I congratulate all of you on the attainment of the 50 years of independence.  I wish all of you a happy future.Before I talk about the last 50 years, let me first talk about Uganda.  There is a wrong but pervasive idea that Uganda was created by the British in 1894.  Even some official documents propagate this lie.  I have tried several times, in the past, to dispel this lie.  Let me try again.

Before the emergence of the present dynasties (the Kabakas, the Bahinda, the Bashambo, the Babiito, etc), Uganda had become one kingdom when Ruyonga and Ishaza formed an alliance, through the marriage of the former’s daughter called Nyamate, to the latter.  Ishaza and Nyamate produced Isimbwa (Simbwa among the Baganda).  Isimbwa succeeded Ruyonga and his capital was in Bigo bya Mugyenyi in the present day Sembabule district.  Isimbwa, eventually went to Bunyoro and produced a boy child with Nyinamwiru, Bukuku’s daughter.  The boy was the famous Ndahura (Ndawula in Luganda).  Isimbwa went to Bukiri (Lango and Acholi).  He, later, abdicated to his son Ndahura.  By this time, Ankore, Buganda, Bunyoro, Bukiri were one kingdom, under Ndahura.  One of the Bachwezi, Kyomya, had children with a Mukiri woman called Nyatwooro, daughter of Rabongo.  The children were: Nyarwa, Isingoma, Mpuga Rukidi, Kato Kimera, Kintu and Kiiza.  These legends may not be exact in terms of details.  They, however, give a general outline of the linkages of our peoples.  The shared Bachwezi names say it all: Isimbwa, Ndahura (Ndawula), Kagoro, Mukasa (Mugasha), Kyomya, Wamara, Mugyenyi, etc.  Archaeology confirms this history.  The excavations at Bigo and Ntutsi confirm that there were huge settlements at those sites by 1350 AD and 900 AD, respectively.  There were huge cities there (Endembo).  Who were the kings there?  Certainly they were not the present dynasties of Buganda, Bunyoro or Ankore.  Who, then, were they?

When we restored the traditional leaders, it was our expectation that the cultural institutions would delve into these obvious linkages among our peoples instead of promoting tribal chauvinism.

It was not just that the kingdoms and the chiefdoms of Uganda had linkages among themselves, it is also true that what is now Uganda had close and organic links with the Coast of East Africa, with Congo and with South Sudan.  As I have pointed out some time back, the excavations at Ntutsi and Bigo retrieved cowrie shells (ensimbi) and glass beads (enkwanzi).  Cowrie shells could only come from the ocean and there is no ocean in Uganda.  Where, then, did the cowrie shells come from?  Obviously, it was from the ocean.  Which ocean?  The Indian Ocean, because, at that time, the route to the Atlantic ocean, through Congo, was not open.  It is Stanley who opened that route in 1874.  Uganda was not manufacturing glass beads.  Where did they come from?  They were coming from India as well as from the Middle East and passing through Zanzibar.  The oneness and linkages of the African peoples in this Region is further illustrated by the dialects, the languages, the clan system and other aspects of culture.

On this occasion, let me just mention something on the clans, dialects and languages.  Take my Basiita sub-clan.  I call it sub-clan because it belongs to the bigger cluster of clans known as Abagahe.  All these clans have a totem of the striped cows ─ black stripes against a background of a brown skin.  Such a cow is known as Ngoobe in Runyankore and Lubombwe in Luganda.  My sub-clan, the Basiita, is found in Kigezi (especially Rukungiri), Ankore, Tooro, Bunyoro, in Tanzania (Karagwe, Buhaya, Bujinja, etc.) and in Rwanda.  In Bukonjo, the Basiita are called Baswaaga.  In Buganda, they are called Ab’ ente, with the same totem ─ the striped cow.  In Sironko, there is a whole parish, known as Busiita.  Dr. Wabudeya belongs to this clan.  The late Rev. Engola Etwai of Lango belonged to the cow clan.  In Tanzania, there is a Minister in the present Government, Dr. Anna Tibaijuka.  She belongs to this clan as did the late Cardinal Rugambwa.  The former President of Burundi, Batista Bagaza, apparently, belongs to the Basingo clan, the clan of the Rt. Hon. Eriya Kategaya.  The Basiita clan, of course, also is found in the DRC, the Bunia area.  There is the Bahinda clan, their totem is a monkey.  They became the ruling clan in Ankore, in Tanzania (in the areas of Karagwe, Buhaya, Bujinja, Busuubi and Buha in Kigoma) after the collapse of the Bachwezi Dynasty.  That is why you find a number of Ruhindas in Tanzania.

Coming to the dialects and languages, you hear a lot of untruths on this subject.  You hear that Uganda has got “a lot” of languages.  Where are these “many” languages?  In fact, there are only four languages in Uganda: the Bantu dialects; Luo; Karimojong-Ateso; and Lugbara-Madi.  This is why I never use translators in most of the Bantu speaking areas.  Somebody speaking Rukiga, Runyoro, Rutooro, Luganda, Lusoga, Luruuli, Lunyala, Lugweere, Runyambo, Ruhaya, Rujinja, Lunyole or Ruhema of Congo is, actually, speaking Runyankore in a certain way, slightly different from the way I speak Runyankore, but perfectly intelligible to me.  With Kinyarwanda-Kirundi, mutual intelligibility is about 50%.  With Lumasaaba- Lusamya and Rukonjo ─ most of the words are the same but pronounced differently or sometimes used differently.  Take the word ─ enyena.  In most of the Bantu dialects of this area, the word, enyena, is used to mean ─ a calf or young cow that has not produced a baby cow.  However, in Lumasaaba, it is also used to mean a dog puppy.  This makes it so funny to a Runyankore speaker.  The Bagisu call a puppy ─ inyana yimbwa.  The Banyankore call a puppy ─ ekibwaana and use the word enyena to apply only to a pre-mothering cow.  The Bagisu also use the word hugona (kugona in Runyankore) to mean to sleep just like the Nyakyusa of South Western Tanzania.  In Runyankore, kugona means to snore.  In the same way there are similarities among the Bantu dialects, there are also similarities among the Luo dialects (Acholi, Langi, Alur, Japadhola, Luo of Kenya, Labwor, Anuak of Ethiopia, etc); Karimajong-Ateso, the Ateker group, which also includes the Turkana of Kenya, the Rendille of Ethiopia, the Kakwa and the Bari of South Sudan; and the Lugbara-Madi which include some of the dialects of South Sudan which I have not studied except for the Lugbaras and Madis who are found in Congo and South Sudan.

Apart from the similarities among the Bantu dialects, there are also linkages between Bantu languages and the Luo, Lugbara-Madi and Karimojong-Ateso.  The Oyima clan of Lango, the clan of the late President Obote, means the Bahima clan.  The Bahima are the cattle keeping portion of the populations of Karagwe, Ankore, Bunyoro, Tooro, parts of Congo, etc.  The word Lubaala means anthem in Acholi.  In Luganda, the word Omubala means clan anthem.  The word Wankachi used to describe one of the gates in the Kabaka’s palace is known as Wang-kac in Luo meaning the main gate.  The word: Oyaa in Lugbara means syphilis.  In Runyankore, syphilis is known as: ebihooya.  The word nyaara in Luo means daughter.  The Bantu speakers know what that word means.

My question, then, is: if you say that Uganda was created by the British in 1894, did the British create these similarities and linkages?  The answer is, obviously a big “no”.  The people of this area are either similar or linked.  At some stage, according to the oral history, a big chunk of them were even governed together as I already said.  In any case, they were always trading together ─ all the way to the River Congo in the West and to the Indian Ocean in the East.  The kingdoms that colonialism found in the area, were, sometimes, fighting each other but, sometimes, co-operating with one another.

Indeed, on page 300 of Hannington Speke’s Book: The Discovery of the Source of the Nile, Kamurasi made the following comments to Speke:

“After arriving there, and going through the usual salutations, Kamurasi asked us from what stock of people we came, explaining his meaning by saying, “as we, Rumanika, Mtesa, and the rest of us (enumerating the kings), are Wawitu (or Princes), Uwitu (the country of the Princes) being to the east”.

Kamurasi was referring to Rumanyika of Karagwe, Tanzania, as his brother and Mutesa as his son.  Therefore, all these were fraternal kingdoms that at some stage were governed together.  However, even at this stage, following the disintegration of the old kingdom, Bunyoro was still a very large kingdom, covering an area that could not be smaller than the present day Uganda.

