73 Chart 4.15: Rwanda main crops
Source: FAOstat
Chart 4.16: Rwanda percentile of GDP share
Source; The World Bank data
74 The new dictator, Idi Amin, remained for nine years and this time was marked by economic decline, for three main reasons: Amin's ordered all Asians people who were not Ugandan citizens must to leave the country – around 60 thousand people –. There were many human rights violations, the UN estimated that 100 thousand Ugandans had been murdered. Currently Uganda's government says that 300 thousand people were killed. Finally, in 1978, Ugandan Army invaded the U. R. of Tanzania's territory looking for exile.
As a response, the U. R. of Tanzania invaded Uganda in 1979, the army was helped by anti-Amin forces within Uganda, but after Amin fell between 1980 and 1986, Uganda had five presidents and a very hostile civil environment. However, the last president Yoweri Museveni brought stability and improved human rights protection, in 1993 civil war was over and the country made the new constitution which restored the traditional kings
Now Uganda's territory has 236,04 thousand square kilometers with a complicated political map, the country is divided in four regions; Central – capital –, Eastern, Western and Northern. But there are more than one hundred autonomous districts, and, besides, Uganda has six traditional kingdoms that enjoy degrees of cultural autonomy.
It happened because in 1995 the constitution reestablished autonomy for each traditional ethnic group. Even though apparently there was political confusion, Uganda’s fight against extreme poverty worked well, the rural poverty decreased from 65 percent in 1990 to 34,2 percent in 2005. And the income GDP per capita rose from USD 242,76 in 1990 to USD 313,59 in 2005, of course we cannot forget that the civil war provoked the fall of GDP per capita among 1991 and 1994.
At the same time the agricultural gross per capita production index (API) had an inverse trend with respect to income per capita, it decreased from 112,28 points in 1990 to 99,89 points in 2005. It is important to explain the low performance of the agricultural trade balance (chart 4.17).
75 Chart 4.17: Uganda macroeconomic environment
Source: Agricultural trade balance and gross per capita produciton index by FAOstat and rural poverty line and GDP per capita by The World Bank data.
Despite API's low performances, the rural environment in Uganda has positives features; first of all Uganda had good land and water resources, secondly the farmers use good agricultural methods to enhance the productivity like "coffee-banana techniques", and the Ugandan land tenure system has practically been resolved since 1995 and there has not been the title land problem.
The 1995 Constitution recognized the four tenure systems existing before, hence in accordance with local governance, the Ugandan government wrote:
• All Ugandan citizens owning land under customary tenure may acquire certificates of ownership in a manner prescribed by Government;
• Land under customary tenure may be converted into freehold ownership by registration;
• any lease which was granted to a Ugandan citizen out of public land may be converted into freehold in accordance with law made by Parliament; and,
• Lawful or bona fide occupants of Mailo land, freehold or leasehold land shall enjoy security of occupancy of the land.
76 After it, one part of agriculture was modernized and some agricultural commodities as coffee, tea, tobacco and cotton gained importance. Even though the rural population density rose from 315,25 people per one square kilometer of arable land in 1990 to 465,03 people in 2005 (World Bank data), the national average of farm size remained 2,2 hectares (FAO data); the non-agricultural sector also improved and jobs and welfare were created.
This improvement was not only in the agricultural sector, Uganda’s new path meant progress for all the macroeconomic system. In 1990 the domestic credit to the private sector did not exist, the FDI had negative inflows, the domestic market was very close and the merchandise trade represented only 10 percent of GDP; the Government budget account was surreal.
With very hard work, Uganda “made a miracle”, since in 2005 the domestic credit to the private sector was 8,63 percent of GDP, while the FDI represented 4,11 percent of GDP, Uganda’s economic modernizing and merchandise trades accounted for more than 31 percent of the GDP and the Government account was negative 1 percent compared to the GDP.
