Economic history of Uganda
Since precolonial times, Peasant agricultural production has been the predominant economic activity in the landlocked country of Uganda in East Africa.
[1] Despite an active trade in ivory and animal hides linking Uganda with the east coast of Africa long before the arrival of Europeans, most Ugandans were subsistence farmers.
[1] When coffee replaced cotton as Uganda's principal export in the 1950s, it was still produced in the pattern of small peasant holdings and local marketing associations that had arisen early in the century.
[2] Growth slowed in the late 1950s, as fluctuating world market conditions reduced export earnings and Uganda experienced the political pressures of growing nationalist movements that swept much of Africa.
[1] 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.
[5] Although the government envisioned annual economic growth rates of about 5.6 percent in the early 1970s, war and political instability almost destroyed Uganda's once promising economy.
[6] Uganda escaped widespread famine in the late 1970s and 1980s only because many people, even urban residents, reverted to subsistence cultivation in order to survive.
[6] Both commercial and subsistence farming operated in the monetary and nonmonetary (barter) sectors, and the latter presented the government with formidable problems of organization and taxation.
[5] 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.
[5] 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.
[5] 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.
[5] The NRM government proposed a major Rehabilitation and Development Plan (RDP) for fiscal years 1987-88 through 1990–91, with IMF support; it then devalued the shilling and committed itself to budgetary restraint.
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.
[8] In an effort to bring a measure of financial stability to the country and attract some much-needed foreign assistance in 1987, it also initiated an ambitious RDP aimed at rebuilding the economic and social infrastructure.
[9] Prices paid by marketing boards for commodities such as coffee, tea, and cotton were fairly stable but often artificially low, and payments were sometimes delayed until several weeks after purchases.
[9] In 1989 the government was attempting to reduce expensive and inefficient intermediary activity in crop marketing, and Museveni urged producers to report buyers who failed to pay for commodities when they were received.
[9] In July 1988, officials announced that they would sell 22 companies that were entirely or partially government-owned, in an effort to trim government costs and curb runaway inflation.
[9] Funds allocated through this Public Enterprise Project would be used to pay for consultancy services and supplies and to commission a study of ways to reform public-sector administration.
[8] In order to set a public example in 1989, Museveni dismissed several high-level officials, including cabinet ministers, who were accused of embezzling or misusing government funds.