On page 277 of the same book, Speke was trying to intimidate Kamurasi’s official known as Kijwiiga, mis-pronounced as ‘Kidgwiga’, by saying that if the latter did not open the way for them to Gani, they would combine with Mutesa (Mtesa) and the latter’s rebellious brothers such as Ruyonga and fight him.  Kijwiiga answered as follows:

“Nonsense! Kamrasi is the chief of all the countries around here ─ Usoga, Kidi, Chopi, Gani, Ulega, everywhere; he has only to hold up his hand and thousands would come to his assistance”.

Gani must either be West Nile or South-Sudan and Ulega (Bulega) is Congo.  Bukiri is the traditional name the Banyankore, Baganda, Banyoro and Basoga people give Lango and Acholi region. In the foregoing quotation, Bukiri was mispronounced as Kidi.  In the colonial times when the Banyankore cattle keepers were going to those areas to work after tse-tse flies had killed their cattle in Ankore, we would say: “Bakaza Bukiri – they went to Bukiri.  Therefore, this idea that Uganda did not exist until the British came it, is nonsense.  In fact, colonialism interfered with the wider Commonwealth of these kingdoms and chiefdoms, from the River Congo, Ituri forest and the swamps of South Sudan to the Indian Ocean Coast at Zanzibar.  The only problem was the greed and narrow mindedness of the kings and the chiefs.  Moreover, we are even luckier that our people at the Coast distilled a non-tribal dialect from these many dialects known as Swahili.  Swahili is a Bantu dialect that is non-tribal and was enriched by words from Arabic, Portuguese, etc.

The fact that such untruths can persist and be propagated even in schools and universities not to mention newspapers, media houses, churches, the traditional institutions which were resurrected at great sacrifice to our lives and time, etc, shows the first problem that afflicted independent Uganda.  This was the problem of ideological disorientation.

Was the economic, social and political space created by Uganda good or bad for the producers of Uganda?  During the launch of the patriotic clubs in 2009, I answered this question.  My prosperity as a Munyankore is not just because of the Banyankore; it is, mainly, because of the people of Kampala (Ugandan or otherwise) that buy my milk, my beef and my matooke. Actually, most Banyankore do not buy my milk because they also produce milk except the ones living in the towns.  The Banyankore only help me to generate enough volumes of milk for ease of marketing and processing.  It is only the parasitic interests that are not engaged in production that do not appreciate the importance of Uganda.  Also the uninformed may not see the importance of Uganda.  Most of the problems Uganda has had since independence in 1962 were springing from the pushing of these parasitic interests.  There was also the issue of the poor or no sensitization of the masses so that the parasites are isolated.  The ideological disorientation of so many actors was, therefore, problem number one of Uganda.

This ideological disorientation led to problem number two ─ the inability to restructure the colonial state to the chagrin of Ugandans.  Without a nationalist ideology, it was impossible to, for instance, build a national Army.  Sectarianism that was being manipulated by colonialism could not produce a national Army.  The Governments that took over after independence, trying to rely on these sectarian Armies that had little or no education, created a dangerous booby-trap for our country.  In time, that booby-trap exploded with tragic consequences for our people.  Since Independence, about 800,000 Ugandans have died on account of political violence, mainly, in the form of extra-judicial killings by indisciplined Armies.  In Luwero, we have 32 mass graves, each with about 2,000 skulls and other skeleton parts.  That is why point number two (2) of the NRM Ten-Point Programme that was, finally, promulgated at Kanyaara in the Luwero Triangle talked of security of persons and property.  Extra-judicial killings, impunity on the part of security forces, poaching of animals in the National Parks, looting of people’s property, etc., were the order of the day.  The NRM addressed this by targeting and destroying the old colonial Army and replacing it with an Army that is based on patriotism which despises sectarianism.  Of course, it is also an Army that is led by educated people.  Hence, its heroic performance on the battle fields.  The UPDF has solved one strategic bottleneck ─ insecurity of persons and property.

Apart from the two strategic bottlenecks above ─ ideological disorientation and a criminal state ─ there are eight (8) other strategic bottlenecks independent Uganda had to deal with.  These were:

    attacking the private sector;

    an undeveloped human resource;

    inadequate infrastructure that causes the costs of doing business in the economy to go up thereby rendering our products un competitive and undermines the profitability of investments by having the said high costs;

    a small internal market caused by the political balkanization of Africa;

    lack of industrialization;

    an undeveloped services sector;

    underdevelopment of agriculture; and

    lack of democracy.

Attacking the private sector arose from a mistaken view among some of the leaders.  Some people thought that altruism was universally and equitably distributed.  They thought that everybody, inspired by altruism, was able to work diligently and devotedly even if he was working for the State.  They did not believe in the story of the ‘hired hand who runs away from the wolf when it comes to attack the sheep unlike the owner of the sheep that will defend them even at the cost of his own life’.  This is from the Gospel according to Saint John 10:12.  This was a failure to understand the nature of the majority of human beings.  What will make a human being work devotedly?  Can he/she work devotedly for the benefit of others as he/she would work for himself/herself?  This was a philosophical question.  Are all human beings Mother Terezas who can be motivated by altruism to work devotedly for the benefit of others?  Many of the NRM people are, indeed, like Mother Tereza.  That is why we could fight all these wars.  Who was paying us?  However, the majority of human beings are selfish and ego-centric.  They work best when they work for themselves.  When we are designing a plan for the entire society, it is better to utilize the ego-centrism of the human beings to build our economy and society.  It is not correct to be subjective and assume that because you are not selfish, the entirety of society is also selfless.  This is not objective but subjective.

It is better to recognize and utilize private initiative ─ the entrepreneurial spirit.  In the past, we used to talk of the three factors of production in economics.  These were: land, capital and labour.  It was later, realized that we needed to add a fourth factor, entrepreneurship ─ private initiative.  I hear that since my time of studying economics in the 1960s, a fifth factor has been added, knowledge.  As you know, entrepreneurship and knowledge are both private and personal capabilities.  Soon after Independence, influenced by the success of socialism in the Soviet Union, many African elite declared socialism of some form ─ ending up with interfering with the private sector.  Here in Uganda, we had bouts of that which culminated in the expulsion of the Ugandan Asians by Idi Amin in 1972.  This was a big disservice to Uganda.  That is one of the factors that led Uganda to join the rest of Africa in lagging far behind Malaysia, Singapore and South Korea, which were far much less endowed than the African countries, in rapid socio-economic transformation.  In Uganda, when our leaders were, in one way or another, attacking the private sector, in South Korea, General Park Chung Hee was empowering private groups such as Samsung, Daewoo, Hyundai, etc.  Chinese private groups have played big roles in building the economies of Malaysia, Singapore, Indonesia, etc.  Even today, bias against private enterprise by some political actors, corrupt public servants, etc interferes with the fast development of Uganda.  However, the NRM, under my leadership, has firmly stood behind the private sector.  I am a socialist by ideology.  However, I long ago realized what Mzee Deng Hsiao Ping of China realized and implemented since 1978 ─ to use capitalism to build socialism.  This is correct and those who inconvenience private entrepreneurship that is within the law are, knowingly or unknowingly, the new enemies of Uganda.  On account of our correct stand, by ensuring security of persons and property, as well as supporting private enterprises, the GDP of Uganda has been growing at the rate of 6.5 for the last 27 years, the problem of inadequate infrastructure, especially electricity, notwithstanding.  Now that we are solving the problem of electricity, the economy will roar at an even much faster rate.  I have no doubt about that.  However, inconveniencing legitimate private entrepreneurship is un-acceptable.

The next strategic bottleneck was a human resource that was underdeveloped on account of inadequate education and health care.  These two have been our priority. In 1986, there were a total of 936 Health facilities all over Uganda, of which 89 were Health Centre IIIs or their equivalent of that time, 104 were Health Centre IVs and only 81 were District Hospitals and above.  We now have 1,279 Health Centre IIIs, 193 Health Centre IVs and 152 Hospitals (i.e. 135 General Hospitals, previously called District Hospitals, 17 Referral Hospitals). The private ones are 342 Health Centre IIIs, 23 Health Centre IVs and 88 Hospitals.  Our people, in their enthusiasm and without clearance from the Central Government, went ahead and built 3,549 Health Centre IIs at the parish.  In the recent debate within the Government and Parliament, our stand of consolidating health care at HC IIIs and IVs has been re-affirmed.  The salaries and allowances for the doctors at HC IVs have been increased and will be increased even more in the future.  Immunization has been quite successful.  That is why infant mortality rate has declined to 54 out of 1,000 live births from 120 out of 1000 live births in 1986. If only our people could add hygiene, nutrition and disciplined behavior in sexual matters, we would eliminate 80% of all sicknesses.

