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Economic history of Uganda
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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. 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.
After declaring Uganda a protectorate in 1893, Britain pursued economic policies that drew Uganda into the world economy primarily to serve Britain's late-19th-century textile industry. Cotton cultivation increased in importance after 1904, and once it became clear that cotton plantations would be too difficult and expensive to maintain, official policy encouraged smallholder farmers to produce and market their cotton through local cooperative associations.
By 1910 cotton had become Uganda's leading export. In the following decades, the government encouraged the growth of sugar and tea plantations. Following World War II, officials introduced coffee cultivation to bolster declining export revenues, and coffee soon earned more than half of Uganda's export earnings. 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.
The economy registered substantial growth, but almost all real growth was in agriculture, centered in the southern provinces. The fledgling industrial sector, which emphasized food processing for export, also increased its contribution as a result of the expansion of agriculture.
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. Uganda enjoyed a strong and stable economy in the years approaching independence. Agriculture was the dominant activity, but the expanding manufacturing sector appeared capable of increasing its contribution to gross domestic product (GDP), especially through the production of foodstuffs and textiles. Some valuable minerals, notably copper, had been discovered, and water power resources were substantial.
Since 1990 the Ugandan economy has shown more growth; real gross domestic product (GDP) grew at an average of 6.7% annually during the period 1990–2015, whereas real GDP per capita grew at 3.3% per annum during the same period. Over the same period the share of agriculture value added in GDP declined from 56% in 1990 to 24% in 2015; the share of industry grew from 11% to 20% (with manufacturing increasing at a slower pace, from 6% to 9% of GDP); and the share of services went from 32% to 55%.
For the first five years following independence in 1962, Uganda's economy resumed rapid growth, with GDP, including subsistence agriculture, expanding approximately 6.7 percent per year. Even with population growth estimated at 2.5 percent per year, net economic growth of more than 4 percent suggested that people's lives were improving. In 1967 Uganda and the neighboring countries of Kenya and Tanzania joined to form the East African Community (EAC), hoping to create a common market and share the cost of transport and banking facilities, and Uganda registered impressive growth rates for the first eight years after independence. By the end of the 1960s, commercial agriculture accounted for more than one-third of GDP. Industrial output had increased to nearly 9 percent of GDP, primarily the result of new food-processing industries. Tourism, transportation, telecommunications, and wholesale and retail trade still contributed nearly one-half of total output.
The economy deteriorated under the rule of President Idi Amin Dada from 1971 to 1979. Amin used nationalist, militarist rhetoric and ill-chosen economic policies to eliminate foreign economic interests and build up the military establishment. In 1972 he expelled holders of British passports, including approximately 70,000 Asians of Indian and Pakistani descent. Many Asians had been active in agribusiness, manufacturing, and commerce. Their mass expulsion and Amin's efforts to expropriate foreign businesses undermined investor confidence in Uganda. Amin also increased public expenditures on military goods, a practice that contributed to escalating foreign and domestic debt during the 1970s. 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. By 1980 the economy was nearly destroyed.
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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. 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.
After declaring Uganda a protectorate in 1893, Britain pursued economic policies that drew Uganda into the world economy primarily to serve Britain's late-19th-century textile industry. Cotton cultivation increased in importance after 1904, and once it became clear that cotton plantations would be too difficult and expensive to maintain, official policy encouraged smallholder farmers to produce and market their cotton through local cooperative associations.
By 1910 cotton had become Uganda's leading export. In the following decades, the government encouraged the growth of sugar and tea plantations. Following World War II, officials introduced coffee cultivation to bolster declining export revenues, and coffee soon earned more than half of Uganda's export earnings. 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.
The economy registered substantial growth, but almost all real growth was in agriculture, centered in the southern provinces. The fledgling industrial sector, which emphasized food processing for export, also increased its contribution as a result of the expansion of agriculture.
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. Uganda enjoyed a strong and stable economy in the years approaching independence. Agriculture was the dominant activity, but the expanding manufacturing sector appeared capable of increasing its contribution to gross domestic product (GDP), especially through the production of foodstuffs and textiles. Some valuable minerals, notably copper, had been discovered, and water power resources were substantial.
Since 1990 the Ugandan economy has shown more growth; real gross domestic product (GDP) grew at an average of 6.7% annually during the period 1990–2015, whereas real GDP per capita grew at 3.3% per annum during the same period. Over the same period the share of agriculture value added in GDP declined from 56% in 1990 to 24% in 2015; the share of industry grew from 11% to 20% (with manufacturing increasing at a slower pace, from 6% to 9% of GDP); and the share of services went from 32% to 55%.
For the first five years following independence in 1962, Uganda's economy resumed rapid growth, with GDP, including subsistence agriculture, expanding approximately 6.7 percent per year. Even with population growth estimated at 2.5 percent per year, net economic growth of more than 4 percent suggested that people's lives were improving. In 1967 Uganda and the neighboring countries of Kenya and Tanzania joined to form the East African Community (EAC), hoping to create a common market and share the cost of transport and banking facilities, and Uganda registered impressive growth rates for the first eight years after independence. By the end of the 1960s, commercial agriculture accounted for more than one-third of GDP. Industrial output had increased to nearly 9 percent of GDP, primarily the result of new food-processing industries. Tourism, transportation, telecommunications, and wholesale and retail trade still contributed nearly one-half of total output.
The economy deteriorated under the rule of President Idi Amin Dada from 1971 to 1979. Amin used nationalist, militarist rhetoric and ill-chosen economic policies to eliminate foreign economic interests and build up the military establishment. In 1972 he expelled holders of British passports, including approximately 70,000 Asians of Indian and Pakistani descent. Many Asians had been active in agribusiness, manufacturing, and commerce. Their mass expulsion and Amin's efforts to expropriate foreign businesses undermined investor confidence in Uganda. Amin also increased public expenditures on military goods, a practice that contributed to escalating foreign and domestic debt during the 1970s. 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. By 1980 the economy was nearly destroyed.
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