By Dr. Alex Thomas Ijjo  Senior Fellow, EPRC; Rob Marty Research Associate with AidData at the College of William and Mary and Isaac Shinyekwa Research Fellow at the EPRC. Trade liberalization  is widely regarded to be a key factor in economic development.  Its proponents argue that openness to market forces will increase the efficiency of resource allocation and lead to sustained economic development. On the basis of this belief, the World Bank and IMF have recommended market-oriented policy reforms, which developing countries have  largely implemented  over the past four decades. However, the implementation of these reforms quickly revealed a lack of capacity in many least developed countries (LDCs) to gainfully participate in liberalized global trade. This is because LDCs face many constraints to trade, including but not limited to: weak and unstable productive capacities, poor market infrastructure, and an inability to meet required high quality s...

Corti Paul Lakuma and Musa Mayanja Lwanga   Uganda might be looking at good news in 2015: The country’s gross domestic product (GDP) is projected to grow at 6.2 percent. Ugandans might not want to celebrate yet, though: Despite this favorable forecast, Uganda faces three major obstacles that will likely raise inflation, which in turn will cause a depreciation of the shilling as well as rising interest rates. In fact, in 2015, inflation is projected to grow to 5.4 percent from 4.5 percent. Uganda’s economy will likely see bad times this year unless these major challenges are tackled head-on. Uganda Will Likely See Inflation Rise This prediction of rising inflation is based on several factors in the upcoming year. These include: Expected  government borrowing and expenditure on non-productive activities  such as the presidential and parliamentary elections to be held the following year. Supply-side constraints.  Businesses are cutting back the supply of essen...

By Joseph Mawejje,  Research Analyst EPRC After the Minister of Finance read the national budget on June 12 th 2014, there has been a raging debate on how to finance Uganda’s UGX 11,088 billion proposed tax revenue.  Most of the protagonists have been against the reinstatement of VAT on agricultural services. Within this realm, the New Vision, July 30, 2014 carried an article describing how Coca Cola—a leading multinational producer of soft drinks—was negotiating a tax waiver in lieu for providing logistical support to transport medical equipment from the USA to Uganda. The equipment will be provided by Medsave—a USA based medical charity. Negotiations for Tax Waiver Specifically, Coca cola was requesting for exemption of excise duty on all soda products and reduction to 5% of the excise duty on mineral water.  In exchange, it was reported, the company would ship to Uganda “donated medical equipment worth US$20 million from the USA.” The arguments given by...

Pual Corti Lakuma is a Research Analyst at the the Economic Policy Research Centre Uganda's tea industry has been a subject of neglect by both the public and private sector. Despite the neglect, tea is Uganda?s third export by value. In 2012/13, Uganda earned US$ 72 Million from exporting 63,456 tonnes of tea. Tea exports accounted for 2.8 percent of total Uganda?s exports and 0.36 percent of 2012/13 Gross Domestic Product (GDP). Owing to its ability to generate exports revenue, tea is earmarked among the ten priority crops in the agricultural sector Development Strategy and Investment Plan (DSIP).  Therefore, tea is a viable tool for driving the vision 2040 agenda. In spites of its contribution to the economy, Uganda?s tea industry faces many structural challenges. For instance, it cannot compete favourably with other tea sectors such as the one in Kenya. In 2012/13 Kenya earned US$ 1.23 Billion from exporting 429, 000 metric tonnes. Kenya?s earnings represented 22 perc...

Uganda has recorded slow progress in ensuring that majority of Ugandan households have access to electricity. This has been partly due to the limited exploitation of renewable sources that can offer alternative sources of energy. In 2011, for example, renewable energy other than from hydro sources accounted for 12 percent of total electricity generation. Data from the Uganda Bureau of Statistics indicate that access to electricity by Ugandans has improved modestly from 9.5 per cent in 2002 to 14 per cent in 2013. Consequently current electricity access rates are some of the lowest in Sub Saharan Africa. There are also challenges of ensuring that majority of rural dwellers get access to electricity.    Unequal Distribution     Energy access is unequally distributed across the country and the provision of electricity has been limited to mainly urban and semi-urban areas. While 40 percent of urban households have access to electricity, progress in the rural are...

By Shifa Mwesigye Uganda’s Human Development Index (HDI) continues to fall despite registering growth in the last 20 years. Uganda is ranked 164 out of 187 of the assessed countries. In 1990, Uganda’s HDI stood at 0.306 and was comparable to Benin, Central Africa Republic, and Gambia. Today, Uganda has attained a 65% improvement and HDI stands at 0.484. While Uganda’s income growth due to investment in poverty alleviation has improved, poverty has also fallen from 56.4% in 1992 to 19.7% in 2013. Life expectancy and expected years of schooling have also improved. But Uganda continues to fall among the lowest 42 countries meaning that the country’s growth has does not reflect improvement in the livelihoods of its people. Uganda is ranked below its neighbours Kenya, Rwanda and Tanzania and in fact the index is below the sub Saharan Africa average of 0.502. The HDI report released by United Nations Development Program (UNDP focused on Sustaining Human Progress: Reducing Vulne...