Contribution of coffee sub sector to the economic growth of Uganda

Abstract

The demand for coffee has increased since the 1980s due to rapid domestic population growth and the emergence of an export market for especially the Robusta coffee which has increasingly earned the coffee producers on the local and international market; and thus its contribution to Gross Domestic Product has to be looked at with utmost importance. In the fifteen years from 1985 to 2010, annual soluble exports from coffee producing countries have increased fivefold, from 63000 to 332000 tons. Coffee accounts for the majority of export revenues while agriculture employs more than 80% of the country work force, contributing 17.7% of the total national export value in 2013/14. Uganda’s coffee export earns about $413 million which has contributed the total exports in 2016 amounting to $6.12B making it the 126th largest exporter in the world. The coffee sector has contributed 6.76% of the total earnings from the exports and this contributed highly to the GDP of the country. It is against this background that the researcher sought to examine the contribution of the coffee sector to the GDP of Uganda’s economy. 1.4 OBJECTIVES 1.4.1 GENERAL OBJECTIVE The main objective of this study is to analyze the contribution of the Coffee sector to the GDP of Uganda’s economy. 1.4.2 SPECIFIC OBJECTIVES Specifically, the study seeks: - (i) To study the trend of the coffee production and portray clearly the inconsistencies in its contribution to the Gross Domestic Product of Uganda. (ii) To analyze and illustrate the long run relationship between coffee production and the Uganda’s Gross Domestic Product. (iii)To assess the influence of coffee sector to the country’s GDP and its influence on the economic growth of Uganda.