Increase in education has been phenomenal.  Enrolment in primary schools, is now 8,317,420 pupils compared to 2,203,824 pupils in 1986; in secondary schools, it is 1,225,326 compared to 123,479 students in 1986; in universities, it is 150,000 students compared to 5,390 students in 1986.  We are now working on skills and emphasizing science education.  The problem is now jobs for the schools and university graduates.  This is a problem but a good one.  We have had very good success in this area in spite of inadequate resources.  This strategic bottleneck of uneducated population is being addressed by emphasizing skilling of the youth.  We must quickly deal with the other strategic bottlenecks so that we create jobs for these youth.

Strategic bottleneck number five was undeveloped infrastructure.  By independence we had only 844 kms of tarmac roads (now we have 3,300 kms), 150 megawatts of electricity and very few towns with piped water, etc.  This minuscule infrastructure deteriorated during the time of Amin.  At least the post independence UPC Government had extended tarmac roads to new towns such as Mbarara-Kabale, Mbarara-Fort Portal, Kampala-Gulu-Lira, etc. This infrastructure, however, collapsed during Idi Amin’s time.

By 1986, Jinja was producing only 60 megawatts.  The NRM, on account of depending on external funding up to 2005 for electricity, could not launch its own aggressive plan.  Using external funding, we had repaired the Nalubaale power station back to its original capacity of 150 megawatts and later up-graded it to 180 megawatts as well as built the Kiira power station to the East of the Nile with 200 megawatts if the water to run both is available.  That was the end of progress in that sector. External funders would use every pretext to block projects of electricity. Excuses like the environment, Egyptian objections and some Basoga spirits would all delay the construction of a dam.  It was only the creation of the Energy Fund that liberated us from that blackmail.  Uganda is now generating 810 MW.

With Karuma, which we are about to embark on, we shall be generating 1,885 MW.  By 2014, we shall start generating power using crude oil and gas before we start using Heavy Fuel Oil (HFO) from our oil.  Using the Energy Fund we have supported the following mini-hydro projects to get connected to the grid by supporting their inter-connection lines: Bugoye (13 MW), Buseruka (9 MW), Mpanga (18 MW) and Ishasha (6.5 MW).  We have also extended electricity lines to the following Districts:  Kibaale, Kyenjojo, Bundibugyo, Kanungu, Kaberamaido, Amolatar, Aleptong, Oyam, Dokolo, Nakapiripirit, Amudat, Moroto, Napak, Kyankwanzi in addition to the rural large industries like Tea Factories, Fish Processing Factories and Mining areas.  With reliable electricity, the economy will grow much faster.   Since the switching on of Bujagali in February 2012, several industries have been connected consuming about 36 MW and expected to grow to about 56 MW by the end of 2012. The following new businesses have been connected:

    101 large and medium scale businesses;

    458 commercial enterprises;

    34,600 domestic users;

    Since June 2012, about 40 large existing businesses have significantly increased their consumption e.g. Roofings, Hima cement, Tororo cement, Tembo steel, etc;

    The number of domestic users is also increasing.

With reliable electricity, the economy will grow much faster.  The real march forward has begun.

Strategic bottleneck number six was the small market created by colonialism.  While British colonialism had seen the wisdom of re-assembling the East Africa common market which had been fragmented by the competing colonial interests – German, British, etc, that effort did not include Congo, Rwanda, Burundi or South Sudan which were part of our old system.  Without a big market, you cannot sustainably produce.  Somebody must buy what you produce.  Big markets are stimulants for production.  Working with our partners, we have revived the East African Community (EAC) and also created COMESA.  Besides, we have negotiated market access, tariff free and quota free, with USA, EU, Japan, India and China.  The markets are there.  Let us produce for them.  The GDP of Uganda was USD 1.55 billion in 1986.  It is now USD 20 billion.  The size of the economy has grown by 13 times since 1986.  If we succeed in adding value to our coffee, our cotton, our bananas, our fruits and to our minerals (copper, gold, cement, iron-ore and phosphates, the size of GDP would jump to USD 155 billion which would be bigger than South African’s economy by 1994 when Nelson Mandela took over.  Now that we are beginning to solve the problem of electricity, this is what we are targeting.  Therefore, lack of industrialization has been strategic bottleneck number seven (7).  The cure for this is industrialization.   Adding value to our coffee, for instance, would push the value of our coffee to go up by, at least, ten times – from USD 400 million to USD 4 billion.

Strategic bottleneck number eight (8) has been the underdevelopment of services.  In 1963, I drove (kufunya) a bull on behalf of Mr. Kaguta, my father, from Kikyenkye (Ibanda) to Katebe (10 miles from Mbarara).  I was assisted by another slightly older person.  I was 19 years old at that time.  Although we had money, we could not get anything to buy on the way.  We could not even buy a soda from the few shops on the way (e. g. Rubindi) because we had no ‘empties’ – empty bottles.  Yet, we did not have time to stand in the shops so as to drink the soda and finish it in order to hand back the bottle.  We even offered to put 50 cents down as an extra charge to cover the soda bottle but the shopkeepers would not agree.   In the end, we quartered for the night at Rweibare, gave money to a mutembuuzi (somebody starting a fresh garden) to go and buy a bunch of banana from a nearby village, cooked for us bananas with mere salt so that we could have a sort of breakfast, supper for the previous night, lunch for the previous day and lunch for that day in that one meal.  Services were poor if not non-existent at all.  Services have now increased but there is a lot to be done.  With the underground and the under sea cables, telephones are much easier; public transport is more plentiful; hotels and trading centres are more plentiful today than in 1986 and before.

At independence, there was one capital city, Kampala.  There were 13 municipal councils, 27 town councils and a few trading centres.  What is the situation now?  There is still one city, Kampala – Although Jinja, Mbale, Mbarara, Fort Portal, etc., are clamouring for city status.  There are 22 municipalities, 174 town councils, 197 town boards and very many trading centers which are not gazatted.

If you take the example of the Kazo-Nyabushozi  area that I know well, there were only two shops at Burunga in 1966 about three shops at Kiruhuura, three shops at Rushere, etc.  There are now big trading centres at Burunga, Rwemikoma, Kijuma, Mugore, Nshweere,  Rushere, Katongore, Bijubwe, Rushoga, Kyakabunga, etc.  All these contain services – shops, eating houses, telephone agents, etc.

Strategic bottleneck number nine has been the underdeveloped agriculture.  The British had promoted coffee, cotton, tea and tobacco – crops that were of interest to the colonial system.  Beyond that, they had no interest in bananas, cattle, maize, millet, sorghum, irish potatoes, sweet potatoes, cassava, etc.  In order to modernize agriculture, we have to undertake the following measures:  improved seeds and breeding stock; improved agro-practices; organic and inorganic fertilizers; as well as irrigation and water conservation in the soil.  We have made some good progress in the area of seeds and breeding stock – there are products with high yields e.g. clonal coffee, improved breeds, etc.  What we need is the multiplication of these seeds.  Let us take coffee.  There are about 6 million homesteads in Uganda.  If four million of them were to grow one acre of coffee each, when each acre requires 450 trees, that would mean that we could require 1.8 billion seedlings.  When they would mature in 18 months, Uganda would harvest 18 million bags of 60 kg each.   It would be number two or three in the whole world in the production of coffee depending on the coffee production in Vietnam which currently produces 17-19 million bags.  Four million acres of land represent only 10% of the whole acreage of arable land in Uganda, 40 million acres.

