2016 Index of Economic Freedom

Uganda

overall score59.3
world rank102
Rule of Law

Property Rights25.0

Freedom From Corruption26.0

Limited Government

Government Spending91.5

Fiscal Freedom73.2

Regulatory Efficiency

Business Freedom40.3

Labor Freedom83.7

Monetary Freedom80.1

Open Markets

Trade Freedom72.8

Investment Freedom60.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 38.0 million
  • GDP (PPP):
    • $76.9 billion
    • 4.9% growth
    • 5.2% 5-year compound annual growth
    • $2,023 per capita
  • Unemployment:
    • 3.8%
  • Inflation (CPI):
    • 4.7%
  • FDI Inflow:
    • $1.1 billion
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In the late 1980s, Uganda became one of the first countries in Sub-Saharan Africa to begin liberalizing its economy and introducing pro-market reforms. This effort has stagnated in recent years, however, and despite more than a decade of relatively strong economic growth, the number of impoverished Ugandans has changed little as the population has doubled since 1990.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 59.3 (down 0.4 point)
  • Economic Freedom Status: Mostly Unfree
  • Global Ranking: 102nd
  • Regional Ranking: 13th in Sub-Saharan Africa
  • Notable Successes: Trade Freedom and Monetary Freedom
  • Concerns: Business Freedom and Rule of Law
  • Overall Score Change Since 2012: –2.6

Corruption persists even though laws and institutions are in place to combat it. Enforcement of Uganda’s intellectual property laws to prevent piracy and distribution of counterfeit products is limited. Much of the population works in the informal sector due to a rigid labor market.

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Background

President Yoweri Museveni and his National Resistance Movement have ruled Uganda since 1986 when Museveni, at the head of a rebel force, toppled President Tito Okello, who had seized power in a 1985 military coup. Frustration with Museveni’s long rule has grown, and elections scheduled for 2016 will provide an important test for democracy. Uganda has significant natural wealth, including gold, recently discovered oil, and rich agricultural lands from which more than two-thirds of the workforce derives employment. Uganda continues to play an important regional role in peacekeeping operations in Somalia and in the fight against terrorism, but the U.S. and others have criticized its intervention to prop up the president of South Sudan against rebel forces.

Rule of LawView Methodology

Property Rights 25.0 Create a Graph using this measurement

Freedom From Corruption 26.0 Create a Graph using this measurement

Although Uganda has a variety of laws and institutions tasked with combating corruption, enforcement is very ineffective. The country’s fiscal deficit is due in part to weak control of public spending. Despite recent high-profile scandals and anti-corruption campaigns, no top government official has been imprisoned for corruption. The rule of law is weak. Up to 90 percent of all landowners lack registered title to their property.

Limited GovernmentView Methodology

The top individual income tax rate is 40 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax and a property tax. The overall tax burden equals 13.4 percent of total domestic income. Government spending has decreased to a level equivalent to 16.8 percent of GDP. Budget deficits have been expanding, and public debt is around 30 percent of total annual output.

Regulatory EfficiencyView Methodology

There is no minimum capital requirement, but establishing a business still takes more than 30 days. Completing licensing requirements costs over eight times the average annual income. A functioning labor market is not fully developed. The Uganda shilling’s depreciation against the dollar in 2014–2015, coupled with increased public debt and expanded spending in advance of the 2016 elections, is likely to drive up inflation.

Open MarketsView Methodology

Uganda’s average tariff rate is 8.6 percent. Foreign investors may lease but not own land. The government may not expropriate property without providing compensation. Regulatory barriers may discourage investment. Access to financial services has expanded gradually across the country, but the development of a modern financial sector has largely stalled in the absence of needed structural reforms.

Country's Score Over Time

Bar Graph of Uganda Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Uganda to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Mauritius74.7-1.7
2Botswana71.11.3
3Cabo Verde66.50.1
4Rwanda63.1-1.7
5Ghana630.0
6Seychelles62.24.7
7South Africa61.9-0.7
8Namibia61.92.3
9Madagascar61.1-0.6
10Côte d'Ivoire 601.5
11Swaziland59.7-0.2
12Benin59.30.5
13Uganda59.3-0.4
14Burkina Faso59.10.5
15Gabon590.7
16Zambia58.80.1
17Tanzania58.51.0
18Senegal58.10.3
19Kenya57.51.9
20Nigeria57.51.9
21The Gambia57.1-0.4
22São Tomé and Príncipe 56.73.4
23Mali56.50.1
24Djibouti56-1.5
25Mauritania54.81.5
26Niger54.3-0.3
27Cameroon54.22.3
28Burundi53.90.2
29Togo53.60.6
30Guinea53.31.2
31Mozambique 53.2-1.6
32Comoros52.40.3
33Sierra Leone52.30.6
34Liberia52.2-0.5
35Guinea-Bissau51.8-0.2
36Malawi51.8-3.0
37Ethiopia51.50.0
38Lesotho50.61.0
39Angola48.91.0
40Democratic Republic of Congo46.41.4
41Chad46.30.4
42Central African Republic45.2-0.7
43Equatorial Guinea43.73.3
44Republic of Congo 42.80.1
45Eritrea42.73.8
46Zimbabwe38.20.6
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