Presidential Budget Speech 2013

His Excellency the Vice President,

Rt. Hon. Speaker,

His Lordship the Chief Justice,

Rt. Hon. Prime Minister,

Ministers,

Hon. Members of Parliament

Members of the Diplomatic Corps, and

Ladies and Gentlemen.

I greet you.  I thank all of you for the positive contribution you made in the past financial year.

As you heard, our economy grew by 5.1% in the last financial year.  The sectors which grew fastest were; industry, transport, telecommunication, construction at 6.8%, and services at 4.8%.  The manufacturing sector grew by 4.2%.  Agriculture grew by 1.4%.  This is good but could have been much better.  As you can see, sectors like telecommunications and construction grow very fast.  This is because of the correct policy of liberalization that we put in place in 1987 and subsequently.

By liberalizing the telecommunication sector in 1997, there has been this phenomenal growth.  There is, however, one factor that is common to  telecommunications and construction.  They use little electricity. 

A sector like manufacturing needs much more electricity in order to grow.  Since this sector grew by 4.2% in 2012/13, it could have grown much more if there had been no shortage of electricity in the previous years.  We, at last, have adequate electricity at least for a little while.  Let us see its impact on manufacturing in 2013/14.  Between  the years 2000 when the Owen falls dam was extended and 2005, we had adequate electricity. During those years, the manufacturing sector was growing by 9% per annum.

Between the years 2005 and 2011, we had inadequate electricity supply.  The manufacturing sector grew by 7.0%.

Manufacturing is a sector that can create employment and earn more income.  While in Japan recently, I visited the steel making Japanese company known as NIPPON.  It employs 50,000 people and earns US $ 50 billion per annum.  This is the way to go. 

As you heard, the other data for the economic performance is:

• Inflation               -      3.6%
• Total GDP            -      US $ 22billion (exchange rate)
• GDP PPP method -      US $ 51 billion
• Export earnings    -      US $ 4.8 billion
• Remittances         -      US $ 767 million
• Imports                -      US $ 7.4 billion
• Investment inflows       US $ 1.47 billion
• Overall balance of payments – a surplus of  US $ 416 million

• Forex reserves      -      US $ 3.3 billion

These are good figures, especially, compared to our starting point in 1986.  The comparative figures were:

1.  GDP rate of growth -   0.6 %
2. Size of GDP          -      US $ 1.55 billion
3. Export earnings    -      US $ 411
4. Inflation               -      144 %
5. Investment inflows-     US $ 0
6. Forex reserves      -      US $ 16

However, the Banyankore say: “otarikumanya ngu bamutsigire ati bandinzire” -  “ the one who does not know that he is left far behind, he thinks the fellow travelers are still waiting for him”.

When we say that the GDP of Uganda is now US $ 22 billion, we should not forget that the annual earnings of Samsung Company are US $ 32 billion, bigger than the GDP of Uganda.  When we say that the GDP of East Africa is US $ 77 billion, we should not forget that the annual earnings of the USA Company Walmart is US $ 220 billion per annum.  Uganda is growing, Africa is growing; both Uganda and Africa will grow much more and to far greater heights.  However, we are still far behind.  The tragedy is that Africa or Uganda, which can grow much faster than they are doing today, are not doing so because of the disorientation of either all or some of the elements of the leadership in the respective countries.

Here, in Uganda, the mistakes of the elements of the leadership are well known – the delay of Bujagali, the delay of the other industrial projects etc.

Corruption on the part of some of the actors also delays many projects and distorts decisions.  Let us stop these and Uganda will roar.  I hope the courts will punish severely those guilty of corruption and will not give bail to them before the Constitutional time of 180 days.

Uganda now has a lot of opportunities.  As I told you the other day, we have got several offers to fund Karuma, Ayago and Isimba.  We are also promoting Oryang and Kiba for funding.  An American Company, AAE Geothermal has been licensed to generate electricity from the geo-thermal site around Lake Katwe.

Given the peace the UPDF has brought over Uganda and the liberal economic atmosphere ever since 1987, the two dangers we face are: corruption and delay as well as disorientation in decision-making in matters affecting the economy.  As you heard in the Minister’s speech, the Government of Uganda will fund more than 80% of the budget.  The outsiders will fund only 18% of the budget.  At the middle of this financial year, some partners withdrew budget support that had been planned because of failure to understand each other’s methods of fighting corruption and criminality.  Surely, many people in the World know the NRM is in a category of its own, unique compared to many actors in the world, when it comes to fighting criminality and corruption.  Having eliminated extra-judicial killings by State agents in Uganda, animal poaching etc, we have now started the war on embezzlement, bribery, nepotism and misuse of office. 

