Uganda’s debt accumulated from the 1970s onwards. Despite large loans, the majority of Ugandans saw little benefits from the money and a few private pockets were the best serviced. As the first country to complete the Heavily Indebted Poor Countries (HIPC) initiative in 2000, Uganda was seen as a flagship for economic growth and good governance. In reality, as the guinea pig of the programme Uganda’s gains were limited and their debt burden only decreased by a negligible amount. It was not until 2006, when the Multilateral Debt Relief Initiative came into force that the benefits were felt with the debt burden falling from US$4.5 billion in 2005 to US$1.1 billion in 2007.
With International Financial Institutions (IFI) encouragement, as conditions of both the loans and debt cancellation, free market policies were implemented in Uganda. This included privatisation and trade liberalisation which gave the advantage to those with corporate interests and the beneficial impacts have not filtered down to wider population. These policies have not been beneficial for sustainable development or poverty reduction.
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