Uganda - Economy

Uganda's economy is agriculture based, with agriculture employing over 80% of the population and generating 90% of export earnings. Coffee is the main export crop, with tea and cotton other agricultural products. Uganda also has mineral deposits of copper and cobalt, which contributed 30% of export earnings during the 1960s, although the mining sector is now only a minor contributor to the economy.

The upheavals of the 1970s and the troubles of the 1980s left the economy in disarray. However, economic reforms begun in 1986 have resulted in important progress. The government made significant strides in liberalizing markets and releasing government influence during the 1990s, although some administrative controls remained in 2003. Monopolies were abolished in the coffee, cotton, power generation, and telecommunications sectors and restrictions on foreign exchange were removed. Reforms improved the economy and gained the confidence of international lending agencies.

The economy has posted growth rates in the GDP averaging6.9% from 1988–98, and 6% from 1998–2003. Consequently, the economy has almost doubled. Still, Uganda is one of the poorest countries in the world heavily dependent on foreign aid (approximately 55% of government spending in 1998). High growth rates are necessary to balance the population growth rate of over 3%. The government in 2003 was known for its sound fiscal management. World coffee prices recovered in 2003, which brought in revenue. New property developments have been fueled by an influx of foreign investment, which has provided testimony of confidence in Uganda's economy. Ugandan Asians, who had been expelled by Idi Amin in 1972, have had their property restored and have brought business back into the country. One of the first African nations hit by HIV/AIDS, Uganda had by 2003 witnessed a drop in infection rates over the previous decade. However, Uganda's continued involvement in the civil war in the Democratic Republic of the Congo compromised the progress Uganda has made on many other fronts.