Date of Submission: 26 April 2012
When President Yoweri Musevini came to power in Uganda in 1986, his government faced the challenge of rebuilding an economy devastated by the dictatorships of Idi Amin and Milton Obote. Between 1971 and 1986, the Ugandan economy deteriorated. But in the ten years that followed (between 1986-1996), per capita GDP grew by roughly 40%. The IMF first became involved in Uganda in 1987, with a loan through its Structural Adjustment Facility (SAF), and it later extended its mission under the ESAF program from 1989-1992 and again from 1992-1997. Real per capita GDP growth averaged 4.2% in Uganda between 1992-1997, and as a result, the IMF often presents Uganda as an example of the success of its structural adjustment policies. As noted in the External Review, part of this rapid growth can be explained by the terrible decline of preceding years. But it is also worth looking at how various sectors of the population fared under the growth that coincided with structural adjustment in Uganda.TuralDdjust
Impact on the Economy
Two principal reforms mandated by the IMF arrangements were trade liberalization and the progressive reduction of export taxation. But as the external review points out, "Liberalization of cash crops had only limited beneficiaries." This was the case because only a small number of rural households grow coffee. Liberalization had little impact on rural incomes over the period of adjustment- rural per capita private incomes increased just 4% over the period from 1988/89 to 1994/95.(39) The IMF also mandated the privatization of state-owned industries, a process that has met particular criticism in Uganda. The Structural Adjustment Participatory Review International Network (SAPRIN), which was launched jointly with the World Bank, national governments, and Northern and Southern NGOs in...