Some years ago, we put out plans of 4 acres per family of small holders planted as follows:  One acre of clonal coffee; one acre of fruits (oranges, mangoes or pineapples); one acre of bananas; and an acre of pasture (elephant grass) for 6 cattle in the shed (zero-gazing).  To this, add poultry, piggery and improved goats in the backyard of the home.  A combination of all these enterprises would bring in much in excess of the 20 million shillings per annum we set as a minimum.  In the non-coffee growing areas, we can use fruits.  Where possible, e.g.  Busoga, Teso, Lango, some parts of Buganda, some parts of Ankore, fish ponds should be promoted as well as apiary.  In some areas, I am promoting silk rearing.  With the above mentioned enterprises, we are talking about small holders.  The big farmers and the plantation owners have different options: ranching, cotton growing, tea growing, sugarcane, palm oil, cocoa, etc.

Strategic bottleneck number ten, was lack of democracy.  We have achieved democracy.  However, some people want to turn our democracy into anarchy, using populism and opportunism.    This is injurious, especially if it creates a feeling of paralysis and crisis.  We need disciplined democracy.

You recall the panic that was generated last year when inflation climbed to 30%.  You remember, that I told you that that inflation was good because it showed that there was high demand for food and other products.  I called on Ugandans to produce more in order to feed these bigger markets.  As we speak today, inflation is only 5.4%.  Shame is on whom – the charlatans or ourselves?

We have identified the above mentioned ten (10) strategic bottlenecks that Uganda has had to face in the last 50 years.  To recapitulate, these are:

    ideological disorientation;

    a state, especially the Army, that needed restructuring;

    the suppression of the private sector;

    the underdevelopment of the human resource;

    the underdevelopment of the infrastructure (the railways, the roads, the electricity, the telephones, piped water, etc);

    a small market;

    lack of industrialization;

    the underdevelopment of the services sector (hotels, banking, transport, insurance, etc);

    the underdevelopment of agriculture; and

    the attack on democracy.

The NRM has long identified all these bottlenecks and is in the process of addressing each of them.  The process of addressing each one of them has gone some distance.  Some still have a long way to go.  On the ideological plane, we still have groups that are still trying to push sectarianism and chauvinism.  This matter needs to be concluded.  No group should be allowed to continue on this false path.  The NRM stands for four principles:

    nationalism,
    Pan-Africanism,
    Socio-economic transformation, and
    democracy.

On the human resource development, we have gone a long way.  What is needed is more skilling and adequate remuneration of the crucial cadres such as scientists, judges, teachers, soldiers not to foeget other security personnel as well as managers.

As far as infrastructure is concerned, this is a crucial frontline.  It is good that we have now began to focus and have gained some progress on electricity.  We are not going to relax on this point. We are aiming at 3,500 megawatts in the short-run.  Uganda, however, needs something in the range of about 20,000 megawatts which is the level of electricity a country like Japan consumes minus what they need for winter or hot summers which Uganda, fortunately, does not have.  Fortunately, Uganda has the resources ─ hydro-power, fresh water bodies, good agricultural land, petroleum and gas and other minerals etc.  National Planning Authority (NPA) has found out that we need about US$ 13 billion to push Uganda to a middle income status.  In the last 27 years, the total amount of aid and loans from outside, from all sources, only amounts to approximately US$ 17 billion in total.  If we are earning US$ 5 billion per annum from petroleum and gas, we only need three years to raise the money we need to invest to convert Uganda into a middle income country.

By dealing with infrastructure, it will be easier for us to industrialize Uganda.  Good and adequate infrastructure, means low costs of doing business in Uganda.  This means more business coming to Uganda.  This is the key to industrialization and the modernization of the services.

The plan for modernization of agriculture is, partially, addressed with our research institutions developing improved seeds and breeding stock.  We need to multiply these products to meet our planting and stocking needs.  With our oil money, we shall deal with the issues of irrigation and, if the private sector has not shown up, we shall build the fertilizer factory at Tororo by using Government funds.

However, we need to protect our environment to ensure the durable productivity of our good land and to maintain reliable rain patterns.  We need to protect the rivers and the lakes from silting as well as the wetlands because they help us with transpiration that gives 40% of our rain.  The other 60% comes from the oceans (the Pacific).  That is why West Nile and Acholi have more rain than Karamoja although they are on the same latitude.  West Nile and Acholi get moisture from the swamps of South Sudan and the forest of Ituri (Congo).

Although we emancipated the private sector through liberalization, that sector is still inconvenienced by corruption of the public servants as well as some elements of the political class and also the arrogance and the myopia of some elements of the political class.  This corruption must stop.  As you have seen, the Criminal Investigation Department (CID) is hot on the trail of the suspected thieves in various sectors.

In restructuring the State, the NRM mainly dealt with the Army.  Recently, we have been dealing with the Police and URA.  We need to deal with the whole civil service and judiciary so that we eliminate corruption and anti-private sector attitudes.  In my address to the nation recently, I told you that, in modern economies, apart from peace and security that are provided by the State, there are two sovereign actors:  the investor and the consumer.  Without these two, there will be no sustainable production or wealth creation.  The investor encapsulates savings or ability to borrow, entrepreneurial skills that enable one to identify opportunities to create wealth and has the ability to deploy the appropriate technology to make quality and price-wise competitive products.  All wise countries need to attract but not to mishandle these actors – the investor and the consumer.

Uganda is going to become a first world country in the next 50 years.  We shall become a middle income country in the next few years.  Our GDP per capita is today US$ 580.  With value addition to our oil, our coffee, our cotton, our fruits, our maize, our leather, our beef, etc., this GDP per capita would rise to US$ 2,700 even at the present level of raw-material production.  To become a middle income economy, you need to have a GDP per capita of at least US$ 1,000. This we can quickly achieve now that we are solving the problem of electricity.  Therefore, in the next 50 years, if we follow the NRM line, Uganda will become both a middle income country and a first world country.  We have, since some time now, identified the strategic mistakes.  They can be solved.  This Century is Uganda’s Century, it is Africa’s Century.  It will be the first time, ever since the conquest of ancient Egypt by the Persians in the year 525 B.C., that Uganda and Black Africa will be, in terms of development, at par, or even ahead, of the most prosperous countries in the world.  We have the means, we now know what was lacking and we have always had the intention to fundamentally transform Uganda.

Long Live Uganda, Long Live Africa.

I thank you all.

