 Introduction |
When
President Yoweri Museveni took over Uganda 12 years ago, it was a country beset by
political instability and a shattered economy. Today, political stability, sound economic
management and a consistent annual growth rate in Gross Domestic Product (GDP) of 6.4%
over the last decade have endeared Uganda to the world.
So has the status of President Museveni, whose own success story has
gained international recognition. He is often invited to international conferences often
and as a sign of recognition, Uganda was chosen by the US as a venue to visit of President
Bill Clinton during his trip to Africa in March 98. This visit to Uganda has undoubtedly
set the country to benefit from the US's recent efforts attempt to open its market to
African exporters.
Through sound policies and gross aid flows, exceeding U.S. $500 million
a year, Uganda today is labelled by the World Bank as "the most consistent good
performer in Africa." Unsurprisingly, import liberalization has forced the
manufacturing sector to be more efficient, the lifting of foreign controls has encouraged
private investment, whilst privatization has reduced subsidies and increased tax revenues.
Uganda however is not yet through with its reform program because the
success story is faced with a daunting task of reducing poverty in the country. The
government is quoted as having launched a pragmatic program to alleviate poverty. In a
blue print set out in the Poverty Eradication Action Plan, the country expects to cut the
percentage of 19 million population living in absolute poverty from the present 66 % to
less than 10 % by the year 2017.
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Indeed there is plenty of upside gain for the country to solve what has
been described as a 'paradox' by the UNDP in its report.
Nevertheless the country has a rejuvenated economy which combines
imported and local expertise, foreign capital and external stakeholder. Participation in
its economy is set to reach impressive heights, not least because of the return of
Ugandan-Asians expelled during Idi Amin's regime. Their huge influence have helped
increase foreign direct capital - Foreign Direct
Investment (FDI)in 1995-6 increased from US$ 113 to US$160m in 1996-7 according to
government figures. FDI is estimated at 2.7 % of GDP in 1996-7 up from 2.1 % of GDP in
1995-6.
The rapid growth of the economy and the deliberate courting of overseas
investors can be attributed to Uganda's corporate tax rate of 30% which is one of the
lowest in Africa. The country also enjoy duty-free access to the European and preferential
access to much of the African market through membership of the regional trading block COMESA. (Common Market for East and
South Africa). |
