History of Uganda Development Corporation
The Uganda Development Corporation (UDC) was first established in June 1952 by an Act of Parliament Cap. 326 of the laws of Uganda, to promote industrial and economic development in Uganda. Its main objectives were to facilitate financing, management, or establishment of new ventures; improve the organization and modernization of existing projects; and conduct research into Uganda’s industrial and mineral potential.
Initially, UDC was capitalized at £5,000,000 (equivalent to £140,000,000 in 2019) and began its operations with Tororo Cement Factory, the Uganda Fish Marketing Corporation, and the Lake Victoria Hotel. From the 1960s to the 1970s, the Government largely financed industrial development activities through UDC, which consistently turned profits each year, using them to fund expansion and support subsidiaries and other entrepreneurs in establishing and growing small enterprises.
By 1970, UDC had become the engine of growth with 38 subsidiaries and 19 associated companies, including Lira Spinning Mills, Uganda Hotels, Nyanza Textiles, Uganda Garment Industry, Agricultural Enterprises, Kilembe Mines, Uganda Meat Packers, Uganda Fish Marketing Corporation (1969) Limited (TUFMAC), Tororo Industrial Chemicals & Fertilizers Ltd (TICAF), The Uganda Metal Products and Enameling Company Limited (TUMPECO), Uganda Consolidated Properties, Tororo Industrial Chemicals and Fertilizers, and Uganda Cement Industry. UDC was estimated to have employed about 24,000 people and contributed approximately 33% of the country’s total revenue.
However, the progress was slowed down due to significant political instability and economic difficulties that Uganda faced in the 1970s. The turbulent political climate led to disruptions in industrial projects and challenges in managing state-owned enterprises. UDC thus faced difficulties in managing and maintaining its assets, resulting in a slowdown in the corporation’s growth and development activities.
In response to the economic challenges and shifts in government policy, UDC underwent restructuring in the 1980s and 1990s. This period saw a significant push towards privatization in Uganda, a process that led to virtually all the investments of UDC being divested, and the Corporation eventually winding up in 1998.
The initial success of privatization and liberalization policies diminished over time, as the private sector alone was unable to drive business and productive activities at the scale needed for Uganda to become a Middle-Income country by 2040. This led to insufficient investment in crucial sectors key to Uganda’s social and economic transformation. In light of this, the Uganda Development Corporation (UDC) was revitalized through the Uganda Development Corporation
Act of 2016 to play a crucial role in driving industrialization, generating employment opportunities, and bolstering the nation’s economic strength through strategic investments.