Geography of Uganda

Uganda is a land locked country found on the equator in east Africa. It has a tropical climate
that produces average temperatures of 29*C and average rainfall of 100cm. The country
experiences annual tropical wet season where the majority of the rainfall occurs. Uganda lies
low at 1100 meters above sea level on average, though shares Mount Elgon with Kenya. It
also shares Lake Victoria the largest lake in Africa- with Tanzania and Kenya. The source of
the River Nile is found in Uganda. It flows for 130 kilometres through the country
northwards and through to South Sudan.
Uganda are rich in raw materials such as copper, cobalt, salt, limestone and gold.

Demographic of Uganda
Uganda has 10 major ethnic groups and many more smaller groups as with many African
countries, due to the boarders being drawn without the consideration of the many ethnic
groups. In 2010 Uganda had a population of 33.425 million people and is increasing at a rate
of 1,000,000 people per year, 49% of which are under 15 and only 2.5% are over 65 years.
The death rate on average is 13.2 per 100 people per year. The birth rate is 46.3 per 1000
people per year. The population rise is likely to lead to greater strains on the already fragile
infrastructure in the country. As things are, the country cannot support the current
population. Uganda's youthful population is one of the youngest in the world. This is a result
of high birth rate, a falling infant mortality rate and a high death rate. High birth rates are
common in developing countries where a lot of families are subsistence farmers. Having a
large family to work the land is essential as a large family would benefit from increasing
returns to scale. The high death rate and infant mortality rate also contributes to people
wanting many children as the likelihood of a child dying is higher than in a more
economically developed country like the UK where the birth rate is 12.26 per 1000 people.
The youthful population accounts for the increasingly expanding labour force. The increase
in labour produce a doubling of the labour force in the next 30 years. Unless the rate of job
creation can keep up with the supply of labour, the rate of unemployment will continue to
rise and the costs to the government in terms of social welfare will also continue to rise.
The life expectancy at birth is 56 years which is 24 years lower than the UK and 11.88 years
lower than the worldwide average. The current life expectancy is the highest its ever been in
Uganda, which is a result of improving health infrastructure and medicinal imports.
The two main religions in Uganda are Catholicism (41.9%) and Anglican(35.9%).

History
The British became a protectorate of Uganda in 1894 following the 'Scramble for Africa'
which saw most of Africa subdivided into colonies. The British invested heavily into
infrastructure in the country and most of there colonies to develop the trade routes
through Kenya and Uganda, such as the East African railway, and hold greater trade power in
the region that included the German East African colonies and the Belgium Congo.
Uganda, under the British rule, grew wealthy as the British introduced cotton which was
grown by the local farmers. Uganda gained independence from the British in 1962 and there
are still remnants of that period such as democratic

Following independence, Uganda experienced instability. The first President of Uganda was
Milton Obote. His time in power between April 1966 and January 1971, and later in
December 1980 and July 1985 is known for the widespread corruption, food shortages and
rapid increases in food prices and the persecution of Indian traders who had previously held
monopolies under British rule. There were many coups against the government. The most
notable being the Idi Amin coup of 1971. He led the Ugandan army against the president and
seized control. Between 1971-1979 up to 800,000 Ugandans where killed. Farmsteads where
burned to the ground and livestock were killed as part of a plan to terrorise civilians into
submission. Idi Amin also expelled up to 80,000 Ugandan-Asians. Many Asians owned
lucrative businesses in the country. When they left, they left behind those businesses and
positions that they held in government and the economy suffered as a result. Those
businesses where run into the ground by miss-management and inefficiency. The
manufacturing industries suffered from poor maintenance and neglect and output was
drastically reduced. This is shown in income per person in 1971 compared with 1979, the
period in which Idi Amin was in power. In 1971 GDP per capita was $964 per person per
year. In 1979 it fell to $676 per person per year.
Uganda started using there own currency, the Ugandan shilling, after the collapse of the East
African Currency Board. Before that, Uganda has been using other currency. The Bank of
Uganda was established in 1966. Uganda's Currency has changed seven times since 1966.
The 1966, 1973, 1979, 1983 and 1986 changes were due to changes in regimes. The 1987
issue has been updated to stop counterfeiters.


