Two issues continued to create grievance through the 1930s and 1940s. The colonial government strictly regulated the buying and processing of cash crops, setting prices and reserving the role of intermediary for Asians, who were thought to be more efficient. The British and Asians firmly repelled African attempts to break into cotton ginning. In addition, on the Asian- owned sugar plantations established in the 1920s, labour for sugarcane and other cash crops was increasingly provided by migrants from peripheral areas of Uganda and even from outside Uganda.

In 1949 discontented Baganda rioted and burned down the houses of pro government chiefs. The rioters had three demands: the right to bypass government price controls on the export sales of cotton, the removal of the Asian monopoly over cotton ginning, and the right to have their own representatives in local government replace chiefs appointed by the British. They were critical as well of the young kabaka, Frederick Walugembe Mutesa II (also known as Kabaka Freddie), for his inattention to the needs of his people. The British governor, Sir John Hall, regarded the riots as the work of communist-inspired agitators and rejected the suggested reforms.

Far from leading the people into confrontation, Uganda's would-be agitators were slow to respond to popular discontent. Nevertheless, the Uganda African Farmers Union, founded by I.K. Musazi in 1947, was blamed for the riots and was banned by the British. Musazi's Uganda National Congress replaced the farmers union in 1952, but because the congress remained a casual discussion group more than an organized political party, it stagnated and came to an end just two years after its inception.

Meanwhile, the British began to move ahead of the Ugandans in preparing for independence. The effects of Britain's post war withdrawal from India, the march of nationalism in West Africa, and a more liberal philosophy in the Colonial Office geared toward future self-rule all began to be felt in Uganda. The embodiment of these issues arrived in 1952 in the person of a new and energetic reformist governor, Sir Andrew Cohen (formerly undersecretary for African affairs in the Colonial Office). Cohen set about preparing Uganda for independence. On the economic side, he removed obstacles to African cotton ginning, rescinded price discrimination against African-grown coffee, encouraged cooperatives, and established the Uganda Development Corporation to promote and finance new projects. On the political side, he reorganized the Legislative Council, which had consisted of an unrepresentative selection of interest groups heavily favouring the European community, to include African representatives elected from districts throughout Uganda. This system became a prototype for the future parliament.