Uganda’s traditional export crops — coffee, cotton, and tea — have not fared well in glutted world markets. However, non-traditional goods, such as fish, flowers, and vanilla, now form a large percentage of Ugandan exports. Good food harvests have kept inflation in check, with inflation remaining below ten percent since September 2003 (though recent dry weather may impact 2004 harvests).
While the market is small and average income is low, Uganda is considered a success story in Sub-Saharan Africa. Uganda continues to take substantial strides to liberalize the economy, contain inflation and allow the economy to grow. Uganda’s GDP grew by nearly six percent in 2003 and is expected to maintain this level of growth in 2004. The Government of Uganda (GOU) continues to privatize parastatals, implement programs to promote foreign investment, and largely follow IMF/World Bank guidelines to maintain macroeconomic stability and restructure the economy. The banking sector has fully recovered from the shocks when the GOU was forced to close four domestic commercial banks during 1998/99 for gross mismanagement. With assistance from the U.S. Department of Treasury, the GOU has upgraded bank supervision and increased capital requirements. Parliament recently passed a financial institutions bill that puts emphasis on good commercial bank management. Uganda has begun to actively promote the development of capital markets. The five listings on the Uganda Securities Exchange will increase to seven later this year, with several other potential public offerings in the near future. In 2004, the Bank of Uganda successfully launched 2, 3, 5 and 10-year government bonds.
Government revenue collection continues to lag behind that of most African nations, leading to large budget shortfalls. International donors provide crucial budgetary and project assistance amounting to around 46 percent of government expenditures in 2004/05. This budgetary support increases inflationary pressures and forces the government to frequently auction treasury bills to mop up excess liquidity. Treasury bill sales have pushed interest rates up, making it difficult for Ugandan businesses to access capital.
Ugandan attitudes toward the U.S. are favorable, as are business attitudes generally. However, Uganda has traditionally traded with nearby countries, South Africa, and Europe, especially the United Kingdom. In 2003-04, several South African firms made high-profile investments in the Ugandan retail sector. In March 2004, Uganda, Kenya, and Tanzania signed the East African Customs Union (EACU), which will remove internal tariffs and harmonize external duties. As part of the EACU, Uganda will have to increase its tariffs on some finished products imported from outside the EACU. American manufacturers wishing to export to Uganda must overcome buyers’ comfort with familiar trading partners and concern about the ability of American manufacturers to provide parts and service. Transportation costs from the United States tend to make some U.S. goods less competitive. Also, new products often compete with used goods, especially in automobiles and clothing, though U.S. exporters of used and refurbished products will find a ready market. Prospects for U.S. investment in Uganda are in the following sectors: agriculture, food processing, livestock, tourism, infrastructure, transportation, import substitution, light manufacturing, mining, and telecommunications.
The barriers to doing business in Uganda include difficulty accessing financing, continued high levels of corruption, high land, air and rail transportation costs, poor infrastructure (including transportation, power, and water), inefficient government services (especially in the immigration department, customs department, and Uganda Revenue Authority), and a lack of consistency between government policies and practices. Roadblocks particular to American companies are Uganda’s traditional links to East Africa and the United Kingdom, and that most development projects are funded by outside donors who often informally link their money to purchases from companies based in their own country, and bribery by some non-American businesses competitors to influence government action.
Facts & Figures
President: Yoweri Museveni (1986)
Prime Minister: Ruhakana Rugunda (2014)
Land area: 77,108 sq mi (199,710 sq km); total area: 91,135 sq mi (236,040 sq km)
Population (2009 est.): 32,369,558 (growth rate: 2.7%); birth rate: 47.8/1000; infant mortality rate: 64.8/1000; life expectancy: 52.7; density per sq mi: 392
Capital and largest city (2003 est.): Kampala, 1,461,600 (metro. area), 1,244,000 (city proper)
Monetary unit: Ugandan new shilling
Uganda, twice the size of Pennsylvania, is in East Africa. It is bordered on the west by Congo, on the north by the Sudan, on the east by Kenya, and on the south by Tanzania and Rwanda. The country, which lies across the equator, is divided into three main areas�swampy lowlands, a fertile plateau with wooded hills, and a desert region. Lake Victoria forms part of the southern border.
About 500 B.C. Bantu-speaking peoples migrated to the area now called Uganda. By the 14th century, three kingdoms dominated, Buganda (meaning ‘state of the Gandas’), Bunyoro, and Ankole. Uganda was first explored by Europeans as well as Arab traders in 1844. An Anglo-German agreement of 1890 declared it to be in the British sphere of influence in Africa, and the Imperial British East Africa Company was chartered to develop the area. The company did not prosper financially, and in 1894 a British protectorate was proclaimed. Few Europeans permanently settled in Uganda, but it attracted many Indians, who became important players in Ugandan commerce.
Uganda became independent on Oct. 9, 1962. Sir Edward Mutesa, the king of Buganda (Mutesa II), was elected the first president, and Milton Obote the first prime minister, of the newly independent country. With the help of a young army officer, Col. Idi Amin, Prime Minister Obote seized control of the government from President Mutesa four years later.
