Industry is very limited in Uganda. The most important sectors are the processing of agricultural products (such as coffee curing), the manufacture of light consumer goods and textiles, and the production of beverages, electricity, and cement. The production of beer in Uganda has increased dramatically in recent years, rising from 215,000 hectoliters in 1988 to 896,000 in 1997. Similarly, cement production has expanded from a low of 15,000 metric tons in 1988 to 290,000 in 1997. Of lesser importance is the production of sawn wood, remaining stable at 83,000 cubic meters from 1994 onwards. However, there is little evidence of the sufficient replanting of trees, which may not only affect this level of production but could have adverse environmental effects such as soil erosion and increased landslides. A key block to the development of Uganda's industrial and commercial sector is corruption. Bribes are commonly demanded to acquire even the most basic services such as an electricity supply and telephones.
Due to increased domestic security, market reform, and tax breaks, Uganda's manufacturing sector is growing. Merchandise exports have expanded from US$147 million in 1990 to US$501 million in 1998. However, merchandise imports have also expanded but at an even greater rate, from US$213 million in 1990 to US$1,414 million in 1998. This imbalance indicates a serious problem with Uganda's economy because, in order to continue the present rate of import of manufactured goods, the government is obliged to borrow ever greater amounts of money from foreign donors which makes the country increasingly indebted.
The privatization of industry is a central dynamic in Uganda's contemporary national economy. This is of central importance considering that government subsidies to parastatals were equal to that spent on much needed education between 1994-1998. The Privatization Unit of the Ministry of Finance has plans to open a number of industries to the private sector. For example, the largest dairy processor in the country, the government-owned Dairy Corporation, which has an annual turnover of US$12 million, is undergoing full privatization. Copper mining used to be a mainstay of the economy in the 1960s to mid-1970s with an output of up to 18,000 metric tons per annum. Due to the country's civil unrest and the decline of copper prices on international markets, the 90 percent government-owned Kilembe Mines Ltd. mining activity has been inactive since 1982. The planned privatization of this enterprise should end government subsidies to this company and is hoped to lead to the rein-vigoration of Uganda's copper production.