Institute for Development, University of Nairobi

This paper provides background information necessary for the analysis of a problem revealed in the 1974/7-5 budget speech by the Minister of Finance, Planning and Economic Development; the problem of the rate of growth in the economy having been negative over fiscal year 1973/74. The structure of domestic production is analysed and the foreign sector is integrated in the presentation to give a complete picture of monetary income formation. Critical money income generating sectors are identified with a view to analysing at a later stage the implications of changing growth rates in these micro sectors for variations in the growth rates of aggregates. Finally, the setting of the economy in relation to the other East African economies is presented and in particular, the implications of the extremely low level of foreign reserves in Uganda for inter-territorial monetary relations and commerce are highlighted. We conclude that contrary to the apparent dissention in top community ranks, at the grassroots, co-operation and interdependence is getting strengthened, if only by default.