Country Report Uganda March 2010

Outlook for 2010-11: Policy trends

Uganda has maintained a high level of macroeconomic stability and economic growth during the past 20 years, but it needs to tackle bottlenecks in transport and energy infrastructure to boost employment and poverty reduction. The gov-ernment recognises this; more than 17% of the budget for fiscal year 2009/10 (July-June) is devoted to the Ministry of Works and Transport. Recent economic growth has been driven by the industry and services sectors, but the large number of people who depend on agriculture for a living (over 70% of the labour force) will ensure that it remains a high-profile issue for the government. Two years of high food inflation and famine conditions in the north and east will increase its profile further in 2010-11. Government rhetoric about boosting agricultural productivity will continue, but progress will be slow. Despite spend-ing increases to ease food insecurity and buy support for the NRM in rural areas before the 2011 election, overall financial support for the sector will remain low. There will be some positive economic developments, though: the introduction of an EAC common market from mid-2010 will lower barriers to trade, labour and investment, and the recent passage of the Land (Amend-ment) Bill will improve security of tenure, increasing the scope for investment.

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