What factors tend to limit the size of Uganda’s Gross Domestic Product (GDP)

Note

GDP is the measure of flow of goods and services produced within the country irrespective of who produces them. It includes output produced in the country by both nationals (residents) and foreigners (foreign investors and expatriates) in a period of time usually a year.

Or

GDP is the total money value of goods and services produced by nationals  and foreigners within the country in a given time period usually a year

Causes of low GDP

• Inadequate skilled manpower leads the country to operate below capacity resulting in limited GDP.
• Limited domestic consumer market limits productivity leading to low level of GDP
• Low technology leads to low productivity of good of low quality
• Limited political will toward industrialization, often government allocate little resource in development of infrastructures leading industrial development
• Lack of independence: Uganda still relies on foreign economies for her development projects which do not favor industrialization as aid given is tied to other expenditure, hence this limits the size of GDP.
• There is inadequate financial capital to invest in industrial projects to widen the size of GDP. Most people do not have access to financial credit especially in form of foreign exchange for importation of capital assets and basic raw materials for industrialization.
• Low levels of entrepreneurship and management skills limit production leading to low level of GDP
• Limited forward and backward linkages between different sectors in the country such as industries and agriculture
• Natural factors such unfavorable climate limits agricultural output – the major employer, leading to low GDP.
• Massive profit repatriation leads to limited growth and expansion of industries.
• Political insecurity discourage foreign investment in the country.