|
Uganda GROWTH AND STRUCTURE OF THE ECONOMY
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. 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. 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.
Although the government envisioned annual economic
growth
rates of about 5.6 percent in the early 1970s, civil war
and
political instability almost destroyed Uganda's once
promising
economy. GDP declined each year from 1972 to 1976 and
registered
only slight improvement in 1977 when world coffee prices
increased. Negative growth resumed, largely because the
government continued to expropriate business assets.
Foreign
investments, too, declined sharply, as President Idi
Amin's
erratic policies destroyed almost all but the subsistence
sector
of the economy.
The economic and political destruction of the Amin
years
contributed to a record decline in earnings by 14.8
percent
between 1978 and 1980. When Amin fled from Uganda in 1979,
the
nation's GDP measured only 80 percent of the 1970 level.
Industrial output declined sharply, as equipment, spare
parts,
and raw materials became scarce. From 1981 to 1983, the
country
experienced a welcome 17.3 percent growth rate, but most
of this
success occurred in the agricultural sector. Little
progress was
made in manufacturing and other productive sectors.
Renewed
political crisis led to negative growth rates of 4.2
percent in
1984, 1.5 percent in 1985, and 2.3 percent in 1986.
Throughout these years of political uncertainty, coffee
production by smallholders--the pattern developed under
British
rule--continued to dominate the economy, providing the
best hope
for national recovery and economic development. As
international
coffee prices fluctuated, however, Uganda's overall GDP
suffered
despite consistent production.
This economic decline again seemed to end, and in 1987
GDP
rose 4.5 percent above the 1986 level. This marked
Uganda's first
sign of economic growth in four years, as security
improved in
the south and west and factories increased production
after years
of stagnation. This modest rate of growth increased in
1988, when
GDP expansion measured 7.2 percent, with substantial
improvements
in the manufacturing sector. In 1989 falling world market
prices
for coffee reduced growth to 6.6 percent, and a further
decline
to 3.4 percent growth occurred in 1990, in part because of
drought, low coffee prices, and a decline in manufacturing
output.
Uganda had escaped widespread famine in the late 1970s
and
1980s only because many people, even urban residents,
reverted to
subsistence cultivation in order to survive. 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. By the
late
1980s, government reports estimated that approximately 44
percent
of GDP originated outside the monetary economy
(see
fig. 6;
table 4, Appendix). Most (over 90 percent) of nonmonetary
economic
activity was agricultural, and it was the resilience of
this
sector that ensured survival for most Ugandans.
Data as of December 1990
|
