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This report is based on the findings of an economic mission which visited Uganda in August 1981. The first chapter of Part I briefly reviews events prior to liberation in April 1979, events which continue to have a major impact on the Ugandan economy. A discussion of developments since liberation, including the new financial program, is provided in Chapter 2. Chapter 3 outlines the priority areas for further action, and the implications of the balance of payments outlook for aid requirements. Part II is a more detailed review of the problems and issues in five major sectors: agriculture, industry, transport, energy, and education. The coverage of this report is by no means comprehensive, due in part to the incomplete and unreliable data base as well as the World Bank's limited contact with the country over the past decade. Nervertheless, the report tries to identify the major issues facing the country at this time, and outline some of the key components of an effective rehabilitation program.
The objective of the Ugandan government is to make Uganda an upper - middle income country within thirty years. Economic diversification is a key component of that strategy. The country economic memorandum (CEM) report discusses how the emergence of oil and mineral production can contribute to Uganda's effort to promote economic diversification as a means to achieve sustainable and shared growth. Based on the lessons from international experience, the report outlines the elements of a development and diversification strategy, which the Ugandan government may wish to consider in the design of its macroeconomic, fiscal, and sectoral development policies. It then focuses on the set of policies required to maximize the benefits of a diversification strategy in an oil-producing country. Finally it describes a series of actions which the government should plan, and carry out to deal with a number of specific implementation issues. The first part of the report focuses on the importance of economic diversification for Uganda and on the prospects and challenges of oil and mineral development. It addresses the following three issues: (a) why diversification is important for economic development?; (b) where Uganda stands in that area and why it should give a new impetus to its diversification strategy?; and (c) what are the prospects, possible impact, and challenges associated to oil and mining development for Uganda's economy?