2017 Index of Economic Freedom

Uganda

overall score60.9
world rank91
Rule of Law

Property Rights39.3

Government Integrity28.7

Judicial Effectiveness34.6

Government Size

Government Spending91.0

Tax Burden73.7

Fiscal Health78.1

Regulatory Efficiency

Business Freedom42.4

Labor Freedom84.6

Monetary Freedom80.3

Open Markets

Trade Freedom78.3

Investment Freedom60.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 39.2 million
  • GDP (PPP):
    • $79.9 billion
    • 5.0% growth
    • 4.7% 5-year compound annual growth
    • $2,003 per capita
  • Unemployment:
    • 3.6%
  • Inflation (CPI):
    • 5.8%
  • FDI Inflow:
    • $1.1 billion
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The strong commitment to economic liberalization that made Uganda one of the most rapidly developing countries in Africa during the 1980s has noticeably diminished. Bureaucracy and expensive business licensing requirements discourage development of the private sector. Excessive government spending has led to rising debt without any positive impact on growth.

Uganda is currently revising a range of laws and regulations to create greater government accountability, develop infrastructure, and build a more vibrant private sector. In 2016, the government constructed a one-stop border post, reducing border compliance time for exports. However, a weak and inefficient judicial system and pervasive corruption are likely to remain serious impediments to sustainable development.

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Background

President Yoweri Museveni and his National Resistance Movement have ruled Uganda since 1986 when Museveni, at the head of a rebel force, toppled President Tito Okello, who had seized power in a 1985 military coup. In February 2016, Museveni won a fifth term in elections that the international community viewed as tainted by government intimidation. The main opposition leader, Kizza Besigye, was arrested a number of times during the election cycle and later was charged with treason. Uganda has significant natural wealth, including gold, recently discovered oil, and rich agricultural lands from which more than two-thirds of the workforce derives employment.

Rule of LawView Methodology

Property Rights 39.3 Create a Graph using this measurement

Government Integrity 28.7 Create a Graph using this measurement

Judicial Effectiveness 34.6 Create a Graph using this measurement

Property rights are guaranteed by law, but implementation of existing regulations lacks effectiveness and consistency. Businesses and individuals have great difficulty acquiring clear titles to land. Executive and military influence undermines judicial independence. Power is concentrated in the hands of the ruling party, the security forces, and especially the president, who retains office through deeply flawed elections. Corruption is rarely prosecuted.

Government SizeView Methodology

The top individual income tax rate is 40 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax and a property tax. The overall tax burden equals 11.4 percent of total domestic income. Government spending has amounted to 17.3 percent of total output (GDP) over the past three years, and budget deficits have averaged 3.5 percent of GDP. Public debt is equivalent to 35.4 percent of GDP.

Regulatory EfficiencyView Methodology

The overall regulatory framework remains poor. Although there is no minimum capital requirement, establishing a business is costly and time-consuming. Labor regulations are relatively flexible. The government does not subsidize fuel, and lower world oil prices have been passed on to consumers in the form of more economical gasoline and electricity prices.

Open MarketsView Methodology

Trade is moderately important to Uganda’s economy; the value of exports and imports taken together equals 47 percent of GDP. The average applied tariff rate is 5.9 percent. Foreign investors may lease but not own land; otherwise, foreign and domestic investors are generally treated equally under the law. The financial system is dominated by banking, which is increasingly open to competition, and access to financial services has been expanding.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius74.70.0
2Botswana70.1-1.0
3Rwanda67.64.5
4Côte d'Ivoire 633.0
5Namibia62.50.6
6South Africa62.30.4
7Seychelles61.8-0.4
8Swaziland61.11.4
9Uganda60.91.6
10Burkina Faso59.60.5
11Benin59.2-0.1
12Mali58.62.1
13Gabon58.6-0.4
14Tanzania58.60.1
15Madagascar57.4-3.7
16Nigeria57.1-0.4
17Cabo Verde56.9-9.6
18Democratic Republic of Congo56.410.0
19Ghana56.2-6.8
20Guinea-Bissau56.14.3
21Senegal55.9-2.2
22Comoros55.83.4
23Zambia55.8-3.0
24São Tomé and Príncipe 55.4-1.3
25Mauritania54.4-0.4
26Lesotho53.93.3
27Kenya53.5-4.0
28The Gambia53.4-3.7
29Togo53.2-0.4
30Burundi53.2-0.7
31Ethiopia52.71.2
32Sierra Leone52.60.3
33Malawi52.20.4
34Cameroon51.8-2.4
35Central African Republic51.86.6
36Niger50.8-3.5
37Mozambique 49.9-3.3
38Liberia49.1-3.1
39Chad492.7
40Sudan48.8N/A
41Angola48.5-0.4
42Guinea47.6-5.7
43Djibouti46.7-9.3
44Equatorial Guinea451.3
45Zimbabwe445.8
46Eritrea42.2-0.5
47Republic of Congo 40-2.8
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