M7 Blasts Donors Over Aid Cuts

President Yoweri Museveni yesterday hit out at donors accusing them of using ‘high handedness’ when they cut aid to Uganda over the corruption scandal in the office of the Prime Minister.

“Those development partners who cut off aid because we discovered corruption used a high-handed approach” the President said. He added that even though this happen, the economy was still able to grow saying “Despite the AID cuts the economy grew by 5.1%”.

The President made these remarks yesterday while delivering his budget speech at Uganda International Conference Centre Serena.

He said the ruling National Resistance Movement (NRM) was spearheading the war on graft

NRM has started the war on Nepotism, Bribery and misuse of office” the president said

Below is the president’s full speech:

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,

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 (6.8%); services (4.8%); and construction (8.4%).  The manufacturing sector grew by 4.2% (2012//13).  Agriculture grew by 1.4% (2012//13).  This is good but could have been much better. As you can see, sectors like telecommunications and construction grew very fast.  This is because of the correct policy of liberalization that we put in place in 1987 and subsequently.

 

By liberalizing the telecommunications sector in 1997 (when Parliament passed the Communications Act), 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 supply of electricity.  During those years, the manufacturing sector was growing by an average of about 9% per annum.  Between the years 2005 and 2012, we had inadequate electricity supply.  During those years, the manufacturing sector was growing by an average of about 7%.

 

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 rate 3.6%; total GDP is US$ 22 billion (exchange rate); or US$ 51 billion (PPP); export earnings US$ 4.9 billion; remittances US$ 767.26 million; imports US$ 7.45 billion; investment inflows   US$ 1.47 billion; overall balance of payments (a surplus) of US$ 416.63 million; foreign exchange reserves US$ 3.3 billion.

 

These are good figures, especially, compared to our starting point in 1986.  The comparative figures were: GDP rate of growth 0.6%; size of GDP was US$ 1.55 billion; export earnings were US$ 411 million; inflation rate was 144%; investment inflows were US$ zero (between 1987-1993 they grew to US$ 9 million, annual average); foreign exchange reserves were US$ 16 million.


 

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 travellers are still waiting for him.’

 

When we say that the GDP of Uganda is now US$ 22 billion, we should not forget that the turnover of Samsung Company is US$ 32 billion per annum.  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 Wal-mart is US$ 220 billion per annum.  Uganda is growing, Africa is also 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 delays 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 that 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 the Office of the Prime Minister, from the Ministry of 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 to do it.  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% from 30% (2011) and the reserves stand at US$ 3.3 billion.  This proves what the Bible says in Mark 7:15: “It’s not what goes into your body that defiles you; you are defiled by what comes from your heart.” It is our internal weaknesses that need to be addressed.

 

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. 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 will be done 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:

1)  Nyakaita-Kazo-Ibanda

2)  Fort Portal-Bundibugyo

3)  Vura-Arua-Koboko-Oraba

4)  Ntungamo-Kabale-Katuna

5)  Gulu-Atiak

6)  Atiak-Nimule

7)  Kampala-Entebbe Expressway

8)  Moroto-Nakapiripiriti

9)  Kigumba-Masindi-Kabwoya-Kyenjojo

10)              Masaka-Buukakata

 

The ones that will be handled by the Government of Uganda are the following:

1)  Olwiyo-Gulu-Kitgum-Musingo

2)  Mukono-Kyetume-Katosi-Nyenga

3)  Musita-Lumino-Busia/Majanja

4)  Mubende-Kakumiro-Kagadi

5)  Mpigi-Maddu-Sembabule

6)  Sembabule-Villa Maria

7)  Kafu-Gulu

 

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

1)  Kampala-Masaka

2)  Busega-Muduma-Mityana

3)  Malaba-Bugiri

4)  Kawempe-Kafu

5)  Tororo-Mbale

6)  Mbale-Soroti

7)  Jinja-Kamuli

8)  Hoima-Kaiso-Tonya

 

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 kilowatt-hour (Kwh) per capita of selected countries in the world today:

ELECTRICITY CONSUMPTION FOR SELECTED COUNTRIES

Country:

kWh/capita

USA                     

12,914

UK

5,467

France

7,023

Egypt

1,304

China

3,494

India

498

South Korea

9,314

Nigeria

107

South Africa

4,347

Libya

4,078

Niger

38

Chad

8

Kenya

133

Uganda

150

Tanzania

73

Rwanda

20

Burundi

26

Source: Internet

 

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 print media 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 i.e. 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.  That is why, for instance, West Nile and West Acholi have got 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 wood fuel 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 informed 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.

 

 

UICC, Serena            -                  13th June 2013

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