Speech on:

Ugandas Vision to Transform from a Predominantly Peasant Society into a Competitive Upper Middle Income Country by 2040

By
H.E. Yoweri Kaguta Museveni President of the Republic of Uganda At the Launch of Uganda Vision 2040

Kololo Independence Grounds

18th April, 2013

His Excellency, the Vice President, The Honourable Speaker of Parliament, The Honourable Chief Justice, The Right Honourable Prime Minister, Honourable Ministers, Honourable Leader of the Opposition, Honourable Members of Parliament, Head of Public Service, Your Excellencies, Ambassadors and Commissioners, Religious and Cultural Leaders, Dr. Kisamba Mugerwa & Staff of National Planning Authority; Distinguished Ladies and Gentlemen. High

Our

Banyankore

people

say:

Otoomize

tahwa

ikaranga. This translates that if your millet takes long to dry, you continue roasting it until it dries . Our Baganda people say: Addingana amawolu yaggagyamu omukkuto translates as a person

who

eats

cold

meals

of

the

previous

night

repeatedly, eventually gets satisfied. The NRM, right from the bush days, was clear on the issue of socio-economic transformation. Point Number 5 of the NRM Ten-Points Programme said as follows: Building an independent, integrated and self-sustaining national economy. would produce raw materials which This meant that agriculture, mines, forests and lakes industry (factories) would turn into finished products so that we would end the phenomenon of Uganda exporting raw materials where we lose both money and jobs. I have always given you the example of coffee. Throughout the last century until today, Uganda has been exporting bean-coffee (empeke). As a reward for that effort, Uganda gets one American dollar per kilogram. Last year, we got US$ 3 per kilogram because the coffee prices were high globally. When Nestle roasts and grinds the same coffee in London,
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they get US$ 15. If you assume that US$ 0.20 per kilogram is for transport, the rest of the US$ 15 is money Uganda should get. Therefore, Uganda donates to the U.K. US$ 11.80 in every kilogram of coffee we sell (although the US$ 11.80 per kg includes
processing and handling costs in London, it is still money donated to them). This story of coffee is repeated for

other products such as cotton, maize, cattle, goats, minerals, bananas, etc. The GDP of Uganda will soon be US$ 25 billion. That is the same size as the GDP of Nigeria in the year 1992 or twice the size of the GDP of Kenya in the year 2006/07. It is quite a long journey from 1986 when the GDP of Uganda was US$ 1.5 billion. By adding value to the raw materials we are exporting now and what is consumed raw now, even at the level of todays production, the size of Ugandas GDP could grow to US$ 300 billion, bigger than the size of Singapores GDP of US$ 276 billion in 2012. This size of economy would create more jobs, provide more
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products and generate more taxes.

Therefore, the

NRMs instructions to the Government system in 1986 was clear plan for the transformation of Ugandas economy into an integrated, independent and self-sustaining one. It took a bit of time for me to realize that the Government system (some of the political class and the bureaucrats) did not know how to do this. In any case, some time was needed to deal with the informalization of the economy that had set in between 1971 and 1986 by stopping the currency speculation (the foreign currency black market kibanda), the smuggling (magendo), the speculation in goods (kusamula), etc. These re-formalization and stabilization enough. system. measures were achieved quickly Thereafter, the achieving of our Vision

needed further clarification for the Government

Some of the political actors, acting out of lack of exposure, did real damage to the economy by, for instance, stopping the Bujagaali hydro-power project in the year 2001. After some reflections, I discovered where the problem was in terms of charting the way forward not only for Uganda but for most of Africa. I realized that we could not achieve our goal of building an independent, integrated, self-sustaining national economy if we did not deal with these strategic bottlenecks that I have repeatedly told the country about. These are:
1. Ideological disorientation typified by political actors in Africa taking sectarian positions religious, ethnic, gender, etc. 2. 3. Inability to restructure the colonial state; Stifling of the Private Sector;

4.

Undeveloped human resource, which were not skilled and were not healthy. Such populations could not power socio-economic transformation;

5.

Inadequate infrastructure that causes the costs of doing business in the economy to go up, thereby rendering our products uncompetitive and undermining the profitability of investments by having the said high costs;

6.

Small internal markets in the respective countries on account of the colonial balkanization.

7.

Lack of industrialization and exporting raw materials instead of exporting finished products.

8. 9.

Undeveloped services sector. Under-developed agriculture.

