Uganda specialises in agricultural products and has a relatively small secondary sector. In the 1990s, the Ugandan government privatised most of its firms, including banks and railways. Some economists thought this privatisation was unsuccessful because poverty increased and unemployment remained high. In recent years, the Ugandan government has used supply-side policy measures to reduce unemployment.

Mark scheme

Marking points from the official mark scheme (May/June 2022). The mark or mark type is shown in brackets.

1. [1] Privatisation is the sale of state-owned / public sector firms / public sector assets (1)
2. [1] to the private sector / investors / individuals (1).
3. [1] Absolute poverty is a lack of basic necessities (1)
4. [1] e.g., food, clothing or housing / e.g. $1.90 a day (1).
5. [1] Relative poverty is being poor in comparison to other people (in their country) (1)
6. [1] example of a measure such as less than 60% of average income / not able to participate fully in normal activities in their country (1).
7. [1] Understanding of specialisation of a firm / workers become skilled at producing a particular product (1)
8. [1] lower cost of production (1)
9. [1] gain a good reputation / high quality of good or service (1)
10. [1] increase demand (1)
11. [1] increase output (1)
12. [1] raise revenue (1)
13. [1] increase profit (1).
14. [1] May enable firms to gain advantage of economies of scale (1)
15. [1] example (1) become (internationally) competitive (1).
16. [1] Easier to mechanise / improve technology (1)
17. [1] speeds up / faster production / become more efficient (1).
18. [1] education / training / improved skills
19. [1] improve occupational mobility
20. [1] improve productivity
21. [1] increase employment / reduces structural unemployment
22. [1] improved infrastructure
23. [1] improved geographical mobility
24. [1] lower taxes
25. [1] reduce costs for firms
26. [1] increase demand for labour
27. [1] deregulation / reduce bureaucracy
28. [1] encourage firms to expand / set up
29. [1] increase employment.
30. [1] costs / opportunity cost (1)
31. [1] government spending on other areas may fall
32. [1] may increase unemployment in the short-run
33. [1] e.g., if there are new technologies / job losses in declining industries
34. [1] length of time to take effect
35. [1] e.g., education may take a long time to have an impact
36. [1] may not be enough demand for certain skills
37. [1] may not encourage firms to relocate to depressed areas
38. [1] may not be effective if there is low demand
39. [1] may be limited by shortage of workers (1)
40. [1] may be limited by supply of suitable land
41. [1] may be limited by availability of raw materials.