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Country Commercial Guides for FY 2000: Uganda Report prepared by U.S. Embassy Kampala, released July 1999   Note*

I. EXECUTIVE SUMMARY

This Country Commercial Guide (CCG) presents a comprehensive look at Uganda's commercial environment, using economic, political and market analysis. The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. CCGs are prepared annually at U.S. Embassies through the combined efforts of several U.S. Government agencies.

Uganda boasts a growing economy with generally low, stable rates of inflation. While the market is small and average income is low, Uganda is currently considered to be a major success story in Sub-Saharan Africa. Uganda has taken substantial strides to liberalize the economy, maintain low inflation and allow the economy to grow, which it has done at high rates since the National Resistance Movement took power in 1986. GDP growth, which averaged over seven percent in the three previous years, was five percent in 1996/97 and 1997/8. According to the IMF and the Government of Uganda (GOU), GDP growth was 7.8 percent in 1999/9, with non-traditional growth areas continuing to show strength. The GOU is privatizing parastatals, revising regulations to promote foreign investment and following IMF guidelines to restructure the economy. Nonetheless, privatization has been beset by corruption, the financial sector has been affected by bank failures, and the banking sector is poorly regulated. Uganda's development of capital markets has been anemic. International donors provide crucial budgetary assistance amounting to 55 percent of government expenditures in 1998/9.

Ugandan attitudes toward the U.S. are favorable, as are business attitudes generally. However, Uganda has traditionally traded with nearby countries, South Africa, and with Europe, especially the United Kingdom. American manufacturers wishing to export to Uganda must overcome buyers' comfort with familiar trading partners and concern about the ability of American manufacturers to provide parts and service. Transportation costs from the United States tend to make some U.S. goods less competitive. Also, new products often compete with used goods (especially in automobiles and clothing). Prospects for U.S. investment in Uganda are in the following sectors: agriculture, food processing, livestock, tourism, infrastructure, and transportation, import substitution, light manufacturing, mining, and telecommunications.

The barriers to doing business in Uganda include problems with financing, corruption, transportation costs, poor infrastructure, inefficient government services (especially in the Immigration Department, Customs Department, and Uganda Revenue Authority), and the fact that the economy is emerging from a history of government intervention and significant government mismanagement. Roadblocks particular to American companies include Uganda's traditional links to East Africa and the United Kingdom. Most development projects are funded by outside donors who often informally link their money to purchases from companies based in their own country. Some non-American businesses competitors use bribery to influence government action.

Country Commercial Guides are available for U.S. exporters from the National Trade Data Bank's CD-ROM or via the Internet. Please contact STAT-USA at 1-800-STAT-USA for more information. Country Commercial Guides can be accessed via the World Wide Web at http//www.stat-usa.gov, http://1997-2001.state.gov/, and http://www.mac.doc.gov. They can also be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NTIS. U.S. exporters seeking general export information/assistance and country-specific commercial information should contact the U.S. Department of Commerce, Trade Information Center by phone at 1-800-USA-TRAD(E) or by fax at (202)482-4473.