This “miracle” was possible with the convergence of two factors, first the political desire to change the social-economic environment, second because Uganda had most of the population in rural areas (89%) and with clear and fair rules and good natural resources as land and water the agricultural sector spread the welfare.
It affected the education index: the gross school enrollment ratio at the primary level leapt from 69,51 percent in 1990 to 123,22 percent in 2005. Also the situation of the health system improved, and two important indexes, life expectancy and mortality rate, also regained. Life expectancy at birth improved from 47,35 years in 1990 to 50,12 in 2005 and the mortality rate per one thousand live births fell from 105,8 to 74,7 in the same period (World Bank).
Also for HIV/AIDS, that is an endemic SSA problem, Uganda had good numbers: the adults infected represented 10,2 percent of the population in 1990 and declined to 6,4 percent of the adult population in 2005 (UN).
Almost all the infrastructure system improved its numbers, the national level of water supply rose from 43 percent of household in 1990 to 64,5 percent in 2005.
77 There naturally exists a gap between rural and urban areas, in 1990 it was 50 percent, in other words for each house with water access in rural areas Uganda had 2 in urban areas. However in 2005 this gap was reduced to 30 percent (AMCOW 2010).
The roads density per one hundred square kilometers of land area had grown from 7,77 kilometers in 1990 to 29,35 kilometers in 2005. On the other hand, the rail lines density decreased from 0,51 kilometers per one hundred square kilometers of land area to 0,10 kilometers in 2005, therefore it influenced the government decision to intensify the road transportation and give up the rail lines "of colonial model".
However Uganda has a bigger problem, the electricity supply: even though it rose by 350 percent between 1990 – 2005, it covered only 9 percent of Ugandan households in 2005, furthermore its supply was concentrated in the central area – the capital – cities in the others regions depended on generators and rural areas simply did not have electricity because 90 percent of the country’s population was not connected to the national network.
Fortunately, as we know, the electricity supply did not influence the start-up and the development of the basic agriculture as the road's influence. Electricity supply will be important if Ugandan farmers become exporters of fresh fruits and vegetables, but if they wish this to come true they should overtake food safety barriers first.
Nowadays the main goods exported by Uganda are; coffee, tea, fish and fish products and cotton These goods go to Sudan (14,3%), Kenya (9,5%), Switzerland (9%) and Rwanda (7,9%). Uganda's imports are petroleum, capital equipment, vehicles and medicines. The goods come mainly from UAE (11,4%), Kenya (11,3%), India (10,4%) and China (8,1%) (CIA data).
With a trade balance deficit of USD 1.178 million in 2005, Uganda has with his major trade partners, the EU 27, the biggest gap between export and import. It represented 21,3 percent of the whole Ugandan trade and this trade contributed for 40 percent of the deficit. They have basically imported food and fish (78,3%) and have exported mineral fuels (28,8%) and machinery (26%) (Euro stat).
78 Environmental business in Uganda is very a friendly, the rules are simple, the labour market is dynamic and public offices have one of the highest corruption levels in SSA (Doing Business data), but the energy supply problem practically prevented industrial development. Meanwhile, the agricultural sector made a sprint after 1995 but couldn’t continue to run at the same speed to transform into an advanced agriculture, because the flow of urbanization couldn’t happen in a country where the cities do not have electricity supply.
Ugandan agriculture is being modernized by the private sector, which means that marginal areas are not used with the same goals. Agricultural commodities need the good corridors to access the global market, thus in remotes areas there were no investments, and there the farmers continued to live on subsistence agriculture, and the majority of arable land was used for plantains (FAO data) (chart 4.18)
Chart 4.18: Uganda main crops
Source: FAOstat
Despite the modern profile since 1995, the Ugandan government had new challenges:
the GDP share trend altered, it flexed to stabilization, thus this landlocked country should do the next step to continue fighting against poverty. Either spreading welfare with subsidies programs, or make investments that help the industrial sector development (chart 4.19).
79 Chart 4.19: Uganda percentile of GDP share
Source; The World Bank data