HIV/AIDs
HIV/AIDs has been a major cause of deaths in Africa. Uganda where one of the most
effective of any country in Africa to respond to the HIV/AID's epidemic. During the 1980's
almost 80% of Ugandans had the HIV virus and by 2008 this had fallen to 6.8%. The Ugandan
government where proactive in their approach compared with South Africa which, under
president Thabo Mbeki, denied the link between HIV and AIDs. Life expectancy fell from 50,
in 1980, to 45 in the mid 1990's.
Soon after the current president of Uganda Museveni came into power In 1986, he push for
a campaign of prevention of the spread of HIV. The policy 'ABC' aimed at educating the
population of what caused HIV so that they could make more informed decisions. This policy
would be less costly in the long term rather than focusing on curing. The policy consists of
Abstinence, Be faithful and Condoms and was hugely successful in reducing the prevalence
rate in Uganda.
The spread of HIV had widespread impacts on economic growth. The country had an adult
prevalence rate of nearly 14% in 1991 People affected by HIV will be unable to work and
this would lead to a fall in the labour supply. This would cause the cost of labour to rise as
labour becomes increasingly scarce. The effect of rising wages could be passed onto the
consumer in higher prices or with businesses employing fewer workers or even reducing
output to reduce the costs of production. The epidemic left 1.2 million children orphaned
and so they were left to be cared for by their grandparents. The total tax base fell during the
mid 1990's as the HIV/AID's virus killed of much of the adult population. This reduced the
governments ability to affect the spread of the disease, such as health care infrastructure, as
the governments revenue fell. This meant more of the burden fell on the governments
ability to gain aid from the World Health Organisation and other non governmental
organisations. The prevalence of HIV also put increasing pressures on the health
infrastructure in the country which increased public expenditure. The effect of an increasing
public expenditure and falling revenue meant that the fiscal deficit was rising and economic
growth was slow during the early years of Museveni's time in power. Studies have also
shown that there is a correlation between a country with decreasing life expectancy and
also decreasing GDP rates. There has also been predications of economic growth trajectories
of several sub-Saharan African countries and that shows that HIV/AIDs will have the effect of
reducing economic growth between 0.56 and 1.47% between 1990 and 2025.

Poverty
Uganda is one of the poorest nations in the world. It is ranked 161st, out of 187 countries, in
the world in the Human Development Index. Almost 37% of the population are living in
extreme poverty at less than $1.25 a day. This figure has fallen from 70% in 1992. The
amount of people living in poverty (less than $2 a day) has also fallen considerably from 89%
in 1992 to 65% in 2009. The overall number of people living in poverty has increased due to
population growth. The poorest regions in Uganda are found in the northern part of the
country. The north is dominated by remote tribes.
Around 85% of Ugandans live In rural areas. 27% of these live below the national poverty
line. Most people who live in rural regions are subsistence farmers or rely on agriculture for
their incomes. These small scale farmers are spread out in remote areas and so the full
effect of economic growth will be harder to reach them. They lack the ability to access
financial services which would enable them to expand their productive capabilities. The
majority of the poor in the country live in dry, semi-arid conditions where growing crops is
limited to the seasonality of the rainfall. In these regions, the population is most vulnerable
to the effects of climate change. As the climate becomes increasingly extreme, the amount
of people who are affected will rise in the future.
Northern Uganda was particularly affected by the 2011 East African Drought in which east
Africa experienced the worst drought in 60 years. This drought had wide reaching effects on
the rest of Uganda as roughly 1.2 million Ugandans where affected. Inflation, caused by food
shortages, rose to a all time high of 30.5% in October 2011.

HIV/AIDs has severely affected the poor of Uganda where a large number of adults died
from the disease and left around 1.2 million children orphaned and without any form of
income. The rapid growth of the population also has contributed to the restriction of people
from getting out of poverty.
There has also been rapid rural to urban migration in Uganda. Between 2002 and 2010 the
urban population grew by 5.6 % compared with the rural population growing by 3.4%. This
has exacerbated the urban poverty problem as people began to build illegal settlements on
the outskirts of major cities such as the Katanga slum in Kampala, the capital city. People
move from rural areas to towns and cities In search of a higher standard of living. But most
will end up in the slums as the supply of labour outstrips demand. The percentage of urban
poverty will continue to rise if job creation cannot keep up with the rate of urbanisation.