Speech By H.E. Yoweri Kaguta Museveni President of the Republic of Uganda At the Opening of The African Union Summit Theme:  Maternal, Infant and Child Health and Development in Africa Commonwealth Resort, Munyonyo, Kampala 25th July 2010 1 Your Excellency Dr. Bingu Wa Mutharika, President of the Republic of Malawi and Chairman of the African Union; Your Excellency Jean Ping, Chairman of the African Union Commission (AUC); Your Excellencies Heads of State and Government; Other Leaders of Delegations; Invited Guests; Ladies and Gentlemen. The people of Uganda welcome you to your second home, Uganda. Your decision to hold our Summit in Uganda, this July 2010, was an honour to the people of Uganda. The theme of the Summit is: “Maternal, Infant and Child Health and Development in Africa”.  When I saw the theme, my 2 immediate response was: ‘How can we discuss “Maternal, Infant and Child Health and Development in Africa” without discussing the foundation issues of job-creation, Human Resource Development and infrastructure development?’  In order to sustainably support maternal health, you need money to buy drugs, medical equipment, fund health units, etc.  Our countries will not have the necessary money without adequate tax collections by our Governments. Our Governments will not collect enough taxes unless our economies grow.  Our economies will not grow unless we apply the right strategic stimuli to them.  Some of the Asian societies have been able to transition from “Third to First World economies” in the last 50 years.  Many of the African economies are endowed with more natural resources than the Asian economies.  Yet they have not been able to transition while the Asians have.  Why was this so?  It was so because, as I have already said, some strategic stimuli necessary to spur the economy to mutation have been missing.  I do not want to put out the full list of the necessary strategic stimuli that are needed to cause the 3 transition of our economies.  I had done this when we met for the G-8 at Sea Island (in 2004). All I need to say for this occasion is that we shall not be able to achieve socio-economic transformation if we do not address all of these strategic bottlenecks.  I will just take one example – electricity.  How can an economy become modern if it does not have access to adequate and reliable electricity?  There is a unit of measurement known as kilowatt hour (kWh) per capita – the amount of electricity consumed by each person in a country per annum.  The kWh per capita of the USA is about 14,124.  Some of the African countries have as low as 9!!  High cost and shortage of electricity, poor roads, inadequate human skills, etc. – all translate into high costs of doing business in a given country.  This, in turn, means that such an economy is not an attractive business destination.  No or little investment will, therefore, take place with all the consequences already stated above. Owing to my forty-five years of student activism, liberation struggle and running a non-developed economy, I have now 4 crystallized the issues.  One cause of failure to develop infrastructure in Uganda was depending on foreign borrowing or grants.  The foreign lending Agencies either do not know or do not care to find out the magnitude of needs Africa has.  It takes 15 years to negotiate for one power dam (its funding).  During the time I have been in Government, I have discovered that depending on external funding for infrastructure development (grants and loans) is very dangerous.  In one of our dialects we say: “kewelimidde akira mbegelaako” – the one who has grown his own crops is better than the one that begs for food from neighbours.  The money begged for or borrowed from outside is too little, very unreliable and too slow in coming to be able to help us in dealing with infrastructure. In the last few years, therefore, given the growth of our economy and our improved tax collection, we have set up our own Energy and Road Funds solely funded by the Government of Uganda.  We are, at least, able to move fast on many infrastructure projects: hydro-power dams, electricity transmission lines, roads and even the railway.  Given that our economy has been growing at the 5 average annual rate of 7.0% per annum over the last 24 years, one can imagine what will happen when we have solved the problems of electricity as well as road and railway transport. This does not mean that we do not appreciate external support.  We say in one of our dialects that: “etajugirwe nyoko, ku obona ekirengye oti nariire” – a cow which is not your mother’s bride price, even if you are given a hoof when it is slaughtered, you should be grateful.  We are, therefore, sure that Uganda will become a middle-income country by 2015 and, by that time, our electricity generation capacity will be about 3,800 mgws.  Our electricity generation capacity was only 60 mgws in 1986 when we took over Government.  It will soon be about 1,000 mgws after the completion of the new dam (Bujagali).  In the next 20 years i.e. 2030 our electricity generation capacity will stand at about 17,000 mgws and, by that time, Uganda will be an upper middle-income country.  The building up of power generation capacity has not been as fast as we would have wanted precisely because of relying on external funding.  This will no longer be the case given our improved financial capacity.  In the past, we had no choice. 6 Coming to the question of “Maternal, Infant and Child Health and Development in Africa”, the situation in Uganda is currently as follows: maternal mortality ratio is now 435/100,000 while infant mortality rate is 76/1,000. In terms of infrastructure, we have extended health units up to the Sub-county level.  There are 1,116 Sub-counties in the whole of Uganda.  The radius for many of the Sub-counties is 4 miles.  This is far much better than what we used to have in the colonial times. A health unit would cover an area of 15 miles or more.  In some cases we have gone to lower levels – to the Parish.  This would give us a radius of only 2 miles or less.  The problems are now only two: adequate funding for the consumables: drugs, gloves, etc; and corruption among medical workers who steal and sell Government drugs and other supplies.  There is always pressure to pay public servants more so as to ‘cure’ corruption.  Yes, we are beginning to improve the salaries of medical workers as well as other science graduates and technicians.  However, we have vigorously rejected the strategy of only paying public servants and 7 forgetting to fund roads, power dams, the railway and the peasants. Additionally, we are intensifying monitoring of health services, embossing drugs of the Government and other medical equipment. In the roadmap for accelerated reduction of maternal, neo-natal mortality and morbidity, we aim at reducing the maternal mortality ratio from 527/100,000 in 1990 to 131/100,000 by 2015.  Regarding infant mortality reduction, Uganda aims at reducing the ratio from 122/1,000 in 1990 to 41/1,000 by 2015. Finally, I thank Your Excellencies for your moral support following the terrorist attack on merry-makers who were watching World Cup football on screens in a restaurant and in an open field. 76 innocent young people were killed.  I am glad to inform Your Excellencies that many of these organizers have been arrested. Their interrogation is yielding very good information.  Meanwhile, in Somalia, on the 4th and the 21st of July, 2010, those terrorists attacked the Transitional Federal Government (TFG) and the African Union (AU) positions.  They got the punishment they deserved.  TFG and the AU Forces defeated the attacks.  I, however, recommend that the AU members do not accept this 8 arrogance.  Who are these people who dare to attack AU Flag? Whose interests are they serving?  These terrorists can be and should be defeated.  As you may know, I have quite long experience with fighting.  I, however, have great contempt for the authors of terrorism – using violence indiscriminately, attacking non-combatants, manipulating children to be used as cannon fodder.  I am glad the whole of Africa have condemned these cowards.  Let us now act in concert and sweep them out of Africa. Let them go back to Asia and the Middle East where I understand many of them come from.  As for some of the local Somali people that allow themselves to be used in this shameful way, our Somali brothers and sisters have the answer.  I personally, reject this new form of colonialism – through terrorism. Thank you very much. 25th July 2010 – Commonwealth Resort, Munyonyo, Kampala. 9

As usual, I will start my State of the Nation Address with the economy. This time, however, I will concentrate on only four aspects:

i) the recovery of the economy in the last 26 years;

ii) disagreement amongst us on the priority of allocation of scarce resources and the consequent delay in infrastructure development, with its implications for the delay of socio-economic transformation;

iii) sabotage of vital development projects by the indiscipline and, sometimes, selfishness of various actors, including some political leaders; and

iv) corruption as well as selfishness.

Before I talk about the above four aspects, I should also talk about the five reasons that have caused the recovery of the economy since 1986 to-date. These are:

i) security of person and property brought about by the NRM, but more especially by the discipline of NRA/UPDF;

ii) the Private Sector, whose investments account for about 77% of all total investments in the economy, including investments of our citizens of Indian origin (who contribute 25-30% of all the total investments);

iii) the macro-economic stabilization and liberalization of the economy, which enabled us to control inflation for a very long time and to free the Private Sector from bureaucratic interference;

iv) the ever-expanding consumer demand in Uganda and in the Region; and

v) some little support from Development Partners that enabled us to repair some roads, repair the Nalubaale power station, etc.

In particular, I would like to salute the former British Minister, Baroness Linda Chalker, who helped us to repair Nalubaale.

Most of these five are obvious and they need no explanation. The fact that people‟s property cannot be grabbed by soldiers and that Ugandans can no longer disappear without a trace needs no explanation. I will only comment on two of the five. These are the nature of the Private Sector that propelled our recovery and the support 4

from the Donors (Development Partners). Regarding the Private Sector that propelled our recovery, it comprises of three elements:

i) those engaged in services such as transport (matatus, boda bodas, buses, etc.), hotels, restaurants, beauty saloons, fuel stations, real estate and shopping malls;

ii) those engaged in light industry manufacturing for import substitution as well as some limited exports; and

iii) those engaged in trading, especially importing – the Kampala City Traders Association (KACITA) type.

Some of the industrial activities are linked with agriculture like fruits, juices, coffee, cotton, etc. Agricultural production has certainly contributed to the recovery of the economy. Three players in agriculture have done so. These are:

i) the plantation owners (sugar, tea and coffee);

ii) the big scale farmers; and

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iii) the medium scale farmers.

The subsistence farmers, who, according to the 2002 census, comprised 68% of all homesteads, still have much of their potential untapped because we have not yet mobilized them to do. The Mrs. Josephine Kizza‟s model farm is the solution to their problem.

Nobody here can claim that I have not exposed all of you to this fact. If all the 40 million acres of land of Uganda that are suitable for arable farming are put to their full potential, there will be a revolution in this country. Everybody will be richer – the families themselves, the Local Governments, the churches and the mosques and the country. Through our zonal meetings, we identified the packages of enterprises for each area according to the households‟ landholdings. Let all the leaders get moving on this one. 6

The first two elements of the Private Sector, i.e. those engaged in services and light manufacturing industries, are the most useful because they add value to the goods and services produced in Uganda. They are not like KACITA which concentrates on turning Uganda into a perpetual market for the products of foreign countries. This is where the future lies. We should have more and stronger enterprises of this type. These groups must be specifically encouraged. They should not be delayed in any way by anybody if we want our country to go beyond where we are now. Yet the economy cannot stay where it is now. This is because it is already being overtaken by the demand for jobs by the young people as well as the demand for dollars for imports.

