The last country economic memorandum (CEM) for Uganda, was issued in September 1988. Since that time, despite a severe deterioration in the country ' s international terms of trade and the exacerbation of the AIDS pandemic, the Government of Uganda has continued to implement a challenging economic reform program, with support from the World Bank, the IMF and the donor community. This report documents the progress made to date and compliments the Government of Uganda for taking some bold economic decisions. With the restoration of peace and security throughout most of the country, and the improvement in the investment climate, the time is now ripe for the citizens of Uganda to start taking advantage of the new economic environment. While poverty continues to be a serious problem, this report suggests that there is some evidence that, as a result of the policies implemented, the country is slowly on its way towards growing out of poverty. This report cautions, however, that there is little ground for complacency. Reinforcing the recommendations of the 1990 World Development Report, it advocates a growth oriented strategy for poverty reduction and advises the government to stay the course and continue implementing the set of policies which will augment the country's human capital and enable its citizens to participate equitably in that growth.