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Uganda

Sekondi Accra

President Yoweri Kaguta Museveni was re-elected on February 18, 2011 and it is no secret that he wants his son, Lieutenant Colonel Kainerugaba Muhoozi, to succeed him in the presidency. Museveni won more than two-thirds of the votes in an election rejected by the opposition as fraudulent. With nearly all the ballots counted, Museveni had 68% of the vote, according the country's electoral commission while his nearest challenger, Kizza Besigye, won 26%. Besigye,leader of the Forum for Democratic Change (FDC), immediately rejected the results, accusing Museveni of bribing voters along with electoral officials while spending large amounts of taxpayers' currency on his campaign fund. The result represents a strong reversal of the trend of declining victory margins for Museveni, and has raised serious questions over the fairness of the election process. On 21 April 2011, a Ugandan court ordered Besigye to be held in custody after he was arrested for attempting to walk to his office in protest at the rising cost of living. Demonstrations have been organized in Uganda to protest rising prices for food and gasoline, after inflation in the country skyrocketed to 11.1% in March 2011, from 6.4% a month earlier. Police have also incarcerated Norbert Mao, the leader of the opposition Democratic Party, (DP) who is being held in prison after his 18 April 2011 arrest for participating in street protests too. The government forbids gatherings of more than five people and restricts licensing of media companies. United States President Barack Obama has criticized Uganda's human rights abuses and its anti-gay policies.

The internal elections within Uganda's leading political parties between July/September 2010 left nearly all of them with injured egos, divided supporters and shady images. The ruling National Resistence Movement (NRM) was no exception, especially as it became the continent's first political party to opt for universal adult suffrage in its primaries. These were tainted by widespread irregularities and malpractice that ignited violence in several parts of the country. Even before the elections, the Uganda's People's Congress, led by former United Nations (UN) diplomat Olara Otunnu, withdrew from the process stating that it did not want to be part of something that would not guarantee a fair and free election. In the ensuing election, citizens expressed dissatisfaction with many of their leaders, voting out incumbent legislators including 17 members of Museveni's cabinet but the NRM's top leadership remained intact.

In April 2010, the governement launched its' National Development Plan (NDP) as the first of six five-year plans focused on transforming the economy. Key goals of the NDP include raising the average per capita annual income from $500 to $900 by 2015 and reducing the portion of people living below the poverty level from 31% to 24.5%, below the Millennium Development Goal target of 28%. It also aspires to double Uganda'a GDP to $32 billion dollars within the next five years, increase the share of manufacturing to 30% of GDP, raise the country's Human Development Index score and improve competitiveness. The government intends to invest heavily in human resource development, improve the quality of infrastructure, promote scientific innovation and facilitate access to productive inputs.

Economic along with political analysts have expressed scepticism about the proposals. To develop the capacity to produce 3,800 megawatts (MW) of electricity, as per the targets, Uganda will need to add 750 MW every year for the next five years. Present output is only 550 MW, with another 250 MW promised by 2012 when the Bujagali Dam begins operations. After the economy grew by 5.8% in 2010, the International Monetary Fund (IMF) forecasts that it will increase by about 6% in 2011 due to strong private consumption and rising government expenditure in the run-up to the 2011 elections. After a 13.9% high in 2009, the inflation rate decreased to 4.4% in early 2010. However, inflationary conditions persist, with agriculture still experiencing unpredictable weather patterns and high fuel prices due to the limited capacity in Mombasa to satisfy East Africa's increased fuel demands. As a result, many of the increased costs are being passed to consumers through higher production and transport prices. The lending rates on shilling-denominated loans decreased from 21.8% in 2009 to 19.6% in 2010, still significantly higher than the East African Community average of about 15%. The government has created the Credit Reference Bureau, which it expects to increase transparency in the banking sector, thereby helping to bring interest rates down further.

Uganda's telecoms sector, which consists of seven entities, is set for a price war over the next year after one of the companies reduced mobile-call rates by 50%. Over the past decade, Uganda had some of the highest cellphone call charging rates in the world. However, an increase in the number of service providers and the introduction of the high-speed fibre-optic cable on the Kenyan coast is leading to a reduction.

With the creation of the East African Community Common Market in July 2010 paving the way for the free movement of capital, labor and services within the five countries in the region, there is likely to be increased competition in Uganda's labor market. About 14% of Ugandans are unemployed or underemployed, and many fear that the opening of borders could further reduce employment opportunities. Where the common market may benefit Uganda is in regional trade. While the country's trade relations with Southern Sudan have been the primary growth area in recent years, new opportunities may open up in Burundi and Rwanda.

The economy should benefit from the planned start of oil production in the last quarter of 2011 despite the financial and technical challenges confronting the leading producer, Tullow Oil. When production starts, yields of over 200,000 barrels per day (bpd) are anticipated from the estimated reserves of 2 billion barrels in the Albertine basin. Uganda will then be able to contemplate its economic ambitions with a greater degree of confidence.

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Uganda maintains an embassy in the United States at 5911 16th Street NW, Washington, DC 20011 (tel. 202-726-7100).
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