Uganda's economic development policy for the early 1990s was outlined in the Economic Recovery Program for 1988–92. State investment was lowered by 42% from the previous plan and the export sector was to be revived, particularly the nontraditional export sector. The investment budget was divided equally among the transport and communications sector, social infrastructure, agriculture, and the industry and tourism sector.
Inflation, which ran at 240% in 1987 and 42% in mid-1992, was under 5% for 1998. Nevertheless, a slowdown in privatization, low interest in foreign investment, and sustained but limited growth dimmed the prospects for economic development.
In 2000, Uganda became eligible for $1.3 billion in debt service relief under the International Monetary Fund (IMF)/World Bank Heavily Indebted Poor Countries (HIPC) initiative. In 2002, the IMF approved a three-year $17.8 million Poverty Reduction and Growth Facility (PRGF) Arrangement for Uganda, which was due to expire in September 2005. Political instability and poor economic management have stinted economic development, although gross domestic product (GDP) growth stood at 5.2% in 2002–03. The government was implementing a Poverty Eradication Action Plan (PEAP) in 2003, with the goal of reducing the incidence of poverty to less than 10% of the population by 2017.