Negative Effects

Inefficiency is often common in smallscale industrial enterprises. This could be due to inadequate economies of scale.

Industries that are agro-based tend to be affected by natural factors.

The above structure of industries in Uganda implies industries' dependence the imported raw materials and capital.

Rural urban migration could result, since most industries are concentrated urban areas.

Environmental degradation and pollution are likely to occur due to concentration of industries in certain areas.

Since most industries are labour intensive, low output and high costs on labour are likely.

Ownership of some industries by foreigners would imply profit repatriation and hence capital outflow.

Uganda's industries tend to be localized. This could lead to unbalanced regional development.

The inadequate levels of technology lead to the production of poor quality products and this could result into limited market for manufactured products in the domestic market.

Most medium and large-scale industries under foreign ownership could result into foreign domination of Uganda's economy.

Industrial production activities in Uganda are small, and hence limited employment prospects.

Uganda's industries are mainly agro-based, and yet agriculture is prone natural calamities e.g. pests and diseases, drought, etc. This could lead fluctuations in the volume of output.

Dependence on outside economies is likely, since some industrial activities tend to depend on imported inputs, skills, capital, technology, etc.

Most industries operate at excess capacity resource utilization. This could breed inefficiency because of poor management.

The dependence by some industries, could result into weak linkages among the domestic sectors of the economy leading to small multiplier effects.