Uganda's manufacturing industry was severely affected by the political instability of the 1970s and 1980s. Amin's expulsion of Asians and the flight of many educated and trained workers left the nation's industries with a shortage of competent and skilled workers. In addition, industries suffered from lack of investment, inadequate raw materials, decaying infrastructure, poor marketing structure, and obsolete equipment. During Amin's regime many industries operated at 15% to 30% of capacity.[1]

Industrial growth has been a high national priority since the late 1980s. The government's initial goal was to decrease Uganda's dependence on imported manufactured goods by rehabilitating existing enterprises. These efforts met with some success, and in 1988 and 1989, industrial output grew by more than 25%, with much of this increase in the manufacturing sector. Among industry's most serious problems were capital shortages, the need for skilled workers and experienced managers. Engineers and repairmen were in particular demand, and government planners sought ways to gear vocational training toward these needs.

In the late 1980s, the government began to convert some nationalized manufacturing enterprises to private ownership in order to encourage private investment. Its primary aims were to promote self-sufficiency in consumer goods and to strengthen linkages between agriculture and industry. By 1989 government estimates put manufacturing output at only about one third of the post-independence peak levels of 1970 and 1971. Only eleven out of eighty-two manufacturing establishments surveyed by the Ministry of Planning and Economic Development were operating at more than 35% capacity. Nonetheless, overall industrial output increased between January 1986 and June 1989, and the contribution from manufacturing increased from only 5% to more than 11 % during the same period.

In 1989 the government estimated that the nation's four textile mills manufactured about 8 million meters of cotton cloth annually, but Uganda's growing population required at least ten times this amount to attain self-sufficiency. The government began modernizing three other mills for weaving and spinning operations, and the United Garment Industries commissioned a plant to manufacture knitted apparel, some of it for export, with the aid of a US$3 million rehabilitation loan.

The production of beverages, including alcoholic beverages and soft drinks, increased in the late 1980s, and officials believed that Uganda could achieve self-sufficiency in this area in the next decade. In 1987 three breweries increased their production by an average of 100 %, to a total of more than 16 million liters. In the same year, five soft drink producers increased production by 15% to nearly 6 million liters. The Lake Victoria Bottling Company, producers of Pepsi Cola, also completed construction of a new plant at Nakawa.Because sugar production is vital to the soft drink industry, rehabilitating the sugar industry would help Uganda attain self-sufficiency in beverage production. The government hoped to reduce sugar imports from Cuba by resuming production at the Lugazi and Kakira estates in 1989 and 1990. In 1988 and 1989, Uganda relied on imports of dried milk powder and butter to produce milk for sale to the general public. Processed milk, produced under monopoly by the government-owned Uganda Dairy Corporation, registered an increase of 29.5 %, from 13 million liters in 1986 to 16.9 million liters in 1987. To improve the local dairy industry, the government rehabilitated milk-cooling and collection centers, processing plants, and vehicles used in the industry.

Production of wheat and corn flour increased in the late 1980's, despite continuing low-capacity production. Only one establishment produced wheat flour, namely the Uganda Millers, which worked at just over 20 % of capacity. This constituted an increased production of 32 % more than the previous year. At the same time, corn production increased 87.3 % in 1987, to 4.6 thousand tons.In 1988, only one cigarette-manufacturing plant, the British American Tobacco

Company, operated in Uganda. Its production increased slightly between 1986 and 1987 to 1,434.8 million cigarettes. In 1988 the government provided a loan of US$1.43 million to rehabilitate the company's tobacco redrying plant in Kampala.The Uganda Leather and Tanning Industry, the nation's only leather producer, operated at less than 5% of capacity in 1987. This represented a drop in output of nearly 40% from the previous year. Although three footwear producers were in operation, the Uganda Bata Shoe Company produced 98% of the nation's shoes, increasing production in 1988 and 1989.

In the late 1980s eight companies produced steel products in Uganda, but were operating at only about 20% of capacity, despite increased output after 1986. The most widely used products were gardening hoes and corrugated sheets of galvanized steel. The production of steel sheets declined dramatically in 1987, leaving some factories operating at only 5% of capacity. At the same time, hoe production increased 30% over 1986 levels. The government attempted to resuscitate the industry in 1987 by assessing the availability of scrap iron and the demand for steel products and by providing US$2.7 million in machinery and equipment for use by the government-operated East African Steel Corporation.The nation's two cement producing plants at Hoima and Tororo, both operated by the Uganda Cement Industry, also cut production sharply, from more than 76,000 tons of cement in 1986 to less than 16,000 tons in 1988. Neither plant operated at more than 5% of capacity during this time. The government again provided funds, roughly US$3.2 million, for rehabilitating the industry and initiated a study of ways to improve this potentially vital sector of the economy.[2]

[1] Kurian, George Thomas 1992. Encyclopedia of the Third World , fourth edition, volume III, Facts on File: New York, N.Y., pp. 2009-2011.

[2] Source: Byrnes, Rita M. (ed.) 1992. Uganda A Country Study , Library of Congress: Washington D.C. p. 123