cobalt. The country has largely untapped reserves of both crude oil and natural gas. While agriculture used to account for 56% of the economy in 1986, with coffee as its main export, it has now been surpassed by the services sector, which accounted for 52% of percent GDP in 2007. In the 1950s the British Colonial regime encouraged some 500,000 subsistence farmers to join co-operatives. Since 1986, the government (with the support of foreign countries and international agencies) has acted to rehabilitate an economy devastated during the regime of Idi Amin and subsequent civil war. Inflation ran at 240% in 1987 and 42% in June 1992, and was 5.1% in 2003.

Between 1990 and 2001, the economy grew because of continued investment in the rehabilitation of infrastructure, improved incentives for production and exports, reduced inflation, gradually improved domestic security and the return of exiled Indian-Ugandan entrepreneurs between 1990 and 2001. Ongoing Ugandan involvement in the war in the Democratic Republic of the Congo, corruption within the government, and slippage in the government's determination to press reforms raise doubts about the continuation of strong growth.

In 2000, Uganda was included in the Heavily Indebted Poor Countries (HIPC) debt relief initiative worth $1.3 billion and Paris Club debt relief worth $145 million. These amounts combined with the original HIPC debt relief added up to about $2 billion. In 2006 the Ugandan Government successfully paid all their debts to the Paris Club, which meant that it was no longer in the (HIPC) list. Growth for 2001-2002 was solid despite continued decline in the price of coffee, Uganda's principal export. According to IMF statistics, in 2004 Uganda's GDP per capita reached $300, a much higher level than in the 1980s but still at half the Sub-Saharan African average income of $600 per year. Total GDP crossed the $8 billion mark in the same year.

Economic growth has not always led to poverty reduction. Despite an average annual growth of 2.5% between 2000 and 2003, poverty levels increased by 3.8% during that time. This has highlighted the importance of avoiding jobless growth and is part of the rising awareness in development circles of the need for equitable growth not just in Uganda, but across the developing world.

With the Uganda securities exchanges established in 1996, several equities have been listed. The Government has used the stock market as an avenue for privatisation. All Government treasury issues are listed on the securities exchange. The Capital Markets Authority has licensed 18 brokers, asset managers and investment advisers including names like African Alliance, AIG Investments, Renaissance Capital and SIMMS. As one of the ways of increasing formal domestic savings, Pension sector reform is the centre of attention (2007).

Uganda depends on Kenya for access to international markets. Uganda is part of the East African Community and a potential member of the planned East African Federation.

Overview

Economy - overview :
Uganda has substantial natural resources, including fertile soils, regular rainfall, small deposits of copper, gold, and other minerals, and recently discovered oil. Uganda has never conducted a national minerals survey. Agriculture is the most important sector of the economy, employing over 80% of the work force. Coffee accounts for the bulk of export revenues. Since 1986, the government - with the support of foreign countries and international agencies - has acted to rehabilitate and stabilize the economy by undertaking currency reform, raising producer prices on export crops, increasing prices of petroleum products, and improving civil service wages. The policy changes are especially aimed at dampening inflation and boosting production and export earnings. Since 1990 economic reforms ushered in an era of solid economic growth based on continued investment in infrastructure, improved incentives for production and exports, lower inflation, better domestic security, and the return of exiled Indian-Ugandan entrepreneurs. Uganda has received about $2 billion in multilateral and bilateral debt relief. In 2007 Uganda received $10 million for a Millennium Challenge Account Threshold Program. The global economic downturn has hurt Uganda's exports; however, Uganda's GDP growth is still relatively strong due to past reforms and sound management of the downturn. Oil revenues and taxes will become a larger source of government funding as oil comes on line in the next few years. Instability in southern Sudan is the biggest risk for the Ugandan economy in 2011 because Uganda's main export partner is Sudan and Uganda is a key destination for Sudanese refugees.

GDP (purchasing power parity) :
$41.7 billion (2010 est.)

