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Country Profile - Uganda

Political stability, sound economic management, substantial aid flows, fertile land and hard work have seen Uganda's GDP grow at an annual average of 6.4% over the past decade. Can Uganda better this already impressive performance and break out of the ranks of the world's poorest countries and will agriculture play a vital role? Or will the threat of war and unfavourable weather conditions hamper the country's development?

The impact of El Niño

Uganda's agricultural production has suffered at the hands of El Niño in recent months. Hardest hit has been the cotton sector. The dry spell in April, May and June prevented farmers from planting. As a result 1997/98 output is expected to drop by 45% to 60,000 bales from 110,000 bales the previous year - the highest level since the industry's collapse during the Amin era.

Coffee, the mainstay of Uganda's economy, has emerged slightly better off, but in a sector that still accounts for 65% of exports and employs 80% of the labour force, any decline has far reaching affects. At the Uganda Coffee Development Authority (UCDA), officials say the mainly robusta crop could fall as low as 3.5m bags compared to last year's record 4.23m. "The drought coincided with the flowering period, which meant instead of maturing the flowers aborted," says Tress Bucyanayandi, managing director of the UCDA. "Then soils were waterlogged and there was a problem drying the crop."

The tea sector has managed to escape El Niño's devastating effects and exports have risen from 2,000 tonnes in the late 1980's to 16,940 tonnes in 1996.

Livestock and Fisheries

During 1996/97, livestock production continued its recovery from the 1994/95 decline. In terms of numbers, available statistics for cattle show an increase of 3.8% from 5.2 million in 1995 to 5.4 million during 96/97. Sheep increased by 27% from 0.9 million to 1.2 million and goats increased by 13.6% from 5.5 million to 6.3 million in the same period. The increase in livestock production has mainly been in response to the increasing demand for milk. New milk plants opening up country-wide, has encouraged dairy farming especially in the western part of the country. The local market has also seen an increase in the demand for goats.

Poultry production has continued to increase especially in the urban areas. This has been as a result of increased tourist activity in the country and hotels and other entertainment places have shown high demand. A number of hatcheries producing day old chicks have sprung up in recent years and these are supplemented with imports of day old chicks both from within and outside Africa.

Due to the increasing private sector investment in fish processing the production of fish and fish products has continued its upward trend for the last 4 years, registering overall growth of 4.3% in 1996/97. However, the industry continues to be hampered by the presence of the water hyacinth. This weed still occupies a considerable proportion of the country's water bodies despite intensified Government efforts to control further spread, and the closing down of some processing plants that could not meet the quality standards required.

Looking ahead

Although agriculture is still dominant, the structural composition of economic activity in Uganda has been changing during the past ten years. During 1996/97, total agricultural output accounted for 44.1% of GDP as compared to 45.5 % last year, 51% in 1991/2 and 57% in 1987/88. This downward trend shows the reduction in the over-reliance of the economy on agriculture. In contrast, the manufacturing sector now accounts for about 8.4 % of total economic output as compared to 6.2% in 1991/92 and 5.8% in 1987/88. This is still very low compared to other developing countries. This ratio needs to be significantly increased especially through the processing of agricultural output into semi or finished products. President Yoweri Museveni has voiced hopes that Uganda will eventually export roasted and ground coffee rather than green beans, although insiders admit that local processing remains a distant dream despite discussions with a range of Spanish and British companies.

The government has embarked on a major programme to modernise the agricultural sector with the hope that this will boost economic activity. Policy makers are optimistic that the privatisation currently going on, and the attraction of direct foreign investment, will help to promote the manufacturing sector so that it can contribute to a significantly bigger proportion of the country's economic activity. However others fear that Uganda's manufacturing sector will never be big enough to be the engine for growth and that the country must focus once again on its traditional strengths - in this case, its status as Africa's leading coffee exporter.

At a glance
Area - 197,058 sq km
Population - 19 million (mid 1995 estimate)
Population growth - 2.8% pa (1996-7 estimate)
Currency - Uganda shilling (USh)
Foreign Trade - Total exports $590m (1996): of which coffee $404m, cotton $13m
Main Trading partners (share of total trade to world 1996)

Exports
Spain - 21.1%
France - 11.1%
Germany - 8.8%

Imports
Kenya - 29.4%
UK - 11.8%
India - 6.1%

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