As you know, the light manufacturing has been in sugar, soft drinks, beer, soaps, some little textiles operations, vegetable oils (Mukwano and BIDCO), fish processing, 7

cotton-ginning, coffee-hulling (removing the skin of the coffee berry), cement production, steel bars production (mitayimbwa), recycling of batteries, milk processing, fruit juice processing, plastics, etc. These light industries save or earn the equivalent of US$ 1,230 million for Uganda per annum. This category has got a lot of potential for expansion. If we could, for instance, stop the bad fishing practices on our lakes, deepen coffee processing beyond coffee-hulling to coffee-roasting and grinding, expand juice and milk processing, link the steel mills with the iron-ore deposits at Muko and Sukuru hills, etc, this economy would be totally transformed.

We have seen that among the categories of the Private Sector, the most useful ones are: agriculture, services (transport, banking, hotels, etc) and light industry. The perpetual importers of products that can be made here are not a positive element in the long run. As already mentioned, trading is partly positive if it involves internal

distribution in Uganda and exporting our products to the Region or beyond.

Importers, however, have caused chronic haemorrhage in Africa, especially because most of the imports are simply luxury goods, not production inputs. It is important to point out that, even when they are inputs for production, it would be better if most of them were produced in Uganda and if the local products are comparable in price as well as quality to the imported ones.

Light industry is the most promising of all these. It produces products that are, indeed, very much needed for human sustenance. These include transport, food, clothing, building materials, medicines for human beings, drugs for pest control and for livestock and so on. These are all basics for human life and their demand is durable. In addition, light industries produce weapons for self-9

defence and, then, a country‟s future is assured. These days, brains, in the form of computers, are the ones that operate machines – guiding them to do work. These are the sectors where the whole political and administrative groups should focus their attention. This is where the future of the country lies. In time, light industries will move into sectors of heavy industry such as steel manufacturing out of our good iron-ore deposits, fertilizer manufacturing, earth-moving equipment and so forth.

Yet, if you examine the sectors that have been growing fast in the last decade, you will find that they are the following: importing vehicles i.e. transport in that sense – not in the sense of manufacturing the means of transport here; beauty saloons; restaurants and hotels; bars; real estate; shopping malls and many others. These have been growing at the following average annual growth rates: banking sector – 17.2%; transport and communication services including mobile telephones – 14.3%; hotels and 10

restaurants – 8.8%; real estate – 5.6%; other business services (saloons, stationery sales, etc) – 9.7%. If you compare them with growth in manufacturing and agriculture, the figures are as follows: 6.5% and 1.4% respectively (period 2004-2011). All these, except for hotels, are characterized by little employment potential, no export earnings and low or no technology. This is where Uganda is now.

High rates of growth but in sectors that create little employment, bring in little or no foreign exchange and, actually, sometimes squander the little foreign exchange we earn from coffee, etc, in the form of inputs imported for their operations. This source of growth does not bring socio-economic transformation quickly. Their main attraction is that they are of low technology and require little capital to start-up. These are what the indigenous Private Sector can afford as of now. This is the paradox of the present economy of Uganda: growth without creating 11

enough employment and without earning enough foreign exchange but instead squandering the foreign exchange earned from coffee and other raw-material exports. I, therefore, think that it may be useful to distinguish between core industries that are a must in terms of sustaining human life and, then, peripheral or dependent industries that are either not as important as the other ones or dependent on the others to thrive.

The second category is easy to set up by the Private Sector as they have done in Uganda. The core ones need deliberate nurturing by the State even if they are done by the Private Sector. It is the country that needs them and not the Private Sector.

More often, you hear misnomers such as “factory y‟ omuyindi”. There are no Indians‟ factories in Uganda. The Indians‟ factories are in India even if they are built and 12

owned by non-Indians. What we have in Uganda are Ugandan factories operated or owned by Indian families. Those Indians are working for us. Those factories, by whomsoever, expand our GDP, not that of India. Whose raw-materials do they buy? Whose utilities (electricity, water, telephones, etc) do they use? Which market do they produce products for? Who benefits from their export earnings? Whose youth are employed by these factories – ours or the Indian ones? To which Government do they pay taxes? When you answer each of the questions above, you will discover that these are Ugandan factories and not Indian factories. That ignorant talk should stop.

The three sugar factories in Uganda i.e. Kakira, Lugazi and Kinyara save Uganda US$ 232 million in import substitution per annum. They paid 400 billion shillings in taxes in the Financial Year 2010/2011. They employ 19,000 Ugandans and engage over 200,000 people in indirect employment including out-growers, transporters, 13

traders, stockiest, etc. In the Financial Year 2010/2011, they earned US$ 41 million in export earnings. When all the three expand as they plan to, these factories will earn about US$ 60 million in export earnings and will pay over 600 billion shillings in taxes per annum. The three factories will also employ 25,000 Ugandans and produce a total of 450,000 metric tonnes of sugar per annum instead of the present 290,000 metric tonnes per annum.

What is planned for sugar should also be planned for coffee, milk, fruits, maize, rice, irish potatoes, beans, wheat, beef and so on. It should be the same plan for minerals, wood products and, of course, fish products.

This brings me back to the four factors I mentioned at the beginning of this speech, namely:

i) the recovery of the economy in the last 26 years;

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ii) disagreement amongst us on the prioritization of the allocation of scarce resources and the attendant delays in our infrastructure projects;

iii) sabotage of vital development projects; and

iv) corruption as well as egocentrism based on monetary gain or political opportunism.

Political opportunism involves failure to tell the people what the country needs and instead pandering to uninformed, wrong and populist positions. This is suicidal. Calling cancer „flu‟ is the surest way of killing the patient. Uganda needs more factories, not just beauty saloons, bars, fuel stations, boda bodas and taxis.

As already said above, I have talked about elements of a modernized Ugandan economy based on natural resources such as agriculture, minerals, fishing, wood products, tourism, etc. There are, however, also knowledge-based industries. These are products of the brain such as cars, machines, computers, processing formulae for food (value 15

addition), medicines, vaccines, etc. Fortunately, our people have designed an electric car. They have processed flour out of bananas. They have made juices out of our traditional foods and medicines out of our traditional medicinal herbs. They have made perfumes out of our traditional herbs (emigaju), etc. These have got huge economic potential – much more than coffee as a raw-material and the like. Scientific innovations and scientists in general must, therefore, be given priority, in terms of Government funding.

I have already told you the factors that led to the recovery of Uganda, namely:

security of persons and property;

macro-economic stabilization and liberalization;

expanding national and Regional demand;

the Private Sector that is responsible for most of the investments; and

some little Donor support.

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All these factors would, however, have assisted greater and faster expansion if we had dealt more decisively with the issue of infrastructure – especially electricity, roads and the railway. Depending on Donor support, we have done some roads, repaired Nalubaale, etc. However, socio-economic transformation needs much more than that. For example, to be where Malaysia is now, we need, at least 11,954 MW of electricity. With Bujagali, we shall be having only 781 MW. This will give us a kWh per capita of 196 compared to the one of the USA of 12,914. Although, we are still lagging behind other developed countries, we recognize that we have made progress in this area. In 1986, Uganda was generating only 60 MW and had a kWh per capita of 28. This was a big shame.

We must also tarmac all the major roads for both economic and political reasons. Depending on funding from foreign 17

sources is not enough. The only sure answer is to rely on our own means. Tax collection in 1986 was only 5 billion shillings. Our tax collection next Financial Year is projected at 7,132 billion shillings. In the Financial Year ending June 2012, we collected 6,169 billion shillings. It was shared out as follows:

1) Wage bill and allowances – 1,807 billion

2) Roads – 1,284 billion

3) Energy – 1,200 billion

4) Education – 664 billion

5) Health – 792 billion

6) Defence and Security – 407 billion

7) Local Government – 212.9 billion

As you can see, the wage bill takes about 1,807 billion shillings. This is the largest share in our budget distribution. Recently, I launched the construction of the Arua-Oraba-Kaaya road which will cost us 142 billion shillings including 10 billion shillings for compensating people‟s properties near the road. If, therefore, the wage bill was 1,000 billion shillings instead of being 1,807 shillings, 18

we would have saved about 800 billion shillings per annum for roads and dams. Over a five year period, we would have accumulated about 4,000 billion shillings. That would enable us to do about 29 roads like Arua-Oraba-Kaaya. What impact would this have on the economy?