More Facts & Figures
Republic of Uganda
Current government officials
Languages: English (official), Ganda or Luganda, other Niger-Congo languages, Nilo-Saharan languages, Swahili, Arabic
Ethnicity/race: Baganda 17%, Ankole 8%, Basoga 8%, Iteso 8%, Bakiga 7%, Langi 6%, Rwanda 6%, Bagisu 5%, Acholi 4%, Lugbara 4%, Batoro 3%, Bunyoro 3%, Alur 2%, Bagwere 2%, Bakonjo 2%, Jopodhola 2%, Karamojong 2%, Rundi 2%, non-African (European, Asian, Arab) 1%, other 8%
Religions: Roman Catholic 33%, Protestant 33%, Islam 16%, indigenous beliefs 18%
Literacy rate: 70% (2003 est.)
Economic summary: GDP/PPP (2007 est.): $29.04 billion; per capita $900. Real growth rate: 6.5%. Inflation: 6.8%. Unemployment: n.a. Arable land: 22%. Agriculture: coffee, tea, cotton, tobacco, cassava (tapioca), potatoes, corn, millet, pulses, cut flowers; beef, goat meat, milk, poultry. Labor force: 14.02 (2007 est.) million; agriculture 82%, industry 5%, services 13% (1999 est.). Industries: sugar, brewing, tobacco, cotton textiles; cement, steel production. Natural resources: copper, cobalt, hydropower, limestone, salt, arable land. Exports: $768 million f.o.b. (2005 est.): coffee, fish and fish products, tea, cotton, flowers, horticultural products; gold. Imports: $1.608 billion f.o.b. (2005 est.): capital equipment, vehicles, petroleum, medical supplies; cereals. Major trading partners: Kenya, Netherlands, Belgium, France, Germany, Rwanda, U.S., UAE, South Africa, India, China, UK, Japan (2004).
Member of the Commonwealth of Nations
Communications: Telephones: main lines in use: 50,074; however, 80,868 main lines were installed (1998); mobile cellular: 9,000 (1998). Radio broadcast stations: AM 7, FM 33, shortwave 2 (2001). Radios: 5 million (2001). Television broadcast stations: 8 (plus one low-power repeater) (2001). Televisions: 500,000 (2001). Internet Service Providers (ISPs): 2 (2000). Internet users: 60,000 (2002).
Transportation: Railways: total: 1,241 km (2002). Highways: total: 27,000 km; paved: 1,809 km; unpaved: 25,191 km (1999 est.). Waterways: Lake Victoria, Lake Albert, Lake Kyoga, Lake George, Lake Edward, Victoria Nile, Albert Nile. Ports and harbors: Entebbe, Jinja, Port Bell. Airports: 27 (2002).
International disputes: Tutsi, Hutu, and other ethnic groups, associated political rebels, armed gangs, and various government forces continue fighting in the Great Lakes region, transcending the boundaries of Burundi, Democratic Republic of the Congo, Rwanda, and Uganda to gain control over populated areas and natural resources; government heads pledge to end conflict, but localized violence continues despite UN peacekeeping efforts; conflict in Sudan has extended rebel forces and refugees into Uganda.
New President Brings New Hope
The National Resistance Army (NRA), an anti-Obote group led by Yoweri Museveni, kept fighting after it had been excluded from the new regime. It seized Kampala on Jan. 29, 1986, and Museveni was declared president. Museveni has transformed the ruins of Idi Amin and Milton Obote’s Uganda into an economic miracle, preaching a philosophy of self-sufficiency and anti-corruption. Western countries have flocked to assist him in the country’s transformation. Nevertheless, it remains one of Africa’s poorest countries. A ban on political parties was lifted in 1996, and the incumbent Museveni won 72% of the vote, reflecting his popularity due to the country’s economic recovery.
Uganda has waged an enormously successful campaign against AIDS, dramatically reducing the rate of new infections through an intensive public health and education campaign. Museveni won reelection in March 2001 with 70% of the vote, following a nasty and spirited campaign.
Close ties with Rwanda (many Rwandan Tutsi exiles helped Museveni come to power) led to the cooperation of Uganda and Rwanda in the ousting of Zaire’s Mobutu Sese Seko in 1997, and a year later, in efforts to unseat his successor, Laurent Kabila, whom both countries originally supported but from whom they grew estranged. But in 1999, Uganda and Rwanda quarreled over strategy in the Democratic Republic of the Congo and began fighting each other. The two countries mended their differences in 2002. Uganda also signed a peace accord with the Congo in Sept. 2002 and finally withdrew its remaining troops from the country in May 2003.
In July 2005, parliament amended the constitution to eliminate term limits, thus allowing President Museveni another term in office. In August, a multi-party political system was reinstituted after a 19-year absence. In Feb. 2006, Museveni was reelected with 59% of the vote.
Winston Churchill called Uganda ‘the pearl of Africa’, presumably basing his opinion on the country’s great natural beauty. From the moment the visitor lands at Entebbe’s international airport, with its breathtaking equatorial location on the forested shore of island-strewn Lake Victoria, it is clear that Uganda is no ordinary safari destination.
Dominated by a century-old botanical garden alive with the chatter of acrobatic monkeys and colourful tropical birds, Entebbe itself is the least obviously urban of all comparably sized African towns. Just 40km (25 miles) distant, sprawled across seven hills, there is the capital Kampala. The bright modern feel of this bustling, cosmopolitan city reflects the ongoing economic growth and political stability that has characterised Uganda since 1986. Since the late 1980s, the nation has managed to move on from the abyss of civil war and the economic catastrophe of the Idi Amin days.
Uganda is where the East African savannah meets the West African jungle. In this lush country, one can observe lions prowling the open plains, track chimpanzees through the rainforest undergrowth, then navigate tropical channels teeming with hippos and crocs before setting off into the misty mountains to stare deep into the eyes of a mountain gorilla .