A.I.D. economic policy reform program in Uganda

initiated a program to lessen Uganda"s almost complete dependence on coffee by promoting nontraditional exports. The program, which included a Commodity Import Program (CIP), complementary technical assistance, and P.L. 480 assistance, supported policy measures to: (1) issue simultaneous export/import licenses for exporters of nontraditional commodities; (2) allow exporters to hold foreign exchange; (3) streamline procedures and reduce costs for obtaining export and import licenses and for using air cargo to export perishables. The program, according to this mid-term impact evaluation, is well on its way to achieving objectives. The value and volume of nontraditional exports have risen at least fivefold, mainly in agricultural staples, which require relatively simple marketing and transport arrangements and a knowledge and technology base already available. Increases in exports of fresh fruits and vegetables have not been as dramatic because their special production, infrastructure, and marketing requirements remain inadequately developed. Other key factors in the program"s success have included rehabilitation of major roads; active policy dialogue with the host government and other donors; an indigenous capacity for policy reform; and a strategy of demonstrating immediate benefits and focusing on limited, manageable policy changes. On the negative side, collection and monitoring of baseline data, so necessary for measuring program achievements, were inadequately developed; foreign exchange subsidies, though initially helpful in stimulating the nontraditional sector, in effect provided windfall profits to some importers; and the USAID Mission"s decision to choose beneficiary firms on a case-by-case basis also resulted in windfall profits for some firms. A key lesson learned is that in Uganda, program success depends on well-conceived policies, not on the type of assistance.