A state not without resources
Let's start with the primary sector (24% of GDP in 2021). With economic diversification, agriculture's share of the country's wealth is declining. Nevertheless, the sector still employs 65-70% of the country's working population and generates almost half of export earnings. The agricultural sector remains essentially food-producing (the main food crop being bananas). Exports are dominated by cash crops, in particular coffee (12% of the country's export earnings in 2024). Other major traditional export crops include cotton, tea, tobacco, sugar cane, cocoa, cut flowers and vanilla. In the mining sector, copper and cobalt were widely exploited in the 1960s, but their production is now marginal; gold is now Uganda's main mineral wealth (44% of the country's total exports). Let's move on to the secondary sector. Since the start of the new millennium, this sector has been growing steadily in Uganda, rising from 10% of GDP in 2001 to 28% in 2022. The expansion of manufacturing production is attributable to textiles, cement and everyday consumer goods (soap, edible oil, sweetened beverages, etc.). The holding of the Commonwealth Summit in Kampala in 2007 enabled Uganda to improve its infrastructure, particularly roads and electricity, which in turn boosted the construction industry by creating jobs for skilled craftsmen. Since then, other major projects have been commissioned, such as the construction of hydroelectric dams (Bujagali, Karuma and Isimba). Although criticized by environmentalists, these dams, according to the rhetoric of state authorities and international financial institutions, are supposed to generate electricity for 50% of the country's population at half the current cost of thermal electricity. Finally, a few words on the tertiary sector (50% of GDP). The telecommunications sector is characterized by healthy competition between operators. Cell phone companies are among the most prosperous in the country, with steadily rising revenues and some 28 million customers by 2022. As a result of economic liberalization, there are now some twenty commercial banks. As for the media sector, it has seen the emergence of several private newspapers, radio stations and television channels over the last few years.
A new oil Eldorado?
Oil? It's the great economic challenge of the next few years. While geological and geophysical studies undertaken as early as the 1920s revealed the oil potential of the Lake Albert Basin, it was exploration in the 1990s that led to the discovery of marketable hydrocarbon deposits in the 2000s. In 2020, the directly exploitable oil reserve stood at 1.4 billion barrels (out of an estimated total reserve of 6.5 billion barrels). Once the Kabaale refinery (Hoima district) and the oil pipeline from the Albertine Graben to the Indian Ocean coastline at Tanga (Tanzania) have been completed, Uganda's already-delayed oil production and export should begin in 2025. By the middle of this decade, the Ugandan government expects to be gleaning more than $2 billion in annual oil revenues. Presented by the state authorities as a boon to the country's development, the forthcoming oil exploitation nonetheless raises numerous environmental, social and economic issues, particularly in the Hoima and Buliisa districts where most of the boreholes are located. Relations with the DRC, with which Uganda shares the waters of Lake Albert, and the potential establishment of a rentier state are just two of the issues raised by national and international observers of the Ugandan political scene.
What about tourism?
Long lagging behind its East African neighbors, Kenya and Tanzania, Ugandan tourism has experienced an unprecedented boom over the past decade (albeit 14 times less than in Kenya, in 2024!). After a difficult period in the early 2000s, when a group of eight tourists were murdered by Congolese rebels in Bwindi Park, the number of foreign visitors has resumed its upward trend, rising from 946,000 in 2010 to 1.8 million in 2018. The climate of political stability during the 2010s encouraged the influx of foreign capital. With the improvement of road and hotel infrastructure over the past fifteen years, the tourism sector has been a major driver of economic growth, accounting for 7.75% of GDP and almost 7% of direct employment in 2018. With revenues hovering around the billion-dollar mark, it represented the second-largest source of revenue, after gold, for the public treasury. The sharp drop in the number of foreign tourists visiting Uganda in 2020 during the Covid-19 pandemic subsequently led to a wave of redundancies and bankruptcies: in June 2020, an estimated 74.4% of employees and contractors in the sector had lost their jobs. Fortunately, the tourism sector is recovering strongly from the decline caused by the pandemic. In 2023, the number of foreign visitors rose by 56% year-on-year to 1.27 million, with projections of 1.5 million arrivals by the end of 2024. The sector now contributes 4.7% of GDP and supports over 610,000 jobs. The positive trend continues into 2024, with hopes that the sector will quickly surpass 2019 levels.