According to Uganda National Road Authority (UNRA) and according to me, in my capacity as President who travels across the country quite often, there are 44 roads in Uganda with a total length of 3,466 kms that should be tarmacked. The list is attached as appendix I. The estimated cost is US$ 4,076 million or 9,791 billion shillings. UNRA puts these roads in two categories: A and B. There are 19 roads in category A. These need US$ 1,428 million or 3,435 billion shillings. These roads are the following:

1. Olwiyo-Gulu-Kitgum (167 kms)

2. Moroto-Nakapiripirit (92 kms)

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3. Muyembe-Nakapiripirit/Moroto-Kotido (193 kms)

4. Soroti-Katakwi-Moroto-Lokitanyala (208 kms)

5. Kapchorwa-Suam (77 kms)

6. Villa Maria-Sembabule (48 kms)

7. Mpigi-Maddu-Sembabule (135 kms)

8. Mukono-Kyetume-Katosi-Nyenga (74 kms)

9. Ntungamo-Kakitumba/Mirama Hills (37 kms)

10. Rukungiri-Kihihi-Kanungu-Ishasha  (74 kms)

11. Kyenjojo-Kabwoya (102.4 km)

12. Buwaya-Kasanje-Mpigi-Kibibi-Mityana (90 kms)

13. Hoima-Butiaba-Wanseko (111 kms)

14. Kayunga-Bbale-Galiraya(88.5 kms)

15. Kabale (Ikumba)-Kanungu-Buhoma (120.0 kms)

16. Ishasha-Katunguru (88.0 kms)

17. Kabale-Bunyonyi (6.0 kms)

18. Mbale-Lwakhakha (41.0 kms)

19. Atiak-Adjumani-Moyo-Afoji (104.0 kms)

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Today, I stand here with pride as one of the founders of NRM, ever since 1971, when we started the struggle against criminality and misrule in Uganda. As I have repeatedly told you, tax collection was only 5 billion shillings in 1986. It is now 7,000 billion shillings. If this money was distributed in a kiyekera (guerrilla) way, we could certainly do these roads ourselves – at least the 19 roads in the UNRA‟s category A that need 3,400 billion shillings. If the wage bill was only 1,000 billion shillings instead of 1,800 billion shillings, by saving 800 billion shillings per annum, we would accumulate 4,000 billion shillings in five years. This sum of money is more than enough to do the 19 roads we have been struggling with.

The clamour for higher pay by public servants and political leaders is, therefore, untimely and unfair to the 34 million Ugandans. Remember political and public service workers are only 300,000 in number. Even if you assume that each one of them has 5 persons under him or her, that would 21

put the figure at 1.5 million beneficiaries. How about the other 32.5 million? The correct thing to do, now that we have some money, is to serve the many before we serve the few. If we were patriotic and undertook a voluntary salary cut for a number of years, we would build these roads ourselves.

While I still await patriotic offers about the voluntary salary cuts, I have initiated some talks with National Social Security Fund (NSSF) regarding the possibility of borrowing some money from them to do some of the roads. The NSSF does not have that much money. It only has 2,800 billion shillings. Possibly, we could borrow something like 1,000 billion shillings from them. That would cover some of the roads but not all of them. 22

There are other funding options which we are looking at with some people in connection with European and Chinese Banks, with some foreign countries, etc.

With our oil, matters will be easier. We shall be able to fund the roads, the railway and the power stations easily using our own money.

For some of the roads, we may have to forego some of the expenditure items and concentrate on the roads instead.

In the meantime, I demand that the clamour for more pay and allowances by public servants and political leaders must stop so that we concentrate on the roads and power. The only public servants that deserve pay rise are the scientists because they contribute decisively to the economy and their contribution is unique. It is not easy to replicate. The promise we had made to the teachers and 23

other public servants of 250 billion will go ahead for at least this Financial Year. I feel very bad to see this 6,169 billion shillings we have succeeded in generating being used in a manner that does not build a higher threshold for our economy. Once we build a road, it will be there for 20 years. Salaries are monthly. Increment of salaries should wait until we have dealt with infrastructure or until our oil and gas are operational so that we can use the proceedings to fund infrastructure. Then, we can start moving again on wages.

I know inadequate salaries are also a challenge to the families of public servants. Uganda, however, is not like Europe. Many of the public servants have land at home and can grow food to supplement the yet small salaries until the situation improves. When we build the base of our economy, we shall all be better off. 24

Although I am not in favour of salary increases in the public service, there are two categories that are still left out. These are the councilors at the district level and the LCI Chairpersons. These persons monitor Government programmes, maintain security in villages and adjudicate cases. Yet, they have been getting very little or no facilitation at all. A provision of about 20 billion shillings per annum could cater for these two groups provided creation of new villages and new sub-counties stops.

Therefore, those who have been pushing for salary and allowance increases at this time, when we have not finished the base of the economy, are committing a serious mistake. The only people that should get salary increases should be the scientists, as I have already said. These are people we cannot easily replace. Yet we need them for the knowledge-based economy such as making cars, making computers, adding value to agricultural products, fabricating machines 25

and machine-parts, etc. I have already talked about this above.

Those who push for salary and allowance increases as well as endless travels abroad are the same ones that complain that this road is not done, that project is not done, etc. This is hypocritical and should stop. Our discipline of Buhekyera (guerrilla strategy) educated us in the art of first dealing with the core issues and then dealing with peripheral issues later. As bush fighters, I have always told you that we concentrated on the gun and its ammunition, the recruit and some food. The rest, including clothes, medicine, etc., would be got by attacking the enemy units. This is how we built our Army.

The core issues in this economy are:

defence and security;

law and order;

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electricity;

roads;

the railway;

piped water for the big towns;

education;

health;

tourism; and

scientific innovation.

With this foundation in place, we can, then, start looking at wage increases. It was not accidental that the salary of the President was 150,000 shillings between 1986 and 1996. It was deliberate. If one consumes little and invests more, the future will be guaranteed. If one consumes a lot and invests little, the future will be doomed. Spending prematurely on wages is really bad planning. It makes Government spend too much on recurrent costs, yet with capital projects, you spend only once and you do not repeat such expenditure for decades. 27

Since I am always under harassment for roads and electricity by people who at the same time agitate for higher salaries and allowances, as I have already pointed out above, I may resort to one alternative i.e. borrowing from NSSF to do some of the urgently required roads. We may have to give a ten-year bond to NSSF in order to get 1.4 trillion shillings to construct about ten good roads like Arua-Oraba-Kaaya. Internal borrowing should always be looked at before we look at external borrowing. Therefore, those who have been talking about the roads in the manifesto should know that these roads will be done in one way or the other.

I have spent a lot of time talking about two of the four factors I said were the main themes of this Address as far as the economy was concerned. These are: the recovery of the economy in the last 26 years and disagreements amongst us on the prioritization for the use of scarce resources. 28

There are two other factors I need to talk about briefly. These are: sabotage or delay of vital projects as well as corruption and selfishness. It is bad enough for villagers to not fully understand the importance of factories. It is a disaster for leaders to do the same while at the same time they are drawing salaries out of salaries paid by the very factories. We have had delays of factories in Lugazi, Amuru, Tororo, etc caused by this failure of leadership. This is not acceptable. If a leader has a criticism about the method of introducing a factory in one‟s area, bring out the criticism in a constructive manner, in the right forum, as you also quickly bring forward a solution. There should be no acrimony, no delays because this is our factory.

Do not deceive yourselves that investors are dying to come here. They have got many places to go to. I attracted BIDCO to come to Kalangala. After some hassles, they 29

started. Kalangala is now completely transformed because of their effort. They, from the beginning wanted to expand since they have idle machinery here. As usual, there were delays by the system here manned by people who do not know where the future belongs. Meanwhile, BIDCO has already got 70,000 hectares of land in Nigeria where they are going to produce 350,000 metric tonnes of palm oil. This is compared to 16,000 metric tonnes of palm oil produced in Kalangala where Government gave them 6,200 hectares of land plus 2,800 hectares of land from out-growers. Who is the loser? Certainly, not the investor. The ones tied to an under-developed Uganda are not the investors; it is the Ugandans, especially the poor ones who cannot go for greener pastures. The investors are mobile with their money.

All the Ugandan leaders must learn how to „kwogeleza‟ (to woe) as we do with brides when it comes to investors. You do not hold press conferences to discuss the issues with 30

your intended bride. Matters are discussed confidentially and with respect. You may not agree, you may modify arrangements, but it is all done with seriousness and courtesy. If you can do all that for a single bride how about this country of 34 million people? Are we not condemning to doom the future of this „bridegroom‟ by our conduct, we, his agents? Nevertheless, the officials who handle these should also be serious. Ask the right questions quickly. Who is the legal owner of this land? If there are bibanja-owners, how are you engaging with them? If there are illegal squatters, how do we handle them? Handle issues thoroughly, knowledgeably but firmly and fairly. Knowledge creates confidence and firmness in decision making.

