State of the Nation Address June 2011

Wednesday 8th June 2011
H.E President Y.K Museveni

Madam Speaker, under Article 101 (1) of the Constitution of the Republic of Uganda, the President is mandated, at the beginning of each Session of Parliament, to deliver to Parliament an address on the State of the Nation.    This afternoon Madam Speaker, I am, therefore, here to do two things:

First, to fulfill that constitutional obligation by giving accountability of what has been done since the last address which I delivered on 2nd June 2010

Secondly, I am here to apprise you Madam Speaker, Hon. Members of Parliament and the country about the plans and strategies of government for the next twelve months.

Rt. Hon. Speaker, permit me to congratulate all the Hon. Members of Parliament upon being elected to the 9th Parliament.

I congratulate you Madam Speaker and your Deputy upon your election to your respective prestigious positions. I congratulate the Leader of the Opposition upon his elevation to an essential office in democratic governance.    I congratulate all those who have been elected at the various levels of respnsibility.

The Political Scene

Madam Speaker, on 18th February 2011 we held the Presidential and Parliamentary Elections.  These were followed by elections at the various levels.  I congratulate all Ugandans upon the peaceful and active participation in the electoral process. I also congratulate the Electoral Commission  upon  a job well done.  Where there was violence, it was the exception rather than the norm.  I thank all Ugandans who participated and positively contributed to the success of the elections. 

I call upon the Electoral Commission and all stakeholders   directly concerned to study in depth the various reports that have come up on electoral process.    The following must be of particular interest, among others:

  • The management of the Voters’ Register, which I believe will be improved with the issuance of the National Identity Cards in the near future. I intend to write an article elections in Uganda, tracing for those who do not know the history of voting in Uganda.   The first direct elections in the whole country were held in 1961. One of the few outstanding issues to deal with, as far as elections are concerned, is the computerization of our identities so that we vote by our thumb prints electronically read.
  • The printing of Voters’ Cards and their security; and
  • Voter education in light of a high percentage of spoilt votes.

Madam Speaker and Hon. Members, we should congratulate ourselves upon funding fully both the Presidential and Parliamentary elections. We did not ask for any external assistance in terms of funding for the elections. Over 300 billion shillings which was spent on the elections does not include 180 billion shillings which was spent on identity cards.  All together, therefore, we spent about 500 billion shillings on the elections last year.

Madam Speaker, while we congratulate the winners in these elections, I wish also to thank the losers for their participation in the process. I implore them to continue to actively contribute to the development process of our nation as they prepare to try again in the next elections. Those who felt strongly that they did not lose fairly should have sought redress in the courts of law.

Madam Speaker and Hon. Members, we must embrace all democratic principles within our respective political parties.  Discipline is as important to democracy as it is for the management of our political parties.

Constitutionalism and the Rule of Law

Madam Speaker and Honourable Members, I would like to re-affirm the National Resistance Movement Government’s total and firm commitment to  the Rule of Law in the management of all public affairs of this country. 

Madam Speaker and Honourable Members, let us all remind ourselves that while Chapter Four of our Constitution is elaborate on the Promotion and Protection of Fundamental and other Human Rights and Freedoms, those rights and freedoms are NOT ABSOLUTE hence the provisions of Article 43(1): 

In the enjoyment of the rights and freedoms prescribed in this Chapter, no person shall prejudice the fundamental or other human rights and freedoms of others or the public interest.”

Equally important, under Article 17 of the Constitution of the Republic of Uganda duties of a citizen include, among others, the duty to:

(i)         Respect the rights and freedoms of others;

(ii)        Protect and preserve public property;

(iii)       Co-operate with lawful agencies in the maintenance of law and order.

General limitation on fundamental and other human rights and freedoms are spelt out in Article 43 (1&2).   Let us all exercise and enjoy our rights and freedom within the confines of the law.

State of the Economy

Madam Speaker and Honourable Members, on 8th June 2011, Uganda like the other four partner states forming the East African Community will be reading her Budget for the Financial Year 2011/2012.  The Budget Speech will give a detailed background to the economic outlook of our countryI shall, here, point out a few highlights.

Real Sector Performance

Uganda’s economy rebounded strongly in first half of Financial Year 2010/11 recording a growth rate of 9 percent in the July - December 2010 period.   This phenomenal growth is manifest in the construction boom, for instance with Kampala almost joining up with Mukono and Entebbe.    I am, therefore, amazed to hear some people doubting this growth. 

Between July – September 2010 an annual growth rate of 5.1% was registered with a 15.1% annual growth rate in October – December 2010. Industry and Services sectors grew by 17.6% and 13.6% in the respective two quarters. Month-on-Month growth rate of economic activity in bricks and cement, saw milling, paper and printing, as well as food processing was 8% in December 2010.

This overall economic performance of 9.1 % in the first half of the current financial year was better than that registered during the entire Financial Year 2009/10 which was estimated at 5.2%, as Uganda emerged from the global economic crisis.  The economic performance is still substantially higher than global and regional economic growth prospects estimated at 2.5%  and 4.5 percent  respectively.

The Ugandan economy was expected to grow by 6.6% for the whole of the Financial Year 2010/11, with forecast for future years exceeding 7 percent per annum.

External Sector

Madam Speaker, Uganda’s balance of payments with the external world continued to be constrained as a result of slower growth of exports, tourism receipts and remittances in the face of increased imports. This phenomenon is characteristic for exports  given the on-going recovery from the global economic crisis by some of Uganda’s major trading partners; while imports are structurally dependant on domestic needs, such as oil and petroleum products.   Though export receipts increased in January 2011 to US$ 211.6 million from US$ 129 million in February 2010, imports were twice as much at US$ 418.9 million, compared to export receipts of US$ 328.8 million in February 2010.   Formal non-Coffee exports receipts that registered the largest increments include sim-sim, tea, cotton and fish.

The national Foreign Exchange Reserves amounted to US $ 2.662 Billion in January 2011 representing 4.6 months of import cover, compared to US$ 2.812 Billion and US$ 2.498 Billion in December and June 2010, respectively representing slightly more than five months of import cover.

The Inter-Bank Foreign Exchange mid-Rate in February 2011 was Shs. 2,341.9 per US Dollar compared to Shs 2,303.9 per US Dollar in December 2010 and Shs. 2,257.3 per US Dollar in June 2010. The continued depreciation of the Uganda shilling is in line with increased import demand in the face of weak export performance that has not fully recovered from the global economic crisis.

Monetary Sector

Weighted average interest rates have remained stable over the period under consideration. The lending rates in January 2011 were at 20.1% compared to the same level in June 2010 and the savings rate remained at 2.4% during January 2011.  We shall have to study more closely the issue of the lending rates with the Minister of Finance so that certain distortions can be eliminated.

Treasury Bill rates exhibited increases between June 2010 and January 2011 as the Bank of Uganda sought to stem excess liquidity. Consequently, the interest rate on the 91- day Treasury Bill rate increased to 9.1 % compared to 4.3%; the 182-day Treasury bill interest rate rising to 9.4% compared to 5.3%; and the 364-day Treasury bill increasing to 9.8% compared to 6.2%. Private Sector Credit continued to grow at 35.9% between July 2010 and January 2011 amounting to an average of Shs. 689 billion per month compared to Shs. 438 billion per month between July 2009 and January 2010.

Revenue Performance

Revenue collections amounted to Shs 3,281.2 billion against the target of Shs 3,277.4 billion at the end of February 2011, representing growth of 20.1% compared to the same period last financial year and a marginal surplus of Shs 24 billion between July 2010 and March 2011.

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