Why is Uganda So Rich? Uganda is a landlocked East
African country with a varied terrain that includes the snow-capped Rwenzori Mountains
and the massive Lake Victoria. Chimpanzees and unusual birds are among the rich biodiversity.
Mountain gorillas are protected in the remote Bwindi Impenetrable National Park.
Murchison Falls National Park, located in the northwest, is famed for its 43-meter-high
waterfall and fauna, including hippos. Uganda’s economy has a lot of potential and appears to
be on track for fast growth and development. The country has abundant natural resources, including
fertile terrain, consistent rainfall, and mineral deposits. Since gaining independence, Uganda has
experienced chronic political instability and unpredictable economic management,
resulting in a record of prolonged economic decline, placing it among the world’s poorest
and least-developed countries. The informal economy, which is dominated by women,
is roughly defined as a group of vulnerable people who work without protections. When it comes
to accessing Uganda’s formal economy, women face numerous gender-specific barriers, and research
has indicated prejudice against lending to women in the informal sector. Though
vast petroleum reserves have been discovered in the country’s west, national energy needs have
typically outpaced domestic energy generation. Hello there and welcome to another day of
discovery on Africa Reloaded. Today, we take a tour throughout Uganda, to dig dip into its riches
and see how it is beneficial to the country and other countries in Africa and the world at large.
Economy of Uganda. Following the upheaval of the Amin era,
the country began its economic rebuilding program in 1981, with significant foreign aid. Overly
expansionary fiscal and monetary policies, as well as a resurgence of civil strife, resulted
in a drop in economic performance from mid-1984 onward. Since the 1990s, the economy has expanded;
real gross domestic product (GDP) increased by an average of 6.7 percent per year from 1990 to 2015,
while real GDP per capita increased by 3.3 percent per year. During this time, the Ugandan economy
underwent significant changes: agriculture’s share of GDP value added fell from 56 percent in 1990
to 24 percent in 2015; industry's share increased from 11 percent to 20 percent
(with manufacturing increasing at a slower rate, from 6 percent to 9 percent of GDP);
and services’ share increased from 32 percent to 55 percent. The present economy is facing
a rapid growth rate with the increase discovery in the petroleum reserves.
Factors That Contribute to The Growth of The Country.
International Trade And Finance. Museveni’s government has taken significant
moves toward economic recovery since seizing power in early 1986. The country’s infrastructure,
particularly its transportation and communications systems, is being rebuilt after being
damaged by conflict and neglect. Uganda signed a policy framework paper with the IMF and the World
Bank in 1987, recognizing the need for further foreign assistance. Uganda began implementing
economic policies to restore price stability and a sustainable balance of payments, as well
as to boost capacity utilization, infrastructure rehabilitation, producer incentives through
correct price policies, and public sector resource mobilization and allocation. These so-called
structural adjustment programs considerably improved the shape of Uganda’s economy,
but they did not result in economic growth in the first decade after they were implemented. Uganda
has seen fast economic growth since 1995, however it is unclear how much of this progress can be
attributable to structural adjustment. Uganda has been a member of the World Trade Organization
(WTO) since January 1, 1995, and of the General Agreement on Tariffs and Trade
(GATT) since October 25, 1962. Agriculture.
Agricultural products account for a significant portion of Uganda’s foreign exchange earnings,
with coffee alone accounting for about 17 percent of the country’s exports in 2017
and earning the country US$545 million. Apparel, hides, skins, vanilla, vegetables, fruits, cut
flowers, and fish are all growing in popularity, while cotton, tea, and tobacco remain staples.
Uganda produced the following in 2018: Sugarcane 3.9 million tons; plantain 3.8
million tons (4th largest producer in the world, trailing only Congo, Ghana, and Cameroon);
532 thousand tons of banana; 360 thousand tons of onion; 298 thousand tons of sorghum;
260 thousand tons of rice; 245 thousand tons of sunflower seed; 242 thousand tons of peanut;
211 thousand tons of coffee (10th largest producer in the world); 209 thousand
tons of millet. Other agricultural goods such as cotton (87 thousand tons), tea (62 thousand tons),
tobacco (35 thousand tons), and chocolate (27 thousand tons) are produced in smaller quantities.
Mining and Petroleum. Gold, tungsten, tin,
beryl, and tantalite are found in the south; tungsten, clay, and granite are found between
latitude zero and two degrees north; and gold, mica, copper, limestone, and iron are found in
the north. Uganda’s government was sued in late 2012 over a value-added tax imposed on goods and
services acquired by Tullow Oil, a foreign oil company operating in the nation at the time.
The legal case was heard in a United States-based international court.
