The phrase “You cannot see the forest for the tees” comes in handy at times like these.
Living in Uganda
the tendency is to focus on all that is wrong, especially with the economy. A
cursory look back in history can be a real eye opener.
According to the Bank of Uganda Statistical Abstracts
(2010, 2020, and 2024), Uganda’s economy has changed more in the last fifteen years than in the previous three decades. Anecdotal evidence is that the skyline has grown taller, the roads busier and money moves faster.
Yet beneath the
hum of new malls, banks, and mobile money agents, much of Uganda still bends to
the rhythm of the hoe. That is the paradox of Uganda’s transformation — rapid
growth built on a fragile rural base.
In 2010,
agriculture contributed about 24 percent of GDP, manufacturing under 10
percent, and services nearly half. The typical Ugandan was a smallholder
farmer, working a patch of land, selling surplus in the nearest market, and
depending on rain for survival. Industry revolved around agro-processing —
coffee hulling, sugar milling, breweries, grain grinding and the financial
system barely touched the countryside. Credit was limited, expensive, and
mostly directed toward importers and traders in Kampala.
By 2020, Uganda’s
economy had taken on a new shape. Services had risen above 50 percent of GDP,
manufacturing had expanded to around 15 percent, and agriculture had slipped
slightly below 23 percent. The country was urbanizing fast; mobile money had
turned the phone into a bank, and Kampala’s skyline hinted at a new prosperity.
But beneath the surface, the imbalance persisted. The farms that fed the factories still struggled with low yields, limited financing, and poor access to markets. Credit flowed to real estate, trade, and consumption, while agriculture — employing three-quarters of Ugandans remained underfunded...
By 2024, the
transformation looked complete on paper. Services now contribute more than 55
percent of GDP, manufacturing holds steady between 12 and 15 percent, and
agriculture hovers around 25 percent. GDP has tripled since 2010, and private
sector credit has reached 20 percent of GDP — the highest in the country’s
history. Kampala is busier than ever, real estate booming, and consumption
rising. But three out of every four Ugandans still depend on the land for their
livelihood. Uganda has modernized, yes, but only in patches. Growth has been
faster than transformation.
Nowhere is this clearer
than in agro-industry, the bridge between the farm and the factory. In 2010,
food, beverages, and tobacco made up about a third of all manufacturing. By
2024, their share has dropped to a quarter, even though output has tripled. The
change reflects diversification — Uganda now produces more steel, cement,
plastics, and tiles but also a weakening link between agriculture and industry.
The backbone of our industrial economy, the farm, is still too weak to carry the weight of growth. Factories depend on consistent, quality raw materials, yet agriculture remains largely rain-fed, fragmented, and under-financed. When the rains fail, milk deliveries fall, coffee cherries rot and processors stand idle. Our industrial structure, for all its progress, still rests on soft soil.
Uganda’s next
phase of growth depends on strengthening that foundation.
The farms must
feed the factories. The country cannot industrialize without first revitalizing
agriculture. This means putting knowledge back into the hands of farmers
through functional extension services. For two decades, the collapse of
extension has left millions of farmers without guidance on soil management,
pests, or post-harvest handling. Rebuilding that system supported by digital
tools and field officers could raise productivity across the board.
It also means
investing in water. Less than three percent of Uganda’s arable land is
irrigated, leaving farmers at the mercy of the weather. Climate change has
turned rainfall into roulette, where one bad season can wipe out entire
harvests and cripple agro-processors downstream. More irrigation from
smallholder drip systems to valley dams would stabilize output, smooth supply
chains, and make agriculture a dependable industrial partner.
And it means
facing up to the land question. Uganda’s land tenure system, a web of
overlapping claims and insecure titles, discourages investment. Farmers cannot
use land as collateral, cannot expand production easily, and often hesitate to
make long-term improvements. Simplifying the system while protecting customary
rights would unlock credit and encourage commercial farming. An aggressive titling
drive would be ideal.
Yet even as production improves, Uganda must think carefully about demand. We can’t build a strong industrial base on exports alone. The first market for Ugandan goods must be Ugandans themselves. The numbers are telling we consume less than a tenth of the coffee we produce and process less than 20 percent of the milk we collect. The same pattern holds for fruits, beef, and eggs.
Strengthening
domestic consumption is not only patriotic; it’s strategic. Every cup of
locally roasted coffee, every packet of milk sold in Gulu or Masaka, builds a
stronger base for exports. “Buy Ugandan, Build Uganda” should stop being a
slogan and become a serious industrial policy.
One promising
avenue for this is school feeding. Properly designed, a national school feeding
program could create a guaranteed market for milk, eggs, beef, maize, beans,
and vegetables — stabilizing incomes for farmers and processors alike. It would
also nourish the next generation while driving local production.
But it is a double-edged sword. Uganda’s government has a dreadful record of paying its suppliers on time. Domestic arrears, as this column has warned before, have spiraled out of control, strangling businesses and draining confidence. If school feeding contracts become yet another unpaid promise, they could bankrupt the very processors they were meant to help. To make such programs work, the state must first fix its payment discipline. Otherwise, a well-intentioned idea could collapse under the weight of government debt.
Beyond the
domestic market, Uganda must also push harder to sell its products abroad. The
East African Community has been a good start — our milk, sugar, and grain
already find buyers across the region but it’s not enough. The African Continental
Free Trade Area (AfCFTA) opens a much larger frontier, and beyond that lie the
Middle East, Europe, and Asia. Government must invest in trade diplomacy,
quality standards, and export infrastructure to turn Uganda’s raw produce into
globally competitive brands.
The goal should not be to export coffee beans and bulk milk, but to export roasted coffee, branded dairy, and packaged foods. That’s where jobs and real value lie.
