2021 Index of Economic Freedom

Uganda

OVERALL SCORE58.6
WORLD RANK106
Rule of Law

Property Rights44.8

Judicial Effectiveness36.5

Government Integrity25.0

Government Size

Tax Burden73.2

Government Spending91.6

Fiscal Health63.2

Regulatory Efficiency

Business Freedom44.9

Labor Freedom83.2

Monetary Freedom78.9

Open Markets

Trade Freedom67.4

Investment Freedom55.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 44.3 million
  • GDP (PPP):
    • $118.7 billion
    • 4.9% growth
    • 4.9% 5-year compound annual growth
    • $2,272 per capita
  • Unemployment:
    • 1.8%
  • Inflation (CPI):
    • 2.9%
  • FDI Inflow:
    • $1.3 billion

Uganda’s economic freedom score is 58.6, making its economy the 106th freest in the 2021 Index. Its overall score has decreased by 0.9 point, primarily because of a decline in trade freedom. Uganda is ranked 14th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

Uganda’s economy is in the ranks of the mostly unfree for the third year in a row. The authoritarian and corrupt government is not likely to expand economic freedom enough to achieve its goal of transforming Uganda into an upper-middle-income country by 2040. Institutional capacity remains weak, as reflected by low Index indicator scores for government integrity, judicial effectiveness, and business freedom.

IMPACT OF COVID-19: As of December 1, 2020, 205 deaths had been attributed to the pandemic in Uganda, and the economy was forecast to contract by 0.3 percent for the year.

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Background

The mix of politically and culturally diverse ethnic groups within the former British colony of Uganda complicated governance after independence in 1962. President Yoweri Museveni and his National Resistance Movement have been in power since 1986. In 2016, Museveni won a fifth five-year term in elections that were tainted by government intimidation and multiple arrests of the principal opposition leader. Harassment of other political opponents has intensified amid allegations of creeping authoritarianism. Parliament has amended the constitution several times to allow Museveni to remain in power. Uganda’s significant natural wealth includes 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 44.8 Create a Graph using this measurement

Judicial Effectiveness 36.5 Create a Graph using this measurement

Government Integrity 25.0 Create a Graph using this measurement

Property rights are enforced by the courts, but judgments are often influenced by corruption. Customary land tenure is widespread in northern Uganda, and land disputes, some of which are violent, are common The judiciary is understaffed, inefficient, and subject to undue influence by the executive and the military. Corruption is endemic and often practiced with impunity.

Government SizeView Methodology

The top individual income tax rate is 40 percent, and the top corporate tax rate is 30 percent. Other taxes include value-added and property taxes. The overall tax burden equals 13.5 percent of total domestic income. Government spending has amounted to 16.7 percent of total output (GDP) over the past three years, and budget deficits have averaged 4.6 percent of GDP. Public debt is equivalent to 40.0 percent of GDP.

Regulatory EfficiencyView Methodology

Entry costs for starting a business have increased. President Museveni rejected a minimum wage bill, but most of the labor force is engaged in subsistence-type agriculture in any case. The government continues to subsidize the opaque and sometimes corrupt operations of state-owned enterprises heavily, often by borrowing from China.

Open MarketsView Methodology

Uganda has two preferential trade agreements in force. The trade-weighted average tariff rate is 11.3 percent, and 22 nontariff measures are in effect. Other barriers to trade persist. The recently enacted investment code established a one-stop investment center, but the overall investment framework lacks efficiency and transparency. The underdeveloped financial sector remains subject to state influence, and financial-system inclusiveness is low across the country.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius772.1
2Rwanda68.3-2.6
3Botswana67.6-2.0
4Seychelles66.32.0
5Cabo Verde63.80.2
6Namibia62.61.7
7Côte d'Ivoire61.72.0
8Tanzania61.3-0.4
9South Africa59.70.9
10Benin59.64.4
11Ghana59.2-0.2
12The Gambia58.82.5
13Nigeria58.71.5
14Uganda58.6-0.9
15Gabon58.11.4
16Senegal580.0
17Madagascar57.7-2.8
18Togo57.53.4
19Niger57.32.6
20Guinea56.50.0
21Burkina Faso56.5-0.2
22Djibouti56.23.3
23Mauritania56.10.8
24São Tomé and Príncipe55.9-0.3
25Comoros55.72.0
26Mali55.6-0.3
27Eswatini55.1-0.2
28Kenya54.9-0.4
29Guinea-Bissau54.91.6
30Angola54.22.0
31Lesotho53.5-1.0
32Cameroon53.4-0.2
33Malawi530.2
34Sierra Leone51.73.7
35Ethiopia51.7-1.9
36Mozambique51.61.1
37Republic of Congo50.78.9
38Chad50.40.2
39Zambia50.4-3.1
40Burundi49.90.9
41Equatorial Guinea49.20.9
42Liberia49.20.2
43Democratic Republic of Congo49-0.5
44Central African Republic48.8-1.9
45Eritrea42.33.8
46Zimbabwe39.5-3.6
47Sudan39.1-5.9
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