2013 Index of Economic Freedom

Uganda

overall score61.1
world rank79
Rule of Law

Property Rights30.0

Freedom From Corruption24.0

Limited Government

Government Spending84.3

Fiscal Freedom80.6

Regulatory Efficiency

Business Freedom48.4

Labor Freedom87.9

Monetary Freedom77.2

Open Markets

Trade Freedom73.6

Investment Freedom55.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 35.2 million
  • GDP (PPP):
    • $46.4 billion
    • 6.7% growth
    • 7.4% 5-year compound annual growth
    • $1,317 per capita
  • Unemployment:
  • Inflation (CPI):
    • 6.5%
  • FDI Inflow:
    • $792.3 million
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Uganda’s economic freedom score is 61.1, making it the 79th freest economy in the 2013 Index. Its score is 0.8 point lower than last year due to declines in financial freedom, management of government spending, and freedom from corruption that offset improvements in investment freedom and monetary freedom. Uganda is ranked 8th out of 46 countries in the Sub-Saharan Africa region, and its overall score is above the world average.

Uganda’s overall competitiveness continues to be held back by an inefficient business environment and weak public administration. State-controlled enterprises dominate key sectors, perpetuating poor productivity throughout the economy. An opaque regulatory environment and a lack of policies to facilitate trade and investment hinder the emergence of a vibrant private sector.

The judiciary remains inefficient, with private property rights and contract remediation suffering from weak institutional support. Corruption is prevalent, particularly in the energy sector, which dominates much of the economy. Despite export-led growth based on relatively large petroleum reserves, the burdens of engagement with the global economy are difficult.

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Background

Milton Obote led Uganda to independence in 1962, suspended the constitution in 1966, and was ousted in 1971 by Idi Amin Dada. When Tanzanian forces ousted Amin in 1979, Obote returned to power until he was deposed by a military coup in 1986. Insurgent leader Yoweri Museveni took power. A multi-party government was established in 2005. After parliament abolished presidential term limits, Museveni won a third term in 2006 and a fourth in 2011. U.S. Special Forces are assisting the Uganda People’s Defense Force in the hunt for Lord’s Resistance Army leader Joseph Kony. Despite limited market reforms, more than a decade of relatively strong economic growth, and substantial natural resources, Uganda still has not overcome the poverty caused by years of bad economic policy. Agriculture and fishing employ about 80 percent of the workforce. Oil experts estimate that Uganda has 2 billion to 6 billion barrels of recoverable oil.

Rule of LawView Methodology

Property Rights 30.0 Create a Graph using this measurement

Freedom From Corruption 24.0 Create a Graph using this measurement

The rule of law remains weak, and the legal system is too inefficient to provide strong protection of property rights. The issue of land rights and titles is complicated by the existence of four different land tenure systems. The judicial system continues to be subject to delays and political interference. Uganda has the highest bribery levels in East Africa, and corruption is widespread.

Limited GovernmentView Methodology

The top income and corporate tax rates are 30 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden equals 11.7 percent of total domestic income. Government spending has increased to a level equivalent to 22.9 percent of GDP. Budget deficits have been expanding because of expansionary fiscal policy meant to boost infrastructure. Public debt is around 30 percent of total domestic output.

Regulatory EfficiencyView Methodology

Although there is no minimum capital requirement, establishing a business takes more than the world average of 30 days and seven procedures. Completing licensing requirements costs over eight times the level of average annual income and takes more than 100 days. Labor regulations are relatively flexible, but a well-functioning labor market is not fully developed. Inflation has moderated somewhat.

Open MarketsView Methodology

The trade-weighted average tariff rate is relatively high at 8.2 percent, and non-tariff barriers further constrain trade freedom. Although foreign investment is allowed in most sectors of the economy, the investment regime is complex and non-transparent. Access to financial services has expanded gradually across the country, but the development of a modern financial sector has largely stalled in the absence of needed structural reforms.

Country's Score Over Time

Bar Graph of Uganda Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Uganda to other economic country groups

Regional Ranking

rank country overall change
1Mauritius76.9-0.1
2Botswana70.61.0
3Rwanda64.1-0.8
4Cape Verde63.70.2
5Madagascar62-0.4
6South Africa61.8-0.9
7Ghana61.30.6
8Uganda61.1-0.8
9Namibia60.3-1.6
10Burkina Faso59.9-0.7
11The Gambia58.80.0
12Zambia58.70.4
13Tanzania57.90.9
14Gabon57.81.4
15Benin57.61.9
16Swaziland57.20.0
17Mali56.40.6
18Kenya55.9-1.6
19Senegal55.50.1
20Malawi55.3-1.1
21Nigeria55.1-1.2
22Mozambique 55-2.1
23Seychelles54.91.9
24Côte d'Ivoire 54.1-0.2
25Djibouti53.90.0
26Niger53.9-0.4
27Cameroon52.30.5
28Mauritania52.3-0.7
29Guinea51.20.4
30Guinea-Bissau51.11.0
31Central African Republic50.40.1
32Ethiopia49.4-2.6
33Liberia49.30.7
34Burundi490.9
35Togo48.80.5
36Sierra Leone48.3-0.8
37São Tomé and Príncipe 48-2.2
38Lesotho47.91.3
39Comoros47.51.8
40Angola47.30.6
41Chad45.20.4
42Republic of Congo 43.5-0.3
43Equatorial Guinea42.3-0.5
44Democratic Republic of Congo39.6-1.5
45Eritrea36.30.1
46Zimbabwe28.62.3
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