Uganda - Economic sectors

Uganda's economic sectors reflect the legacy of colonial structures, the country's position as a land-locked

territory, its politically tumultuous past, and the widespread lack of foreign investment in sub-Saharan Africa as a whole. Uganda is highly dependent on agricultural exports in order to provide much-needed foreign currency, and its underdeveloped industry and services necessitate an increasing level of imports. Consequently, in 1997 the government was in 5.7 percent deficit as a percentage of GDP (excluding external aid). In addition, Uganda lacks a significant internal market for domestically produced goods because of low household incomes. In light of these factors it is unlikely that the economy will reduce its primary dependence on the export-based growth strategy of producing goods such as coffee in the medium-term future; nonetheless, it does remain a leader in international coffee markets.

In order to address these geographical, historical, and material problems, the Ugandan government is attempting to diversify its economic sectors to produce more manufactured goods for domestic, regional, and international consumption to reduce the dependence of the economy on foreign aid and imports. With the continued financial support of the IMF, World Bank, EU, and United States for Uganda's free market reforms there is a genuine possibility that the economy's present diversification will contribute to its current growth rate—one of the fastest in the world. Uganda had an average GDP annual growth rate of 7.2 percent over 1990-99, which constitutes a growth rate of agriculture of 3.7 percent, of services at 8.1 percent and industry at 12.7 percent. This consistent growth of various sectors suggests a dynamic economy.

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