The cases from Office of the Prime Minister’s office, from Public Service and from the Ministry of health that are now in court were detected by the NRM sympathizers and the Police.  They were certainly not detected by the Auditor-General or anybody else.  The NRM knows what to do and when.  Therefore, those partners who cut off aid because we had discovered the corruption were not correct.  It was a high handed approach and could not be the correct way to fight corruption.  Fighting corruption does not need public relations and publicity seeking actions.  It needs the thorough – going approach of the NRM.  In spite of this “aid cuts” and other global economic problems, our economy grew by 5.1%, inflation was brought to 3.6% and the reserves stand at US $ 3.3 billion.  This proves what the Bible says – what comes from outside the body cannot kill the body or do irreparable harm; it is what comes from inside the body that causes irreparable damage.  It is our internal weaknesses that needs to be addressed.  This is in the Book of: Mark Chapter 7 Verse 15: “Nothing that goes into a person from the outside can make him unclean. It's what comes out of a person that makes a person unclean”.

The low rate of growth of 3.4% in 2011/12 was caused by the mainly internal mistakes ( sometimes assisted by external actors) that oppose our initiatives on the economy.  Especially, the NRM must get rid of these mistake makers.

This budget laid emphasis on infrastructure – roads and electricity.  All the major roads will be done.  Many of them with the Government of Uganda funding.  Where the development partners have come in, we salute them.  The examples of roads handled by partners are the following:

Nyakahita-Kazo

Fortportal-Bundibugyo

Vurra-Koboko-Oraba

Ntingamo-Kabale-Katuna

Atiak-Nimule

Kigumba-Masindi

Masaka-Bukakata etc

The ones that will be fully funded by Government of Uganda are the following;

Olwiyo-Gulu-Kitgum-Mucwini

Mukono-Kyetume-Katosi

Busia-Tororo

Mubende-Kakumiri-Kagadi

Mpigi-Ssembabule

Ssembabule-Villa Maria

Kafu-Gulu

Moroto-Nakapiripirit

The ones completed or nearly completed that have been done by the Government of Uganda are the following: Kampala - Masaka

Busega - Mityana

Malaba- Bugiri

Kawempe - Kafu

Tororo - Mbale

Mbale - Soroti

Jinja - Kamuli

This is the first time, since Independence, that such infrastructure tasks have been directly funded by the Government of Uganda on such a large scale.

Emphasis on infrastructure, not only in Uganda but in the whole of Africa, is justified because that is where one of the major bottlenecks is.  Let us look at the Kwh per capita of a selection of countries in the World today:

USA - 12, 000 Kwh per capita

UK- 5000 Kwh per capita

France 7000 Kwh per capita

Egypt 1300 Kwh per capita

China 3000 Kwh per capita

India 498 Kwh per capita

South Korea over 9000 Kwh per capita

Nigeria 106 Kwh per capita

Libya 4000 Kwh per capita

Niger 38 Kwh per capita

Chad 8 Kwh per capita

Kenya 133 Kwh per capita

Tanzania 73 Kwh per capita

Rwanda 20 Kwh per capita

With Bujagali, Uganda's KWh per capita is 150.

In 1986, Kwh per capita was 21.

This is not acceptable and cannot continue.

I would like to conclude by commenting on Regional Affairs a bit which is also linked to the same subject of development.  I have seen in the papers statements coming out of Egypt regarding the commendable work of the Government of Ethiopia of building dams for electricity in that country.  This is what the whole of Africa needs to do.  That is one reason the economy of Ethiopia has been growing in double digits.  It is, therefore, advisable that the new Government of Egypt and some chauvinistic groups inside Egypt should not repeat the mistakes of the past Egyptian Governments.  The biggest threat to the Nile is continued under-  development in the tropics – lack of electricity and lack of industrialization.  On account of these two, peasants cut the bio-mass for fuel (firewood – enku) and invade the forests to expand primitive agriculture.  Here in Uganda the peasants destroy 40 billion cubic metres of wood per annum for firewood.  They also invade the wetlands (ebisaalu, ebitoogo, entobazi, ebifuunjo, ebisharara) to grow rice.  This interferes with the transpiration that is crucial for rain formation.  Our experts have told me that 40% of our rain comes from local moisture – meaning from our lakes and wetlands and the rest comes from the Oceans.  That is why, for instance, West Nile and West Acholi have got two times more rain than Karamoja, being on the same latitude notwithstanding.  It is, apparently, on account of the huge wetlands in South Sudan, the forest in Congo and the wetlands in Uganda.  Ironically, the Egyptians wanted to drain the wetlands in South Sudan through the Jonglei canal.  It was one of the causes for the people of South Sudan to wage war against Khartoum which was collaborating with the Egyptian Government’s misguided and dangerous policies of that time.  Therefore, the threat to the Nile is lack of electricity in the tropics and lack of industrialization thereof.  Electrification so that people stop using fuel wood and industrialization so that people shift from agriculture to industry and services is the correct way.

I have given these views to the past Egyptian Governments and to the present one.

Therefore, it is advisable that those chauvinistic statements coming out of Egypt are restrained and through the Nile Valley Organization rational (not emotional and uninformed statements) discussions take place.  No African wants to hurt Egypt; however, Egypt cannot continue to hurt black Africa and the countries of the tropics of Africa. 

I thank all of you.