Tullow could not claim taxes on supplies as recoverable costs until oil production began
in Uganda, according to the Ugandan government. According to government sources, the main concern
right now is how millions of dollars have been lost over the last decade,
money that could have allegedly stayed in Uganda for public sector investment;
a recent Global Financial Integrity report revealed that illicit money flows from Uganda
totaled $680 million between 2001 and 2012. Kampala Associated Advocates, whose founder is
Elly Kurahanga, the President of Tullow Uganda, represented Tullow Oil in court. Peter Kabatsi,
a partner at Kampala Associated Advocates, served as Uganda’s solicitor general from 1990
to 2002, and he has refuted charges that he negotiated contracts with international
oil companies during that time. Tullow Oil and the Ugandan government settled a long-running
dispute in June 2015 over the amount of capital gains taxes the business owed to the government.
According to the authorities, the corporation owes $435 million.
However, the claim was resolved for $250 million. The government inked agreements
in April 2018 with the Albertine Graben Refinery Partnership, an international consortium led
by General Electric of the United States, to construct a 60,000 barrels-per-day Uganda Oil
Refinery in Western Uganda. The development is expected to cost around $4 billion.
Women In The Economy. Women laborers are heavily involved in Uganda’s
agriculture sector, which accounts for nearly 40% of the country’s GDP, particularly in product
management, marketing, and the crop sub-sector. Women produce 76 percent of food crops and around
66 percent of traditional exports like coffee and tea, and women provide 80 percent of food crops
and 60 percent of traditional exports like coffee and tea. Men make up 61 percent of the labor
in the official, non-agricultural economy, while women dominate the informal economy,
which can be linked to a lack of gender equality in the country. According to the Uganda Bureau of
Statistics, 88.6 percent of women and 84.2 percent of males were engaged informally in the urban
employment in 2015. Due to their inability to offer large initial finance, women are unable to
enter certain sectors, particularly in the formal economy, and are forced to remain in the commerce
and service sectors. Men, on the other hand, dominate the more profitable industries,
such as manufacturing. In addition to dominating other areas such as the service industry, crafts,
and tailoring, women merchants account for 70% of those in marketplaces and 40% of those in shops.
Women are frequently devalued in data collection, especially when it comes to their household roles.
When considering the worth of their labor and the profits generated from selling excess food,
for example, women frequently match, if not exceed, their husbands’ contribution to their
family’s income. When considering the worth of their labor and the profits generated from selling
excess food, for example, women frequently match, if not exceed, their husbands’ contribution to
their family’s income. Women in urban areas make between 50 and 70 percent of a household’s income.
Transportation. Uganda had around 130,000 kilometers (80,778
miles) of roads in 2017, with roughly 5,300 kilometers (3,293 miles) (4 percent) being paved.
The majority of paved roads originate in Kampala, Uganda’s capital and largest city. Uganda’s metre
gauge railway network is around 1,250 kilometers (777 miles) long as of 2017. About 56 percent
(700 kilometers (435 miles) of this is operating. A railroad runs from Mombasa, Kenya, to Tororo,
Uganda, where it branches west to Jinja, Kampala, and Kasese, and north to Mbale, Soroti,
Lira, Gulu, and Pakwach. However, the single railway line to Kampala is still operational.
Tourism. Uganda’s economy
is becoming increasingly reliant on tourism. In 2018, international arrivals accounted for
7.75 percent of GDP and 6.7 percent of total national employment, thanks
to a growing number of domestic tourists. Africa accounts for the large majority of international
immigrants (80). Outside of Africa, the regions with the greatest arrivals in 2018 were Europe
(8%, up for the first time in 5 years), Asia Pacific (6%, up dramatically from the previous
year), and the Americas (6%, up significantly from the previous year) (5 percent ). Following the
introduction of e-visas and modifications to data gathering systems, tourism data for 2018 and 2019
is based on modeling. As a result, the most recent data on individual source markets is from 2017,
when Rwanda (32 percent of arrivals), Kenya (24 percent), Tanzania (6 percent), the United States
(4 percent), and India (4 percent) were the top five source markets (3 percent ). The UK (2.4%)
was the largest source market in Europe, followed by the Netherlands (0.7%) and Germany (0.4%).
(0.6 percent ). The actual visitor counts for 2017 are listed in Annex A. Leisure visitors
are extremely valued, accounting for 89 percent of visitor spending although accounting for only 21%
of arrivals. More than 75% of visitors visiting Kenya and Tanzania, on the other hand, come for
pleasure. These countries also receive three to six times as many European visitors as Uganda. The
best potential for Uganda is to invest in recruiting adventure travelers. This market sector
is quite lucrative, and adventure travelers seek out Uganda’s unique experiences, such as safaris,
hiking, birdwatching, and community-based cultural tourism.
The factors mentioned here contribute
to the riches that Uganda possesses. Without all of these contributions from the various sectors,
Uganda would be a very poor country. In the nearest future, the growth of the nation will be
determined by the growth of the various sectors. Thanks for watching. Hope you enjoyed this
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