The economy of Uganda: Potential, yet striving
Bestowed by abundant natural resources, the economy of Uganda has always had a potential, but living up to the potential has been an uphill task. Today, this agriculture-based economy is chiefly characterized by rising inflation and depreciating currency. The economy is severely affected by the prolonged drought in previous decade, energy crisis and high oil prices. The core of the problem is also traced to political stability. The overall downturn of the world economy has brought a faster demise for certain economics measures in Uganda.
A snapshot of Uganda’s economy
It has a GPD of 22.6 billion and is ranked 104th on the ranking scale. Agricultural products forms the backbone of the economy- with Uganda being the leading coffee producer of the Africa. Other exports comprises of vanilla, fruits, skins and apparels. Recently, a number of industries are emerging to make the economy a robust one. Cement, soap and utensils are some of the manufactured products. It has a great potential in terms of mining resources as well with reserves of Gold, Beryl and Limestone. The country tries to base its industries on these resources. However, continuous extraction of these materials is always a challenge for an emerging economy. Continuous efforts are made to improve it.
Shilling Vs Dollar: A one-sided downfall
As the currency depreciates at an extraordinary pace, surpassing anomalous limits- it invites a whole lot of its own troubles. The consistent deprecation of Shilling which now stands at 3003 Shillings for every dollar means increased trouble for importers in Uganda since foreign transactions are heavily impacted by the exchange rate. Of all the effects, the most crunching one falls on the producers in Uganda having to pay substantial amount for raw materials. Much of these imports come from European and Middle Eastern countries. This makes the prices of products unaffordable to a large fraction of the country.
A way forward
The emerging economies often face obstacles to grow due to the absence of strong system and corruption within it. The foreign aid, supposed to bring out a positive change, often interferes with the government policies. This results in the inconsistency of the polices. Ugandan economy would be on a better way ahead if consistent polices can be drafted. Corruption needs to be minimized and then ultimately scrapped off. Finally, the government should aim for self-reliance, however at the same time, continuing to benefit from exports.