Uganda produces and exports raw cotton, an activity it has been involved in since 1903 – that is 120 years.
It earns about 2% of the international market price of the cotton. That is why we are a highly indebted poor country with a nominal per capital income of $1,250.
Mauritius knits and weaves raw cotton into cloth (adds value) & therefore earns about 17% of the international market price.
That is why it is an upper middle income country with a per capital income of $13,000 – ten times higher than Uganda.
France and Italy market high fashion: Louis Vuitton, Dolce & Gabbana, Gucci, Christian Dior, etc. They earn about 65% of the international market price of cotton. That is why they are advanced countries with income per capital of $40,000 each.
Therefore, the journey of development is a process of up-grading from producing and selling low value products to producing and selling high value products. It is a process of changing your position in the global value chain.
