A state not without resources
Let us first look at the primary sector (25% of GDP in 2019). With economic diversification, the share of agriculture in the country's wealth is declining. Nevertheless, the sector still employs 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, meanwhile, are dominated by cash crops, particularly coffee (13% of the country's export earnings in 2019). Other traditional major export crops include cotton, tea, tobacco, sugarcane, cocoa, cut flower 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 in 2020). Let's move on to the secondary sector. Since the beginning of the new millennium, the secondary sector has been growing steadily in Uganda, rising from 10% of GDP in 2001 to 27% in 2019. The expansion of manufacturing production can be attributed to textiles, cement and consumer goods (soap, edible oil, sweetened drinks, etc.). The holding of the Commonwealth Summit in Kampala in 2007 enabled Uganda to improve its infrastructure, especially roads and electricity, which largely boosted construction 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 the state authorities and international financial institutions, are supposed to allow the generation of electricity for 50% of the country's population at a production cost twice as low as the current cost of thermal electricity. Finally, a few words on the tertiary sector (48% of GDP). The telecommunications sector is characterized by healthy competition between operators. Mobile phone companies are among the most successful in the country, with steadily increasing revenues and some 26.5 million customers in 2020. As a result of economic liberalisation, there are also some 20 commercial banks. As for the media sector, it has seen the emergence of several private newspapers, radios and televisions in the last few years.
A new oil Eldorado?
Oil? It is the great economic challenge of the next few years. Although geological and geophysical studies undertaken as early as the 1920s revealed the oil potential of the Lake Albert Basin, it was mainly exploration, which began in the 1990s, that led to the discovery of marketable hydrocarbon deposits in the decade 2000. In 2020, the directly exploitable oil reserve amounted to 1.4 billion barrels (out of an estimated total reserve of 6.5 billion barrels). Uganda's already delayed oil production and export is expected to begin in 2024 or 2025, once the Kabaale refinery in Hoima district is completed and the pipeline to take the oil from the Alberta Graben to the Indian Ocean coast at Tanga in Tanzania is built. The Ugandan government expects to earn more than $2 billion in annual oil revenues by the middle of this decade. Although presented by state authorities as a boon to the country's development, the forthcoming oil development raises many environmental, social and economic issues, particularly in the Hoima and Buliisa districts where most of the drill holes are located. Relations with the DRC, with which Uganda shares the waters of Lake Albert, and the potential establishment of a rentier state are two of the issues raised by national and international observers of Uganda's political scene.
What about tourism?
Long lagging behind its East African neighbours Kenya and Tanzania, Uganda's tourism has experienced an unprecedented boom in the last decade. After a difficult period in the early 2000s, after a group of eight tourists were murdered by Congolese rebels in Bwindi Park, the number of foreign visitors resumed its rise 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 15 years, the tourism sector has been an important vector of economic growth: it accounted for 7.75% of GDP and nearly 7% of direct employment in the country in 2018. With revenues hovering around $1 billion, it was then the second largest source of revenue, after gold, for the public treasury. The past is in order, as Uganda's tourism industry is now at half-mast. The cause? The measures taken worldwide to combat Covid-19 as of March 2020. International travel restrictions adopted by governments, especially Western ones, have hit the sector hard. The significant drop in the number of foreign tourists visiting Uganda in 2020 has led to a wave of layoffs and bankruptcies: as of June 2020, an estimated 74.4% of employees and contractors in the sector have lost their jobs. Also hard hit are those who committed their savings in 2019, either to build a hotel or to set up a travel agency, in anticipation of a year 2020 that all the specialists were predicting would be a good one. Since then, tourism actors have multiplied promotional offers (discounts on gorilla tracking, reduction in the price of overnight stays...) and operations to seduce local customers. However, it will take several years before the sector regains its pre-pandemic strength
