During the 1960s, revenue from tourism, including restaurants, hotels, and related services, increased faster than any other sector of the economy. In 1971, the peak year for tourist receipts, more than 85,000 foreigners visited Uganda, making tourism the nation's third largest source of foreign exchange, after coffee and cotton. After 1972, however, political instability destroyed the tourist industry. Rebels damaged and looted hotels, decimated wildlife herds, and made many national park roads impassable. Part of the airport at Entebbe was also destroyed.
Recognizing the role tourism could play in economic development, the government assigned high priority to restoring the tourism infrastructure in its RDP. To this end, the government planned to rehabilitate hotels and promote wildlife management. In February 1988, ministry officials announced a plan to build four new hotels worth US$120 million as part of a barter trade agreement with Italy. The Italian company Viginter agreed to construct the 200-room hotels at Masaka, Fort Portal, Jinja, and Mbale. International tourist arrivals gradually increased, from about 32,000 in 1986 to more than 40,000 in each of the next two years. Tourism earned roughly US$4.2 million in 1988. At the same time, continuing unrest in the north halted rehabilitation efforts in Murchison (Kabalega) Falls and Kidepo national parks, and many tourist attractions awaited a reduced climate of violence before maintenance and repairs could be improved.
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