There comes a defining moment in the life of every nation when its future can no longer be entrusted to inertia, imitation, or improvisation. At such a moment, the most patriotic act is not applause but rigorous thought; not repetition of slogans but the courage to interrogate fundamentals; not borrowed prescriptions but the audacity to design an economic destiny rooted in national reality. Uganda stands unmistakably at that moment.
After more than three decades of reform experiments, structural adjustment, liberalisation, privatisation, deregulation, donor-conditioned blueprints, and periodic state improvisation, the central question can no longer be deferred or sentimentalised: what kind of economics actually works for Uganda? Not in theory, not in econometric abstraction, not in donor reports but in the lived realities of its people, its history, its institutions, its political economy, and its long-term aspirations.
Any economics that works for Uganda must begin with intellectual honesty. Uganda is not Europe, not East Asia, not a blank slate, and certainly not a laboratory for ideological purity. It is a post-colonial, late-developing society, transitioning slowly and unevenly from agrarian foundations toward industrial possibility. It bears the weight of historical distortions, colonial extraction, uneven regional integration, deep demographic pressures, and a youthful population whose most abundant resource is not oil, gold, or rare earths, but human potential. This is not rhetoric; it is demographic fact. According to UBOS, over 75 percent of Uganda’s population is below the age of 30, and more than 700,000 young Ugandans enter the labour market annually, confronting an economy that structurally produces far fewer decent jobs than it creates people.
Simon Kuznets warned as early as 1966 in ‘‘Modern Economic Growth: Rate, Structure and Spread’’, that “there are no automatic forces in economic growth which lead to a more equitable distribution of income.” Uganda’s experience affirms this caution with uncomfortable clarity. Elegant graphs and orthodox models, when detached from social structure, history, and power relations, become instruments of policy illusion rather than transformation. Economics that ignores production structures, institutional capacity, and political incentives, however mathematically refined, is destined to misfire.
Since the Economic Recovery Programme of the late 1980s and early 1990s, Uganda has frequently been cited as a reform success story. Inflation collapsed from triple digits to single digits; GDP growth averaged between 6 and 7 per cent for nearly two decades; aid inflows expanded rapidly; and macroeconomic stability became the central anchor of policy. Yet beneath these achievements lie a stubborn and revealing paradox: growth occurred, but structural transformation did not.
According to the Uganda Bureau of Statistics, over 65 percent of Ugandans remain trapped in low-productivity subsistence agriculture. Manufacturing continues to contribute only about 8–9 per cent of GDP, a figure that has remained largely stagnant for over two decades. Youth unemployment and underemployment persist at structurally dangerous levels, while vulnerable employment dominates the labour market. The World Bank estimates that more than 80 per cent of Uganda’s workforce remains informally employed, with limited skills accumulation, low wages, and minimal productivity growth. Poverty reduction has slowed markedly since 2013, inequality has widened, and regional economic asymmetries remain entrenched.
This outcome is not accidental. As Dani Rodrik observed in One Economics, Many Recipes (2007), “Economic growth does not require wholesale reform; it requires targeted interventions that relax the most binding constraints on economic activity.” Uganda’s failure has never been a shortage of reforms; it has been a shortage of strategic coherence, a nationally anchored vision of production, capability-building, and long-term transformation, disciplined by institutions and protected from policy volatility.
For decades, Uganda, like much of Africa, was encouraged, and at times coerced into embracing a narrow conception of economics rooted in market fundamentalism. Liberalisation was treated as an end in itself; privatisation as synonymous with efficiency; deregulation as development. Yet history is unequivocal: no country has ever industrialised by ideology alone. Economic transformation has always been politically organised.
Friedrich List warned in The National System of Political Economy (1841) that “free trade is beneficial only among nations of equal industrial development.” Alexander Hamilton made the same argument in his 1791 Report on Manufactures, insisting that infant industries require protection and state support. Ha-Joon Chang later reinforced this historical truth, writing in Bad Samaritans (2008) that “the rich countries did not get rich by practising free trade; they got rich by using tariffs, subsidies, and regulation, and then rewrote the rules.” Uganda liberalised before it industrialised, opened markets before building productive capacity, and deregulated finance before aligning it with national development priorities. The predictable result has been premature deindustrialisation and deepened import dependency.
An economics that works for Uganda must, therefore, be production-centred, not consumption-driven. Uganda imports what it can produce, exports what it barely processes, and consumes what it does not manufacture. This structural imbalance drains foreign exchange, weakens the shilling, and systematically exports jobs.
Bank of Uganda data show a persistent current account deficit driven largely by manufactured imports, machinery, processed consumer goods, and petroleum products, while exports remain concentrated in raw or minimally processed commodities. Coffee, Uganda’s leading export, still earns the country less than 10 per cent of its final retail value on the global market. In 2023 alone, Uganda exported over USD 800 million worth of coffee but imported processed food, beverages, and manufactured consumer goods worth several multiples of that figure. This is not comparative advantage; it is comparative surrender.