There is the issue of corruption and selfishness. Some of the frustrations to the investors are caused by corruption. Investors are harassed for bribes by these traitors. I do not know why the investors do not report this. I intend to 31

bring a law to punish severely those who endanger our future on account of corruption, selfishness and opportunism.

Before I leave the sections on the economy, I would like to touch, briefly, on how the economy has performed since last year. You remember, soon after the elections of last year, the economy hit what I had long anticipated – some bad times. Owing to some drought but also due to increased Regional demand (which itself is a great opportunity for the region and serious producers), commodity prices went up. This was also due to increased world prices owing to the emergence of bigger middle classes in China, India, Brazil and to some extent, in Africa. As I told you in my previous speeches, it is, actually, good news for serious producers. On account of increased construction in the world, price for steel has gone up, price for sugar has gone up globally because of increased demand and so has the price of petroleum 32

because of more people in the world, including Ugandans who are driving cars.

Additionally, the economies of the West are in decline because for long they have been leading an affluent lifestyle at the expense of the rest of the world especially Asia, Africa and Latin America. Prior to the emergence of China, India, Brazil and to some extent some parts of Africa out of poverty, much of the global resources were only supplying the West. That is why in the 1990s, when I was trying to market our steel in Muko near Kabale and Sukuru hills near Tororo, I was told that there was too much steel in the world, that there was a “steel glut”, as a consequence of that there was nobody willing to invest in iron-ore processing. At that time, the price of a tonne of steel was US$ 200. By last year, a tonne of steel had gone up to US$ 900. Why? It is because steel which was previously being used by only a small population of the world for construction of houses, making cars, etc., is now being 33

used by billions of the world population. This is good news for Africa and for Uganda. Indeed, in 2011, we earned US$ 449 million from the export of coffee against US$267 million which we earned in 2010. In previous years, we earned as less as US$ 120 million annually from export of the same amount of coffee.

Therefore, Uganda had a lot of opportunities. On the one hand, Regional demand was going up and, on the other hand, prices for our commodities were also going up globally. The only negative aspect was that the consumption in Europe and USA was going down. We could, however, not fully take advantage of these opportunities because of previous mistakes committed against my advice and my entreaties to the various power centres. Particularly, relevant for these problems were the delays of Bujagali and sugar factories in Lugazi and Amuru. Instead of taking advantage of the Regional 34

demand, the prices went up for the consumers. The price of sugar went up to about 10,000 shillings per kilogram.

The charlatans went into full gear. “The NRM Government has failed”. “They are useless”. I took time and explained to Ugandans on the radios and also explained to the NRM leaders at Kyankwanzi. You can go back and refer to my speeches and see that there is nothing I predicted that has not turned out to be true. The price of sugar is now at 3,000 shillings per kilogram. The exchange rate that had gone to 2,800 shillings per dollar has been hovering around 2,450 shillings per dollar, etc. Yet, we have not completed dealing with the real bottlenecks except electricity which is beginning to work out miracles in the economy. With just three turbines operational at Bujagali, i.e. 150 MW of the 250 MW total, there is already a remarkable change. I am told that industrialists are already very excited. They have shut down the standby generators that were causing them to „bleed‟ so much. This is just the beginning. The 35

Banyankore say: Ekihambo kirakutambire kikubanza obutuutu – the pumpkin plant that will solve your hunger problems starts by giving you the young pumpkins. English is a poor language; you cannot easily translate these very precise statements. What, then, will happen when Lugazi is expanded, Amuru is built, Sango Bay is built, Ziwa Ranch is turned into a sugar-cane plantation, Casement sugar in Kaliro starts, irrigation around the Rwenzori and the Elgon areas are expanded and we start using fertilizers, etc? The sky is the limit!

Nevertheless, I should not forget to say “shame to the charlatans”, “shame to the liars”, “shame to the opportunists”.

Before I conclude this section, I would like to add that Besigye‟s lawlessness added to the problem of the relative scarcity of the dollars hence the loss of value of the Uganda shilling. The fujo and the false stories that were being sent 36

out of Uganda scared tourists for some time. This meant less dollar inflows, dollar appreciation and more difficulties for KACITA, the importers. However, for exporters and those who are dependent on local production, it meant more opportunities. Whenever you would export, you would earn more because a dollar was giving you more shillings. It should, however, be sacrilege to have political actors who tell lies about the destiny of Ugandan people.

The Minister of Finance, in the budget speech, will deal with the short-term and medium-term tactical issues that are meant to further help the economy. I have been dealing with the strategic issues in this speech.

Apart from the economy, the other issue has been the indiscipline of Dr. Besigye and a small clique of his. I congratulate the Parliament of Uganda for administering democratic political kiboko to the Forum for Democratic Change (FDC) during the East African Legislative Assembly 37

(EALA) elections. I congratulate all the candidates that were elected – NRM and non-NRM. The egocentrism of Dr. Besigye and his group has totally isolated them from all positive thinking people. Once you pass the Public Order and Management Bill and I sign it, the fujo will stop. I congratulate the Police for defeating this conspiracy by Dr. Besigye of attempting to overthrow the Constitution by insurrection.

The Police was able to protect people‟s property in the markets and shops from looters organized by Dr. Besigye. Unfortunately, there were some deaths including that of a Police officer. The Public Order and Management Act will make all this impossible. There is, however, some laxity in the legal system. Why should any judicial officer release on bail somebody who has repeatedly abused the terms of the bail? Is this not an abuse of office? Is this not possibly corruption? 38

The media is also another corrupt, irresponsible and unprofessional group. Some of my supporters have been asking me for money to bribe characters that are called DJs so as to get favourable coverage in the media. I told my supporters that I would never give them that money. It is the duty of every Media House (radio, TV or news paper) to ensure that they give balanced and objective coverage of any story. It is an obligation on them and not a favour to the public. Any Media House that does not do it will lose out. I will show you how if they continue. We do not have to bribe anybody. The power of licensing belongs to the State. The State of Uganda has got a historical mission: Nationalism, Pan-Africanism, Socio-economic transformation and Democracy. It is the duty of every Media House to further these aims. I hope they will listen to my advice. 39

Otherwise, the country is peaceful. The UPDF is much stronger than ever before. There are only a few gaps in our overall defence, which will be closed in the coming years‟ budgets.

Ugandans have relaxed on HIV/AIDS. I hear the prevalence rate has gone up to 7%. More dangerously, new infections were 129,000 in 2011 up from 115,000 in 2007. This is an increase of about 3,500 new infections per annum. What a big shame! Why should anybody get HIV/AIDS today when all the information on prevention is available? HIV/AIDS only is transmitted through promiscuity. Close this gap. Some of the interventions cover up this failure. Anti-promiscuity measures must be emphasized.

Madam Speaker, I congratulate you, your Deputy and Hon. Members upon completing some of the work of Parliament 40

over the past year, who as at 21st May 2012 had been able to transact business as follows:

(i) Bills passed – 11

(ii) Motions for Resolutions – 40

(iii) Reports considered and adopted – 23

(iv) Petitions considered – 20

(v) Ministerial Statements presented and debated – 35

(vi) Other Statements – 15

(vii) Questions for oral answer responded to – 07

Among the Bills passed were:

(i) The Companies Bill 2009.

(ii) The Prohibition and Prevention of Torture Bill, 2010.

(iii) The Uganda National Meteorological Authority Bill 2010.

(iv) The Transfer of Convicted Offenders Bill 2007.

I thank you Madam Speaker, Your Deputy, Hon. Members and the Technical Support Staff for what you have been 41

able to accomplish during the last twelve months. Since quite a number of Bills are still pending, I request the Business Committee to look at what is pending and sort out what can be fast tracked.

A list of Bills from Ministries/Departments which may be presented to Parliament during the next twelve months is appended hereto. (Appendix II).

Finally, I congratulate the Honourable Margaret Zziwa who as elected as Speaker of EALA the other day. There was some confusion in the Newspapers that there was an NRM official candidate. There was no official candidate because the NRM Caucus had not chosen one.

I thank you very much.