Economy
The Ugandan economic output in 2012 was $20.96 billion. It has a GDP per capita of $1,415
which is the 205th highest in the world. The most important sector of the economy is
agriculture as it employs 80% of the labour force. However the majority of this sector is
dominated by the poor who are subsistence farmers. The manufacturing industry employs
5% and services employs 13%.
The agricultural industry is the most vulnerable of the industries as its heavily dependent
on the climate. Extreme variations in the climate such as drought or flooding will limit output
and can cause food prices to rise. Currently the government are focusing efforts in trying to
modernise agriculture by increasing mechanisation. This will allow the agriculture sector to
become more efficient and to benefit from increasing returns to scale. The effect of this
would be structural unemployment as the economy begins to move away from agriculture.
Modernising the agriculture industry will also reduce its vulnerability to changes in climate,
as production can remain relatively constant. Although agriculture employs 80% of the
population, it contributes to only 23.5% to total GDP. This highlights that the sector is in
need of modernisation to improve its efficiency. Manufacturing accounts for 26.5% to total
GDP whilst services contributes the most with 49.3%. Services and Manufacturing have both
been increasing their proportion of GDP in last 10 years whilst agriculture has been
declining. The service sector is also shown to have contributed the most to economic growth
whilst agriculture has contributed the least, which suggests that the key to economic growth
is with the service sector.
Uganda are rich In natural resources which include, rich fertile soils, a regular rainfall,
deposits of minerals such as copper and gold. Oil reserves has also been recently discovered
estimated to be up to 3.5 billion barrels .
In 2012 Uganda's budget deficit stood at -2.9% of GDP. Public expenditure in the same year
was $3.7 billion and government revenue came to $3 billion. The national debt level
reached 23.6% of GDP in 2012.
The relative political and economic stability of Uganda since 1986 has made the
environment for investing more attractive to foreign investors. Foreign direct investment
was $1.7 billion in 2013 which rose by 92% on the previous year, making Uganda the highest
recipient of FDI out of its regional rivals in east Africa. China alone invested $610 million in
2013 into the Ugandan economy. Around 7,000 Chinese live in Uganda while 256 Chinese
owned businesses are also based there which helps boost trade through increased face to
face interaction. Chinese investment in Uganda is estimated to have created 28,000 new
jobs. This was all achieved by currency reform, raising producer prices on export crops,
increasing prices of petroleum products, and improving public sector wages. The policy
changes were aimed at reducing inflation and boosting production and exports. Since 1990
economic reforms allowed for continued economic growth based on sustained investment
on infrastructure, improved incentives for production and exports, lower inflation, better
domestic security, and the return of exiled Indian-Ugandan entrepreneurs.
Tourism in Uganda is a large source of employment and investment which contributed $1.88
billion in 2013. Tourism has created jobs for many of the rural population and injected a flow
of money into local remote communities. During the British rule, the tourism industry
attracted 100,000 visitors per year. It then became non existent during the 1970s and 1980s
due to instability.
Corruption is a widespread problem in Africa and is particular problem in Uganda where its
rated as the 140th worst in the Corruption Perceptions index, falling from 130th. Corruption
leads to the reduced national wealth as money is spent on unnecessary high cost projects
at the expense of much needed infrastructure such as schools, hospitals and roads. The
misallocation of resources stunts economic growth as productivity is low. Corruption can
also lead to higher costs of goods and services as unhealthy competition deters
competition. Large scale corruption will also lead to a widening of the distribution of wealth.
Imports have been growing faster than exports resulting in a trade deficit. Uganda imports
consist mostly of vehicles, petroleum and medical supplies which totals to $5.1 billion in
2012 up from $4.9 billion from the previous year. Exports consists of Coffee- which
contributed towards $30 million of Uganda's total exports-fish, tea, cotton and gold.
Instability in the during the 1970's and 1980's caused much of the exporting industry to
collapse. An example of this is the Sugar industry which produced 152,000 tons of sugar in
1968. By 1989 Uganda imported large amounts of sugar even though the local industry had
the capacity to produce enough to meet the domestic demand. Sugar is the most profitable
crop in Uganda. Exports made $2.8 billion in 2012, up from $2.5 million in 2011.
The trade deficit would be sustainable if the goods that were imported where used in the
process of production. However most of the imports are finished product consumer goods
such as cereals which is the third highest amount of imported good. The reduction of tariffs
has been In line with the governments open trade policy which attempts to make the
economy more competitive with its east African rivals.
Uganda is a member of the East African Community that shares a common market for goods,
labour and capital. There are plans to create a common currency and a political union within
the next 10 years.

Future of the Economy

Uganda is vulnerable to changes in the price of oil as it imports most of its oil from Kenya
who import the crude oil from abroad to refine in Mombasa. The Ugandan government
began to look for domestic sources of oil due to the rising oil prices. In July 2007, potentially
600 million barrels of crude oil was found under Lake Albert on the border with the D.R.C.
Uganda potentially now have oil reserves of 3.5 billion barrels which would make Uganda
the 4th highest producer of oil in sub Saharan Africa. However tensions have risen on the
border with the D.R.C which threatens instability as both countries want to clarify the
borders so that it favours their side. These oil reserves will give Uganda comparative
advantage in oil production that could speed up economic growth In the long term as
exports are boosted. As the demand for the Ugandan shilling rises, the costs of imports will
begin to fall which would increase the quantity of foreign imports. The knock on effect will
be higher standards of living which will help lift people out of extreme poverty.

A major untapped resource in Uganda is hydroelectric power. Much of the White Nile runs
through the country and there is great potential for it to be harnessed. The Owen Falls Dam
was built in 1954 and supplied energy to Tanzania and Kenya. During the 1970's and 1980's
the dam was poorly maintained and 6 out of the 10 generators broke down by 1988. In 2000
repairs and extensions where made to increase its output to 380 Megawatts. Uganda is a
major energy producer in East Africa, and further investment in hydroelectric power could
see it become a major export in the future.