GDP (official exchange rate) :
$17.12 billion (2010 est.)

GDP - real growth rate :
5.8% (2010 est.)

GDP - per capita (PPP) :
$1,200 (2010 est.)

GDP - composition by sector :
agriculture: 23.6%
industry: 24.5%
services: 51.9% (2010 est.)

Labour force :
15.51 million (2010 est.)

Labour force - by occupation :
agriculture: 82%
industry: 5%
services: 13% (1999 est.)

Unemployment rate :
NA%

Population below poverty line :
35% (2001 est.)

Household income or consumption by percentage share :
lowest 10%: 2.6%
highest 10%: 34.1% (2005)

Distribution of family income - Gini index :
45.7 (2002)

Investment (gross fixed) :
20.9% of GDP (2010 est.)

Budget :
revenues: $2.457 billion
expenditures: $2.938 billion (2010 est.)

Public debt :
20.4% of GDP (2010 est.)

Inflation rate (consumer prices) :
9.4% (2010 est.)

Central bank discount rate :
9.65% (31 December 2009)

Commercial bank prime lending rate :
20.96% (31 December 2009 est.)

Stock of narrow money :
$1.997 billion (31 December 2010 est)

Stock of broad money :
$3.905 billion (31 December 2010 est.)

Stock of domestic credit :
$1.882 billion (31 December 2010 est.)

Market value of publicly traded shares :
$NA (31 December 2009)

Agriculture - products :
coffee, tea, cotton, tobacco, cassava (tapioca), potatoes, corn, millet, pulses, cut flowers; beef, goat meat, milk, poultry

Industries :
sugar, brewing, tobacco, cotton textiles; cement, steel production

Industrial production growth rate :
6% (2010 est.)

Electricity - production :
2.256 billion kWh (2007 est.)

Electricity - consumption :
2.068 billion kWh (2007 est.)

Electricity - exports :
30 million kWh (2007)

Electricity - imports :
0 kWh (2008 est.)

Oil - production :
NA bbl/day (2009 est.)

Oil - consumption :
13,000 bbl/day (2009 est.)

Oil - exports :
0 bbl/day (2007 est.)

Oil - imports :
13,090 bbl/day (2007 est.)

Oil - proved reserves :
0 bbl (1 January 2010 est.)

Natural gas - production :
0 cu m (2008 est.)

Natural gas - consumption :
0 cu m (2008 est.)

Natural gas - exports :
0 cu m (2008 est.)

Natural gas - imports :
0 cu m (2008 est.)

Natural gas - proved reserves :
0 cu m (1 January 2010 est.)

Current account balance :
-$784 million (2010 est.)

Exports :
$2.941 billion (2010 est.)

Exports - commodities :
coffee, fish and fish products, tea, cotton, flowers, horticultural products; gold

Exports - partners :
Sudan 13.47%, Kenya 8.98%, UAE 7.52%, Rwanda 7.5%, Switzerland 7.42%, Democratic Republic of the Congo 6.85%, Netherlands 5.67%, Belgium 5.66%, Germany 5.18%, Italy 4.33% (2009)

Imports :
$4.474 billion (2010 est.)

Imports - commodities :
capital equipment, vehicles, petroleum, medical supplies; cereals

Imports - partners :
Kenya 13.9%, India 12.79%, UAE 11.16%, China 8.91%, South Africa 5.08%, France 4.6%, Japan 4.37%, US 4.07% (2009)

Reserves of foreign exchange and gold :
$3.743 billion (31 December 2010 est.)

Debt - external :
$2.888 billion (31 December 2010 est.)

Stock of direct foreign investment - at home :
$NA

Stock of direct foreign investment - abroad :
$NA

Exchange rates :
Ugandan shillings (UGX) per US dollar - 2,166 (2010), 2,038.9 (2009), 1,658.1 (2008), 1,685.8 (2007), 1,834.9 (2006)

 

 
 

 



 


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