M.Comm. / For twenty years Uganda suffered the disastrous consequences of a system of rule in which there were no limits to the exercise of power. During this period the country went through no less than seven different regimes, all of which ignored the rule of law and left people without a sense of personal security or power. Many Ugandans were forced into exile and those staying on withdrew from politics, leaving politicians to conduct their business without any accountability. The National Resistance Movement (NRM) Government, led by President Y oweri Museveni, came to power in early 1986. This brought an end to the political instability and economic decline, which had plagued the country hitherto. Under his leadership, the nation embarked on an ambitious economic recovery program, supported by the IMF, the World Bank, and other donors. The key elements of this successful program have been the restoration of fiscal and monetary discipline; the improvement of the incentive structure and investment climate for exports and other production activities; the rehabilitation of the country's social, economic and institutional infrastructure; and the promotion of increased savings and investment. The economic reforms implemented by the present government in Uganda since 1986, coupled with political stability, have contributed to economic growth rates averaging 6% per annum in the last decade. This has made Uganda one of the fastest growing countries in Africa. Inflation is under control and has been maintained below 10% per annum for the last four years. Most economic activities are fully liberalized and open to foreign investment. There are no restrictions to 100% foreign ownership of investments and no barriers to remittance of dividends. Uganda's shilling is fully convertible and has remained stable over the last years. The foreign exchange market is now wholly liberalized following a move by government, effective July 1997 to liberalize capital account transactions. Uganda is now one of about only five countries in the whole of Africa that have no restrictions on capital amount transfers. Within Africa and the emerging markets, Uganda enjoys a high status with donors and lenders. For the future, it is important to ensure that economic policy does not ignore social expenditure or the poverty dimension. In addition, President Museveni himself has repeatedly stressed the importance of attracting more private investment to Uganda in order to replace the foreign aid which can only be regarded as temporary. Other sectors needing attention are industrialization and privatization. As a landlocked country, Uganda needs to look to markets among its immediate neighbours. The new strategy should further include development of more linkages between agriculture and industry. It also needs to respond to people's basic needs and small-scale industries must be developed further. Only thus can industrialization contribute to economic welfare and sustainable development in Uganda. Privatization also needs to be reconsidered. It has contributed to the country's record rate of economic growth of 7-8 per cent, but so far it has not increased employment opportunities at all significantly. Nor has it enlarged the number of Ugandan entrepreneurs. Poverty, too, has not been reduced so far by privatization. There remams substantial room for development in most sectors of the Ugandan economy, creating opportunities for further and increased foreign investment. These sectors include food processmg and packing, construction equipment and electrical power systems, telecommunications equipment and services, travel and tourism services, light manufacturing, household consumer goods, footwear, furniture and textile fabrics, mining, mining industry equipment, non-ferrous metals, marine fisheries products and agriculture, including traditional crops such as coffee, cotton, tea and tobacco, fruit and vegetable processing, edible oil production, staple food crops processing, flowers and livestock. The vehicles for the facilitation of foreign investment are in place, the investment climate is open and friendly towards foreign investors, with an established investment code and incentive regime, offering generous capital recovery terms, particularly for investors whose projects entail significant investment in plant and machinery and whose investments are medium to long term. Uganda offers a predictable environment having achieved macro-economic stability at a time when clouds of uncertainty rock many regions in the world.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uj/uj:1961 |
| Date | 25 January 2012 |
| Creators | Griessel, Werner |
| Source Sets | South African National ETD Portal |
| Detected Language | English |
| Type | Thesis |
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