10. Lack of democracy.

We had to distil these for the Government system. It was not enough to assume that the Government system would know what to do by themselves. Why have all the others in Africa not known this all these 50 years since independence? Even in some of the countries that have been peaceful all the time since independence, these strategic bottlenecks have not been clear. It is no accident that it is only in South Africa and Gaddafis Libya that we have had a kWh per capita of 4,270 and 4,803, respectively. Ugandas kWh per capita in 1986, was 30. It is now 150 kWh. As I have told you repeatedly, the kWh per capita of the USA is 12,400. I am, therefore, most pleased today because, finally, one is Agency fully in of the Government, with our the National if they Planning Authority (NPA), has evolved a position that harmony Vision incorporated the amendments I forwarded to them. I have not read the final version of their write up. I
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read the draft version to which I added what they had either not included or what they needed to clarify further. The Vision says that in order for Uganda to become an upper middle income country by 2040, we need to generate 42,000 MW of electricity from all the hydro sources, the petroleum and gas sources, the geothermal (ebitagata) sources and the nuclear sources using our abundant uranium. We need to revamp and up-grade the railway system to standard gauge; bituminize much of the road network; utilize the water transport system; develop our oil and gas resources; implement the flagship projects of the phosphates in Tororo, the iron-ore project in Muko; etc; not only continue to educate enmasse all our human resource but skill them also; modernise agriculture through the use of fertilizers and irrigation; and modernize the services sector e.g. banking, hotels, tourism, insurance, etc. In other
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words, the NPA is, finally, talking about the strategic bottlenecks and talking the language of Point No. 5 of the NRMs Ten-Points Programme. In the last 27 years, the NRM has worked for solving the strategic bottlenecks or addressing them in part. We have addressed the issue of markets by working with our partners in East Africa and COMESA regions. We have also worked with the USA, EU, India and Japan on the issue of market access, tariff-free and quota-free. We have sent all Ugandans to school through UPE and USE even when we did not have enough resources yet. We have started addressing the question of power (electricity), the roads and the railway by converting our Engineering Brigade of the Army into a railway building force, among its other tasks. This is on top of ensuring security in the whole country and democratising the country.

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We are now set to move. Let all budgeting reflect the gains of this plan. We need US$ 200 billion to implement this plan. With our oil, this will not be a problem. Even without oil, but with discipline, we would have raised the money to implement this plan. Using our own money, apart from the usual tasks of paying salaries, supporting defence, etc., we have been able to fund the reconstruction of MasakaKampala road, Kampala-Mityana road, Jinja-Kamuli road, the rehabilitation of Kawempe-Kafu road, Tororo-Soroti road, etc. We are now building MorotoNakapiripirit road, Mbarara-Kikagate road, IshakaKagamba road and we have road. already The finished Matugga-Semuto-Kapeeka starts with a high hair line). There is one tactical bottleneck, which must be dealt with. This is the issue of hostility to the Private Sector by elements of the political class and the
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Banyankore

say: Entandikiriro yoruhara nebyeyera (balding

bureaucrats.

Much of the wealth is created by the

Private Sector (shops, hotels, farms, factories, mines, etc.). When I addressed Parliament sometime ago, I told you that there were two modern kings: the consumer and the entrepreneur. no consumers to buy what we The consumer produce, our provides the market of what we produce. If there are businesses cannot survive. On the other hand, the entrepreneur encapsulates three elements: entrepreneurial eyes to see opportunity where others have not done so, knowledge on how to exploit that opportunity and savings to use in exploiting that opportunity. Are such people abundant in Uganda? If they are, why has Uganda, indeed, why has the whole of Africa, not developed all this time to become first World Countries? It is, therefore, criminal for anybody to mishandle It is a entrepreneurs either internal or external. betrayal for the country.

Whose interests are we

working for if we do not nurture and support the

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efforts of entrepreneurs?

When an entrepreneur

executes a project, he helps us to address the issue of jobs, products of goods and services, foreign exchange inflows or import-savings, tax generation for the State and, therefore, increases Governments ability to pay salaries, provide health care, build roads, build schools, etc. It is, therefore, criminal to delay an entrepreneur or to ask for bribes from an entrepreneur. promptly. The only aspects to be considered should be: the ability of the entrepreneur to implement the project, if there is any damage to the environment and if the products are safe for the consumers. The last aspect is the work of Uganda National Bureau of Standards (UNBS). None of these should delay a project even for a week because those products are well known and there are standard ways of assessing them. How much effluent does a milk factory of this capacity
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All projects must be implemented

produce? How is it handled elsewhere? Why should, then, a project be delayed? Private Sector by both the The hostility to the political and the Even in the past,

bureaucratic classes is not new.

there were bouts of those mistakes culminating in Amins economic war against the Asian Ugandans. In reality it should be better called Amins economic disaster. Uganda will become a lower middle-income Country by 2017 and an upper middle-income Country by 2032. We are, finally, harmonized with the National Planning Authority. Let all elements of the political class and the bureaucratic class be similarly aligned. Uganda is unstoppable. It is now my pleasure to launch the 2040 Vision. I thank you.
18th April 2013 Kololo Airstrip, Kampala 14