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Uganda Uganda at a Glance: 2002-03

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Uganda Uganda at a Glance: 2002-03 COUNTRY REPORT Uganda Uganda at a glance: 2002-03 OVERVIEW President Yoweri Museveni will come under increasing criticism in the short term because of allegations of corruption and other misconduct against him and his family. Relations between Uganda and Rwanda are likely to remain cool in the short term, but as the peace process in the Democratic Republic of Congo moves forward, relations are expected to warm slowly. The prolonged slowdown of the global economy—exacerbated by the September attacks in the US—is expected to keep real GDP growth at around 5.6% in 2002, and the predicted global recovery in 2003 is expected to lift real GDP growth to 6.2%. The current-account deficit is expected to narrow to 8.4% of GDP in 2002 and 7.9% of GDP in 2003, mainly as a result of improving export diversity, strong inflows of net transfers and slower import growth. Key changes from last month Political outlook • There are fears among local and international organisations that the proposed Media Bill 2001 may lead to a reduction of press freedoms in Uganda when it replaces current, more liberal, legislation. Economic policy outlook • The World Bank has identified the weakness of the transport and power infrastructure as a major constraint on development in Uganda and is providing funds for the development of the country’s roads and the construction of a new power station. The government will continue to seek improvements in tax administration and has announced that it will allow commercial banks to accept tax payments, previously the preserve of the Uganda Commercial Bank. Economic forecast • As a result of the deeper than expected global economic slowdown, real GDP growth is now expected to be 5.4% in 2001. Assuming normal weather, agricultural growth will be fairly constant at about 5.5% per year over the forecast period, caused mainly by growth in non-traditional crops. Some foreign investment in manufacturing and mining should see industry grow by around 6.5% in 2002 and 6.8% in 2003. Services growth is expected to remain stagnant at 5.8% in 2002, rising to 6% in 2003. October 2001 The Economist Intelligence Unit 15 Regent St, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through our digital portfolio, where our latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising seminars and presentations. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent St The Economist Building 60/F, Central Plaza London 111 West 57th Street 18 Harbour Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) 7830 1007 Tel: (1.212) 554 0600 Tel: (852) 2585 3888 Fax: (44.20) 7830 1023 Fax: (1.212) 586 0248 Fax: (852) 2802 7638 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: www.eiu.com Electronic delivery This publication can be viewed by subscribing online at www.store.eiu.com Reports are also available in various other electronic formats, such as CD-ROM, Lotus Notes, online databases and as direct feeds to corporate intranets. For further information, please contact your nearest Economist Intelligence Unit office Copyright © 2001 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author's and the publisher's ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 1465-640X Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Patersons Dartford, Questor Trade Park, 151 Avery Way, Dartford, Kent DA1 1JS, UK. Uganda 1 Contents 3 Summary 4 Political structure 5 Economic structure 5 Annual indicators 6 Quarterly indicators 7 Outlook for 2002-03 7 Political outlook 8 Economic policy outlook 9 Economic forecast 12 The political scene 19 Economic policy 22 The domestic economy 22 Economic trends 24 Agriculture 25 Manufacturing 25 Mining and minerals 26 Infrastructure and services 28 Foreign trade and payments List of tables 10 International assumptions summary 11 Forecast summary 14 Gold production and exports 21 Corruption Perceptions Index 25 Coffee production List of figures 12 Gross domestic product 12 New Uganda shilling real exchange rates 23 Exchange rate, 2001 23 Inflation, 2001 28 Commodity prices EIU Country Report October 2001 © The Economist Intelligence Unit Limited 2001 Uganda 3 Summary October 2001 Outlook for 2002-03 President Yoweri Museveni will come under increasing criticism in the short term, because of allegations of corruption and other misconduct against him and his family. Two bills will be watched closely by international donors over the forecast period: the Political Organisations Bill and the Media Bill 2001. Both will be indicative of the government’s longer-term intentions. Relations between Uganda and Rwanda are likely to remain cool in the short term, but as the peace process in the Democratic Republic of Congo (DRC) moves forward relations are expected to improve. The prolonged slowdown of the global economy—exacerbated by the September attacks in the US—is expected to result in real GDP growth of about 5.6% in 2002, and the predicted global recovery in 2003 is expected to lift real GDP growth to 6.2%. The current- account deficit is expected to narrow to 8.4% of GDP in 2002 and 7.9% in 2003, mainly because of improving export diversity, strong inflows of net transfers and slower import growth. The political scene President Museveni has appointed a new cabinet consisting of firm supporters of the Movement. Mr Museveni and family members have been accused of involvement in the 1997 Uganda Commercial Bank (UCB) scandal. The Ugandan-sponsored Congo Probe Commission has begun looking into reports of natural resource theft in the DRC. Colonel Kiiza Besigye has fled to the US, fearing for his safety. Economic policy The government has continued to move forward with privatisations of UCB and the power sector. Stanbic Bank and Kinyara Sugar Works await market listings. Amnesty International has reported that corruption in Uganda remains a major obstacle to economic reform. The process of collecting tax revenue has been liberalised to improve payment, and amendments to the VAT law have been made to expand the tax base. The domestic economy The Bank of Uganda has continued to intervene in the foreign exchange market to support the Uganda shilling. The problem of bad loans in the banking sector has improved. Commercial lending to the private sector has remained subdued. Prospects for oil discovery near Lake Albert are better. A new feasibility study for the Eldoret-Kampala oil pipeline has been commissioned. Tax on mobile phones has discouraged investment. Foreign trade and Coffee export receipts have continued to slide, although tea and fish exports payments have been performing well. Cotton exports have been hindered by low global prices and poor production. The World Bank has approved two loans to develop roads and power infrastructure in Uganda. The International Development Association has announced that it may commit up to US$1.1bn in budgetary assistance to combat poverty. Editors: Christopher Eads (editor); Pratibha Thaker (consulting editor) Editorial closing date: October 8th 2001 All queries: Tel: (44.20) 7830 1007 E-mail: [email protected] Next report: Full schedule on www.eiu.com/schedule EIU Country Report October 2001 © The Economist Intelligence Unit Limited 2001 4 Uganda Political structure Official name Republic of Uganda Form of state Unitary republic Legal system Based on English common law and the 1995 constitution National legislature Parliament of Uganda; 282 members, 214 elected by universal suffrage, with the remainder selected by electoral colleges; all serve five years National elections March 2001 (presidential) and June 2001 (legislative); next elections due in early 2006 (presidential) and mid-2006 (legislative) Head of state President, elected by universal suffrage for a five-year term National government The president and his appointed cabinet; most recent reshuffle in September 2000 Main political parties The Movement (formerly the National Resistance Movement) is the ruling authority, but not a formal political party; the Democratic Party (DP), the Uganda People’s Congress (UPC), the Uganda Patriotic Movement (UPM) and the Conservative Party (CP) are all registered political parties, but election candidates stand as independents President & commander-in-chief Yoweri Museveni Vice-president Specioza Kazibwe Prime minister Apollo Nsibambi First deputy prime minister & minister of internal affairs Eriya Kategaya Second deputy prime minister & minister of disaster preparedness Brigadier Moses Ali Third deputy prime minister
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