Economic Development of Uganda

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Economic Development of Uganda
This report analyzes the development program over the last 60 years, the development gap between Uganda and OECD countries, and obstacles the country encounters towards ending the development gap. Uganda is a nation found in the eastern Africa area, and International Monetary Fund Classifies it as a middle-income country. Uganda's history, political organization, and demography isolate the country, which results in disruption of the economy and causes a high poverty rate.
Economic Development over the past 6o years
Agriculture has been the dominating economic activity since the pre-colonial period in Uganda and has supported the economy for a long time. Besides, an active trade in ivory, enslaved people, and animal hides connected the country with the rest of Africa's east coast before the arrival of white people, as many of the Ugandans depended primarily on subsistence farming. The invasion of European into Uganda led to a pursuit of economic policies that transformed Uganda into a world economy for their economic interest. The country started cotton plantation, which is now among the leading supporters of the economy and was the leading export in the country after colonization. However, for the last 60 years, the government has encouraged the production of sugar and tea plantations which are the main holders of the country's economy (Bandyopadhyay et al. 282). Therefore, sugar, tea, and cotton are the main cash crops farming in Uganda that have had a huge impact on the growth of this country's economy.
Uganda has benefited from a strong, stable economy after independence. Despite agriculture being the main contributor to the economy, a fast-growing manufacturing sector appeared capable of increasing its contribution to the nation's GDP via manufacturing foodstuffs and textiles. The country has valuable minerals, including copper and water power sources, which are also considerable in powering the economy. According to Byamugisha, Uganda joined other adjoining nations, including Kenya and Tanzania, in 1967 to create the East African Community organization to share a joint market and share the expense of transportation and banking amenities (6). The above reasons enabled Uganda to record an impressive growth rate in the early years after gaining independence.
However, its economy deteriorated under the governance of Idi Amin during his reign between 1971-1979. Amin prioritized superpatriot, troops policies, and ill-chosen monetary approaches to uproot foreign economic aspirations and develop the troops. In 1972, he detained 70 000 Asians of Indian and Pakistani heritage who held British visas. Many Asians were proactive in agriculture and commerce (Ojede et al. 437). Their absence from the country and Amin's efforts to oust foreign business lowered the investors' confidence in Uganda. His efforts to expand public spending on military products exacerbated the country's foreign and domestic debt, which deteriorated in the 1970s.
Uganda's relationship with its neighbors deteriorated, leading to EAC disbanding in 1977. However, in 1979, the Tanzanian forces had a joint measure to conquer the undesirable Amin reign. By 1980, the economy deteriorated, dragging the country behind. After the exit of Amin from the presidency, the government made successive attempts to restore the economic state of the country through different combinations of development strategies and strict government budgets. Since 1980, the second government sought foreign support from international donor organizations, such as International Monetary Fund, exchanging the foreign floating Ugandan shilling. Milton Obote removed price management, heightened agricultural farming prices, and set rigid, stringent boundaries on government expenses.
Furthermore, Obote persuaded foreign companies to return to their overseas premises, expropriated when Amin nationalized several industries. Obote has good intentions in recovering real growth in agriculture in the years between 1980- 1983. However, the lack of foreign exchange is a primary challenge to the government's effort. The situation worsened in 1984 after the IMF stopped its support for restructuring following the dispute over the budget policy. In the short reign of Tito Lutwa Okello in 1985, the economy nearly went astray due to the extension of civil war across the country (Greenwood 199).
After the size of power in January 1986, the new National Resistant Movement government enacted its political manifesto nourished for a few moments when NRM was an anti-government rebel. The movement had a Ten-Point Agenda that coerced the economic blossoming needs, proclaiming that an autonomous, self-sufficient nationwide economy was critical to Uganda's welfare. The manifesto enacted distinct termini for attaining autonomy by expanding agricultural exports and expanding enterprises that utilize regional resources to produce commodities that would enhance integral economic expansion. The Ten-Point agenda improved basic social services, including water, healthcare, and shelter (Danja 12). Besides, the program also focused on improving education and eliminating corruption, especially in government (Duflo 100). The government aimed to welcome confiscated land to its rightful Ugandan owners, which would improve salaries in the employment sector. The NRM started this program to enhance international ties in the African region, improve markets in the East African regions, and enhance mixed for personal ownership and an active government sector. The government facilitated a major restoration and growth strategy for fiscal years 1987-1988 and 1990-1991with a support from the IMF, which depreciated the shilling and committed itself to budgetary restraint. The plan stabilized the economy, enhanced economic growth, and faster expansion (Waaswa & Satognon 1). The government also aimed to minimize the country's dependence on external financial aid, increase agricultural produce export and foster the growth in private institutions by using new credit policies.
In 1987, the new shilling entered into circulation in May. The government aimed to have an exchange rate consistent according to the national goals of rehabilitating and stimulating the entire nation's economy. The government embraced the new restructuring of the IMF of offering loans without stand-by credit. The application of the new loan program left the country heavily dependent on foreign assistance (Hickey 202). The new system allowed the country to move closer to the structural terms of realizing the long-term goals. After 1989, the inflation rate reduced to almost 33% by May 1990. However, serious economic difficulties continued to impede an economic upturn; for instance, the country's disproportionate dependence on revenue from coffee has huge trade problems (De Luca & Verpoorten 121)). Prolonged drought conditions in 1990 worsened and slowed the GDP growth, which had attained approximately 6.6% annually from 1987-to 1990. In 1991, the inflation rate increased to approximately 60 percent, and the budget had a deficit in which revenue only accounted for 65% of expenditure. In the following year, the count...