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Economics and Business in Uganda

According to COUNTRYAAH, Uganda has good natural conditions for agriculture and food production, which has helped the country's population through long periods of economic decline and war, in the 1970s and 1980s. Besides good conditions for farming in the southern part of the country and for cattle keeping in the north, Uganda also has some mineral deposits and rich fishing in Lake Victoria.

Business of Uganda

From having a relatively good economic foundation of independence, the economy was severely hit by Idi Amin's mismanagement (1971–79), not least after the expulsion of most of the country's Asian population, which was central to business, in 1972; so did many foreign experts, which tapped the country for expertise. All foreign property was nationalized without compensation, and the industry almost stopped; so did foreign aid. The subsequent period of civil war until 1986 prevented reconstruction, and in itself caused new economic devastation. Political stability and economic reform after 1986, supported by both multinational institutions and bilateral donors, including Norway, gave Uganda faster economic growth than most countries in Africa. A contribution to the progress has also been the resumption of economic cooperation with neighboring Kenya and Tanzania, which until 1967 were linked through the East African Community (EAC) organization, including several common services such as aircraft, rail and telecommunications. In 2000, a new EAC became operational, and a Customs Union came into effect from 2005, with plans including about a common currency.

Uganda's economy is dominated by agriculture, which employs just over 80% of the working population, and is responsible for both food production for domestic consumption and production for export. Especially important is coffee. The country exports cotton and tea, formerly also tobacco. The industry is underdeveloped, but has been growing since the 1990s. Uganda has valuable instances of, among other things, cobalt and copper. Following the military participation in the war in the Congo in the late 1990s, Uganda was accused of being responsible for the illegal export of minerals from this country.

Since the early 1980s, economic development has been threatened by a severe AIDS epidemic that has caused major social and economic damage to the country. in the form of lost manpower and skills. The protracted war in Northern Uganda has been an obstacle to economic and social development in that part of the country, and at the same time has resulted in significant costs to the country's defense. Uganda has great potential for tourism, which has been a growth sector from the 1990s, after many years of war and decay. In the 1960s, tourism was the third most important foreign currency earner. Uganda was granted the status of main partner country for Norwegian development aid in 1996, a position it also held from the 1960s until state cooperation was terminated in 1973, following Amin's takeover of power. Norway's support is channeled into several sectors, per 2005 above all governance, democracy and human rights (especially the conflict in Northern Uganda); framework conditions for economic growth and development of the private sector (especially the energy sector); budget support earmarked poverty reduction (through the Poverty Action Fund). In addition to financial support from the Norwegian to the Ugandan state, several Norwegian NGOs have been involved in Uganda.

Agriculture and fishing

Uganda has good natural conditions for agriculture, with climate and soil well suited for the production of a variety of goods, and is self-sufficient with food. The country's economy is dominated by agriculture, which employs over 80% of the working population, and in the early 2000s contributed more than 40% of the country's gross domestic product (GDP). Unlike in the settler colony of Kenya, the British colonial government in Uganda promoted local agriculture, driven essentially by African small farmers. Production of cotton, tea and coffee for export was encouraged, and even after independence Uganda was a significant producer of these goods. However, the nationalization of the tea and cotton plantations resulted in almost complete stoppage in their production. The same was true of the less volatile sugar production. It was not until the late 1980s that production of these goods resumed. From the 1990s, much has been invested in the production and export of vegetables and flowers.

The most important sales product from agriculture is coffee, which has accounted for more than 90% of the country's export revenue for periods. 1994/95 was Uganda Africa's largest exporter of coffee. Coffee is grown by small farmers and is subject to significant price fluctuations in the export markets. Like coffee, cotton and tea production picked up in the 1990s. Before the decline in the 1970s, Uganda was among Africa's three largest producers of both cotton and tea. At the small farms maize, bananas, millet, cassava, legumes, rice and sweet potatoes etc. are grown for their own use. The most important food is cooking bananas (matoke).

Animal husbandry is of particular importance in the northern areas, but large parts of Uganda are suitable for animal husbandry, and cattle are kept all over the country - both by small farmers and large farms.

Forests cover about 7.5 million hectares, and almost all productive forest consists of densely wooded species. The development of forestry has been a main focus area for Norwegian assistance to Uganda.

Fishing in lakes and rivers is considerable; Particularly extensive is fishing in Lake Victoria, from which fish are also exported. The most important fish species are nilåbor and tilapia. Overfishing has led to reduced catches and poorer quality, while large parts of the sea sprouted again in the 1990s by water hyacinths.

Mining, energy

Uganda has significant mineral deposits, but only a few are exploited commercially, after the mining operation went a long way under Idi Amin's regime in the 1970s. Before it became copper, phosphate, apatite, tungsten, beryll, tantalite, gold, tin, tungsten and limestone extracted. The recovery of tungsten, tin and gold was resumed in the 1990s, when gold became the country's second most important export product; Export of copper resumed in 1994. Substantial deposits of iron ore have been detected, but not put into production. Oil exploration was started in 1987, with no evidence of any viable deposits.

The electricity supply comes essentially from the Nalubaale hydroelectric power station (formerly Owen Falls), at Jinja, where the Nile leaves Lake Victoria, with a capacity of 177 MW, some of which is exported. At the same time, Uganda imports well over half of its energy needs in the form of petroleum products. The Kiyara station at Jinja, at 240MW, was put into operation in 2000, and the development of the Kiira plant in the early 2000s provided an installed capacity of 120 MW. In the early 2000s, oil deposits were detected at Lake Albert, west of the country.

Industry

Uganda's industry essentially ceased in the early 1970s, after foreign enterprises were nationalized and most foreigners expelled. The industry is relatively undeveloped, and is mainly located in the metropolitan area, where there is a versatile consumer industry, the iron and metal industry, the chemical industry, the textile industry and the food industry. The latter is based on the processing of agricultural products, especially coffee, cotton, tea, sugar, tobacco, cooking oil and dairy products. The industry was modernized in the 1990s, with significant growth. and several new plants have been opened, including for mounting cars.

Foreign Trade

Uganda's foreign accounts are traditionally heavily dependent on the production and export of coffee, and coffee prices in the export market, but since the 1990s, exports are more complex and the dependence on coffee is reduced. Uganda also exports tea and cotton, vegetables and flowers, as well as some minerals; copper was previously one of the most important export products. The United Kingdom was for a long time the most important trading partner, but from the turn of the century followed by Kenya and Switzerland.

Transport and Communications

Uganda has a relatively well-developed transport sector, with a road network of approx. 26 800 km. The 1241 km railway network crosses the country in an east-west direction and continues to Mombasa, Kenya, which is an important export port for Uganda. Railway connections to the north have been suspended for economic and security reasons. Lake traffic on Lake Victoria is significant. A rail ferry connects Jinja to the Tanzanian ports of Mwanza and Tanga. International airport is Entebbe outside Kampala. Many smaller aircraft strips.

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