Uganda-Direct Economic Involvement

By 1987 the Ugandan government was directly involved in the economy through four institutions. First, it owned a number of parastatals that had operated as private companies before being abandoned by their owners or expropriated by the government. Second, the government operated marketing boards to monitor sales and regulate prices for agricultural producers. Third, the government owned the country's major banks, including the Bank of Uganda and Uganda Commercial Bank (see Banking and Currency , this ch.). And fourth, the government controlled all imports and exports through licensing procedures (see Foreign Trade and Assistance , this ch.).

In July 1988, officials announced that they would sell twenty-two companies that were entirely or partially governmentowned , in an effort to trim government costs and curb runaway inflation. These enterprises included textile mills, vehicle import companies, and iron and gold mines. Officials hoped to sell some of them to private owners and to undertake joint ventures with private companies to continue operating several others. Among the roughly sixty parastatals that would remain in operation after 1989 were several in which the government planned to continue as the sole or majority shareholder. These parastatals included the electric power company, railroads and airlines, and cement and steel manufacturers. Banking and exportimport licensing would remain in government hands, along with a substantial number of the nation's hotels. Retail trade would be managed almost entirely by the private sector. By late 1989, however, efforts to privatize parastatal organizations had just begun, as personal and political rivalries delayed the sale of several lucrative corporations. The International Development Association (IDA) awarded Uganda US$16 million to help improve the efficiency of government-owned enterprises. Funds allocated through this Public Enterprise Project would be used to pay for consultancy services and supplies, and to commission a study of ways to reform public-sector administration.

By the 1980s, more than 3,500 primary marketing cooperative societies serviced most of Uganda's small-scale farmers. These cooperatives purchased crops for marketing and export, and they distributed consumer goods and agricultural inputs, such as seeds and fertilizers. Prices paid by marketing boards for commodities such as coffee, tea, and cotton were fairly stable but often artificially low, and payments were sometimes delayed until several weeks after purchases. Moreover, farmers sometimes complained that marketing boards applied inconsistent standards of quality and that weights and measurements of produce were sometimes faulty. In 1989 the government was attempting to reduce expensive and inefficient intermediary activity in crop marketing, and Museveni urged producers to report buyers who failed to pay for commodities when they were received.

Data as of December 1990