Economy of Uganda

Economy of Uganda

Downtown Kampala
Currency Ugandan shilling (UGX)
1 July – 30 June
Trade organisations
 EAC, COMESA, AU, WTO
Statistics
GDP $22.6 billion (2013 est.)
GDP rank 104th (nominal, 2013)
GDP growth
 5.6% (46th, 2013 est.)
GDP by sector
 Agriculture: 23.1%
Industry: 26.9%
Services: 50% (2013 est.)
6.2% (2013 est.)
14% (31 December 2010 est.)
Population below poverty line
 24.5% (2009)[1]
44.6 (2012)[2]
Labour force
 17.4 million (2013 est.)
Labour force by occupation
 agriculture: 82% (1999 est.)
Main industries
 sugar, brewing, tobacco, cotton textiles; cement, steel production
Increase 150 (2015)[3]
External
Exports $3.156 billion (2013 est.) (123rd)
Export goods
Main export partners
  Kenya 12.3%
 Rwanda 10.3%
 UAE 10.2%
 DR Congo 9.4%
 Netherlands 6.1%
 Germany 5.6%
 Italy 4.4% (2012)
Imports $4.858 billion (2013 est.)
Import goods
Main import partners
  Kenya 15.6%
 UAE 15.4%
 China 12.8%
 India 11.7%
 South Africa 4.1%
 Japan 4% (2012)
FDI stock
 $8.821 billion (2013)[4]
–$1.908 billion (2013 est.)
$5.223 billion (31 December 2013 est.)
Public finances
$10 billion[5]
–2.7% of GDP (2013 est.)
Revenues $3.2 billion
Expenses $3.803 billion (2013 est.)
Standard & Poor's: Decrease B[6]
Foreign reserves
 $3.579 billion (31 December 2013 est.)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.
A family in a market in Kampala.

Endowed with significant natural resources, including ample fertile land, regular rainfall, and mineral deposits, it is thought that Uganda could feed all of Africa if it were commercially farmed.[7] The economy of Uganda has great potential, and it appeared poised for rapid economic growth and development.

Chronic political instability and erratic economic management since self-rule has produced a record of persistent economic decline that has left Uganda among the world's poorest and least-developed countries. The national energy needs have historically been more than domestic energy generation, though large petroleum reserves have been found in the west.

After the turmoil of the Amin period, the country began a program of economic recovery in 1981 that received considerable foreign assistance. From mid-1984 onward, overly expansionist fiscal and monetary policies and the renewed outbreak of civil strife led to a setback in economic performance.

International trade and finance

Ugandan export destinations in 2006.

Since assuming power in early 1986, Museveni's government has taken important steps toward economic rehabilitation. The country's infrastructure—notably its transport and communications systems which were destroyed by war and neglect—is being rebuilt. Recognizing the need for increased external support, Uganda negotiated a policy framework paper with the IMF and the World Bank in 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 policies produced positive results. Inflation, which ran at 240% in 1987 and 42% in June 1992, was 5.4% for fiscal year 1995-96 and 7.3% in 2003.

Investment as a percentage of GDP was estimated at 20.9% in 2002 compared to 13.7% in 1999. Private sector investment, largely financed by private transfers from abroad, was 14.9% of GDP in 2002. Gross national savings as a percentage of GDP was estimated at 5.5% in 2002. The Ugandan Government has also worked with donor countries to reschedule or cancel substantial portions of the country's external debts.

Uganda is a member of the World Trade Organization.

Currency

Main article: Ugandan shilling

Uganda began issuing its own currency in 1966 through the Bank of Uganda.[8] Prior to the failure of the East African Currency Board, Uganda used other countries' currency.

There have been six changes of currency since 1966, but the 1987 version has been stable. Upgrades to it have been intended to decrease counterfeiting and make the currency more useful.

Agriculture

Main article: Agriculture in Uganda

Agricultural products supply nearly all of Uganda's foreign exchange earnings, with coffee alone (of which Uganda is Africa's second largest producer - after Ethiopia[9]) accounting for about 27% of the country's exports in 2002. Exports of apparel, hides, skins, vanilla, vegetables, fruits, cut flowers, and fish are growing, and cotton, tea, and tobacco continue to be mainstays.

Most industry is related to agriculture.

Industry

A street market in the capital, Kampala.

The industrial sector is being rehabilitated to resume production of building and construction materials, such as cement, reinforcing rods, corrugated roofing sheets, and paint. Domestically produced consumer goods include plastics, soap, cork, beer, and soft drinks. Major Cement manufacturers like 'Tororo Cement Ltd' caters to the need of building and construction material consumers across East Africa.

Transportation

Main article: Transport in Uganda

Uganda has about 30,000 kilometres (19,000 mi) of roads, with approximately 2,800 kilometres (1,700 mi) paved. Most radiate from Kampala.