As Albert Hirschman argued in The Strategy of Economic Development (1958), development advances through deliberate backward and forward linkages that expand domestic capabilities. Uganda must, therefore, process what it grows, manufacture what it consumes, and export what it finishes. No nation has ever imported its way to prosperity.
Agriculture must be the foundation of this transformation but not as subsistence. With fertile soils, diverse agro-ecological zones, and access to regional markets, Uganda’s failure is not agricultural potential but agricultural political economy. Productivity remains low, post-harvest losses exceed 30 per cent in several value chains, irrigation coverage remains below 5 percent of arable land, and agro-processing capacity is grossly underdeveloped.
History again offers guidance. Vietnam, emerging from war in the late 1970s poorer than Uganda is today, deliberately combined agricultural reform, rural industrialisation, export discipline, and state coordination to become a global manufacturing hub within three decades. Ethiopia, whose GDP per capita in the early 2000s was comparable to Uganda’s, used coordinated agricultural transformation, extension services, rural infrastructure, agro-industrial parks, and disciplined public investment to dramatically expand manufacturing exports and reduce poverty. These outcomes were not accidental; they were designed.
Industrialisation, however, does not occur spontaneously. Infrastructure, reliable energy, affordable long-term finance, skills, and technology are not market accidents; they are policy outcomes. Uganda’s cost of capital often exceeding 18 to 20 percent renders domestic manufacturing structurally uncompetitive. No serious industrial economy has developed under such financial conditions.
Developmental finance is therefore indispensable. Germany’s KfW, Japan’s Ministry of International Trade and Industry, and South Korea’s state-directed credit system were not distortions; they were engines of transformation. Alice Amsden observed in Asia’s Next Giant (1989) that “getting prices wrong was not a mistake; it was a strategy.” Uganda must align finance with national priorities through industrial banks, long-term patient capital, targeted subsidies, and strict performance benchmarks.
Uganda’s constitutional order already provides a powerful but underutilised economic framework. Article 152 empowers Parliament to tax not merely to raise revenue but to shape economic behaviour. Tax policy must reward production, innovation, and employment, not speculation, rent-seeking, or import dependency. Article 237 vests natural resources in the State to be held in trust for the people of Uganda. This trust imposes a legal and moral obligation: natural resources must finance long-term structural transformation, not elite consumption or short-term fiscal firefighting.
Botswana’s management of diamonds offers a relevant contrast. Through institutional discipline, transparency, and long-term planning, Botswana converted mineral wealth into sustained growth and social investment, avoiding the resource curse that has afflicted many peers.
Regionally and globally, Uganda is not operating in a vacuum. The African Continental Free Trade Area presents opportunity, but also risks. Without competitive domestic industries, Uganda risks becoming merely a market for stronger economies. Samir Amin warned in Unequal Development (1976) that integration without production deepens dependency. Uganda must, therefore, integrate from a position of productive strength, not commercial vulnerability.
History also teaches that economic sovereignty is contested terrain. From Iran’s oil nationalisation in 1953 to contemporary struggles over strategic minerals, policy autonomy is often resisted. Susan Strange noted in States and Markets (1988) that power in the global economy is exercised not only through force but through finance, trade rules, and institutional leverage. Uganda must pursue economic pragmatism with geopolitical intelligence, diversifying partnerships, strengthening domestic capacity, and protecting policy space.
No economic strategy can succeed without people at its centre. Education, healthcare, and social protection are not consumptive luxuries; they are productive investments. Article 30 of the Constitution guarantees education; Article 45 recognises rights essential to human dignity. These are economic imperatives. A workforce that is unskilled, unhealthy, and insecure cannot sustain growth.
Singapore’s experience is instructive. In the 1960s, its GDP per capita was comparable to many developing countries. Under Lee Kuan Yew’s leadership, Singapore pursued relentless investment in skills, discipline, and institutions. “The only natural resource we have is our people,” he stated in 1967. Uganda’s demographic structure makes this lesson urgent, not optional.
Finally, economics that works for Uganda must be ethical and accountable. Corruption, patronage, and rent-seeking are not merely moral failures; they are economic cancers that distort incentives, misallocate capital, and erode institutional trust. Amartya Sen reminded us in Development as Freedom (1999) that development is not merely income expansion but the enlargement of human capabilities and freedoms.
Growth without justice breeds instability. Wealth without legitimacy breeds resentment. Institutions without trust eventually fail.
Uganda must, therefore, reject false binaries between state and market, growth and equity, nationalism and openness. The successful economies of the world were neither ideologically pure nor externally obedient; they were strategically intelligent. Uganda must plan, produce, protect, and progressively open, on its own terms, at its own pace, guided by evidence rather than fashion.
In the final analysis, economics that works for Uganda is not imported; it is constructed. It is rooted in history, anchored in law, disciplined by ethics, and animated by national purpose. It treats markets as tools, not masters; growth as a means, not an end; and people not as statistics, but as the sovereign source of labour, legitimacy, and leadership.
Uganda does not lack potential. What it has lacked is the audacity to design an economy worthy of its promise. The time to do so is not tomorrow. It is now.
Atwemereireho Alex,
alexatweme@gmail.com
The writer is a lawyer, researcher and governance analyst.
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