The country has about 1,350 kilometres (840 mi) of rail lines. A railroad originating at Mombasa on the Indian Ocean connects with Tororo, where it branches westward to Jinja, Kampala, and Kasese and northward to Mbale, Soroti, Lira, Gulu, and Pakwach. The only railway line still operating, however, is the one to Kampala.

Uganda's important link to the port of Mombasa is now mainly by road, which serves its transport needs and also those of neighboring Rwanda, Burundi, parts of the Democratic Republic of the Congo, and South Sudan. An international airport is at Entebbe on the shore of Lake Victoria, about 32 kilometres (20 mi) south of Kampala.

Communications

The Uganda Communications Commission regulates communications, primarily "delivered through an enabled private sector."[10]

Mining and petroleum

Uganda's predominant mineral occurrences are gold, tungsten, tin, beryl, and tantalite in the south; tungsten, clay, and granite between latitude zero and two degrees north; and gold, mica, copper, limestone, and iron in the north.[11]

In late 2012, the government of Uganda was taken to court over value added tax that it placed on goods and services purchased by Tullow Oil, a foreign oil company operating in the country.[12] The court case will be heard at an international court based in the United States and could have serious ramifications for Uganda if lost; Uganda’s membership at the World Bank depends on its maintenance of “multi-lateral investments treaties and associated guarantees”. There is also a possibility that the country could be sanctioned by the World Bank if found in breach of trade and investment agreements signed bilaterally with the United Kingdom.[12] The Ugandan government insists that Tullow cannot claim taxes on supplies as recoverable costs before oil production starts.[13] Sources from within the government reveal that the main concern at present is the manner in which millions of dollars have been lost in the past decade, money that could allegedly have stayed in Uganda for investment in the public sector; a Global Financial Integrity report recently revealed that illicit money flows from Uganda between 2001 and 2012 totalled $680 million.[13] Tullow Oil is being represented in the court case by Kampala Associated Advocates, whose founder is Elly Kurahanga, the President of Tullow Uganda.[12] A partner at Kampala Associated Advocates, Peter Kabatsi, was also Uganda’s solicitor general between 1990 and 2002, and he has denied claims that he negotiated contracts with foreign oil firms during his time in this role.[12]

In June 2015, the Ugandan government and Tullow Oil settled a longstanding dispute regarding the amount of certain capital gains taxes that the company owed to the government.[14] The government claimed that the company owed US$435 million.[15] The claim, however, was settled for US $250 million.[14]

The Tullow Oil refinery that cost $1.5 billion has been put on hold due to governmental complications.[16][17]

See also

General:

References

  1. ↑ "Data: Uganda". World Bank. Retrieved 9 December 2014.
  2. ↑ "GINI index". World Bank. Retrieved 9 December 2014.
  3. ↑ "Ease of Doing Business in Uganda". World Bank. Retrieved 9 December 2014.
  4. ↑ "World Investment Report 2014: Investing in the SDGs: An Action Plan" (PDF). UNCTAD. 2014. p. 210. Retrieved 9 December 2014.
  5. ↑ "I can only approve $1.8bn loan for railway, says Muhakanizi". The Observer. 5 December 2014. Retrieved 9 December 2014.
  6. ↑ "S&P lowers Uganda sovereign credit rating to B from B+". Reuters. 17 January 2014. Retrieved 9 December 2014.
  7. ↑ Aid and other dirty business by Giles Bolton. Page 24. ISBN 978-0-09-191435-6
  8. ↑ History of the Currency Bank of Uganda,2007
  9. ↑ http://www.worldatlas.com/articles/top-coffee-producing-countries.html
  10. ↑ "UCC: Uganda Communications Commission - Communication for All". Retrieved 11 June 2015.
  11. ↑ Mineral Occurrences, Department of Geological Survey and Mines of Uganda
  12. 1 2 3 4 Tullow sues government in new tax dispute, Uganda: Daily Monitor, 2012, retrieved 17 December 2012
  13. 1 2 Company Profile, International: North South News, 2013
  14. 1 2 "Tullow settles Capital Gains Tax dispute in Uganda", Press Release, Tullow Oil, 22 June 2015, accessed 28 June 2015
  15. ↑ Tullow Oil sues Heritage over unpaid Ugandan tax bill, United Kingdom: Daily Telegraph, 2011, retrieved 17 December 2012
  16. ↑ "Sunday newspaper share tips: Dogs of the Footsie, AstraZeneca,Tullow Oil - This is Money". This is Money. Retrieved 11 June 2015.
  17. ↑ "Inside the City: Tullow’s Heavey burden - The Sunday Times". Retrieved 11 June 2015.

External links

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