New Year 2010
Address to the Nation
By
H.E. Yoweri Kaguta Museveni
President of the Republic of Uganda
31st December 2009
Countrymen,
I congratulate you all upon the completion of the year 2009. There have been a lot of developments and achievements at individual and corporate levels; and there have been losses. I wish to commiserate with all those who have had problems of one kind or another in the course of the year.
May I please take this moment to, in particular, express most heartfelt condolences to all the people who lost their loved ones during the past year. May God rest the souls of the deceased in eternal peace.
Government continues to be guided by the national vision, towards achieving a Modern, Industrialized and Knowledge- based Society with strategies for transforming this country from an underdeveloped to a developed nation status. The year 2009 may be designated as transitional period during which we have examined what we have attained under the Poverty Eradication Action Plan (PEAP) for the last ten years.
As we refocus and re-engineer the economy to attain faster socio-economic growth, we have formulated a five-year National Development Plan that intertwines strategies that will ensure both accelerated economic growth and sustained poverty reduction. The thrust is to consolidate the achievements we have made and move forward in a planned quasi-market economy approach. This will entail strengthening public-private partnerships in all development aspects of the economy. The government expenditure will also increase from Shs 7.9 trillion in 2010/11 to Shs 13.9 trillion in 2014/15, targeting investments in key areas of infrastructure (roads, railway, hydropower dams and oil refinery), education, health, Agriculture and Tourism.
At an appropriate time, I will brief the Nation on the detailed strategies to be undertaken to unlock the identified national binding constraints to enable us to attain faster socio-economic transformation, accelerated private sector growth and meeting the Millennium Development Goals.
However to highlight, a few, we have identified key flagship projects to provide impulse to unlocking the binding constraints within the economy. These include:
(i) National Skills Programme;
(ii) Constructing the standard rail gauge;
(iii) Rehabilitating the existing railway lines;
(iv) Development of Greater Metropolitan Kampala and implementing the rapid transport system;
(v) Improve water transport on Lake Victoria;
(vi) Construction of three Hydro-electric power stations (HEPs) namely Karuma, Ayago and Isimba;
(vii) Development of oil and gas refinery;
(viii) Construction of Oil and gas pipeline;
(ix) Development of ICT business parks;
(x) Construction and development of 4 regional incubation centres;
(xi) Construction and development of five large scale irrigation schemes;
(xii) Construction and development of phosphate industry in Tororo;
(xiii) Development and Production of Iron Ore ingots for steel industry; and
(xiv) Supporting science innovation in the Universities and Research Institutions.
We shall continue our firm stance of reducing poverty to 24.5%, a target that is better than the Millennium Development Goal of 28.1%. The nominal per capita income will increase from US$506 to US$900 by 2014/2015 while our wealth creation thrust will ensure a generation of more than 2,700,000 jobs.
DEVELOPMENTS IN THE ECONOMY
Economic Growth
The Ugandan economy has continued to grow at a relatively high rate despite fears that the economic chaos in the advanced economies of the world would negatively affect the economy. Preliminary data from the Uganda Bureau of Statistics indicate that the economy grew by 6.6% during calendar year 2009, increasing from 28.2 Trillion Uganda Shillings in 2008 to 33.0 Trillion Shillings in 2009. This is equivalent to US$ 16.2 billion. Although this estimated growth rate in 2009 is lower than the growth in 2008 of 9.2%, it was among the fastest in the world during the period of global economic downturn. Uganda’s economic growth would have been even much higher if it had not been for the global economic recession that affected the demand for our exports to Europe and America; and if it was not for the shortage of electricity and bottlenecks in the transport sector, which we are working on.
An economy of US$16.2 billion is, of course, still very small by World standards. However, it is important to note that only some years back, in our time in Government, only the economy of Kenya had a GDP of US$ 12 billion. About the same time, the economy of Nigeria was about US$ 20 billion. Therefore, those of us who had the duty to lift Uganda from the pit into which it had fallen have nothing but happiness to see this growth. With increased electricity supply and better transport network, the economy is going to gallop. Value-addition to most of our raw materials will cause this economy to increase by a factor of ten in the next few years. Here, I am not including the factor of oil. When one does that, you can be sure that this economy will gallop.
Recently, the IMF noted the following regarding our economy: “Prudent economic management and strong fundamentals have enabled Uganda to weather the global crisis relatively well. Despite a slowdown in economic activity, growth remains strong by regional and international standards. Core inflation has declined in spite of an increase in headline inflation driven by higher food prices. The external current account has performed better than expected, buoyed by strong cross-border exports, and international reserves remain adequate. Uganda’s flexible exchange rate regime has facilitated adjustment to external shocks. The financial sector has been largely spared by the crisis and remains sound.”
Although the decline in the construction sub-sector undermined the overall growth of industry as a whole, manufacturing is estimated to have registered a growth of 10.6% during 2009, compared to 6.9% in 2008 and 7.6% in 2007. Construction was affected by the high increases in the cost of building materials earlier in the year. The increased cost of building materials was partly the result of a decline in cement production early in the calendar year. However, cement production increased in the months of August and September 2009.
This was complemented with a substantial increase in the importation of cement in the 3rd quarter of 2009, from 110,000 tonnes in the quarter ending June 2009 to 197,000 tonnes in September 2009. The prices of building materials including cement and steel have now stabilized and we should see a resumption of growth in the sub-sector.
Preliminary data also shows that other sub-sectors in industry, apart from the Mining and Quarrying sub-sectors, performed reasonably well with food processing recording an annual growth of 17% in the quarter ending September 2009; in addition to strong growth of 36% and 23% in the first and second quarters of 2009 respectively. The textiles, clothing and footwear category of industrial production also recovered with a growth of about 100% in the quarter ending September 2009 compared to the same period in 2008, on top of a 25% annual growth in the quarter ending June 2009.
Growth in the agricultural sector has also rebounded steadily and is estimated to have grown by 3.4% during 2009 compared to annual growth rates of 2.3% in 2008 and only 1.7% in 2007. This recovery in the agricultural sector is attributed to high performance in the cash crops sub-sector, which is estimated at 12.1% in 2009, in addition to an equally high growth of 11.6% in the previous calendar year. The increased cash crop production is partly due to the Government efforts to make available improved high-yielding agricultural inputs through NARO and NAADS. Farmers are now able to purchase high-quality seeds that have been produced in partnership with commercial farmers; and have in fact now outstripped the available improved seed supply capacity.
Fish production continued to decline in 2009, mainly, as a result of action Government had to undertake to replenish fish stocks which had been depleted by poor fishing practices and inadequate regulation. This has also affected fish exports particularly to the regional markets.
The service sector continued to sustain high growth rates and is estimated to have grown by 8.2% during calendar year 2009. Transport and communications grew by 11.1%, while financial services and real estate are estimated to have grown by 34.7% and 5.7% respectively, in the same period. As a consequence of the high growth in services, the Service sector now contributes about 50.4% to total GDP. The sustained high growth of the Service sector and manufacturing is an indication that economic transformation for employment creation and, therefore, poverty reduction, is progressively taking place.
Since the economy suffered the worst power crisis about five years ago, Government interventions in the energy sector, including provision of subsidized power from thermal sources and the commissioning of power in the small renewable energy plants have yielded significant benefits for the economy.
Currently, power outages are much less frequent than they used to be five years ago. Consequently, the electricity supply is estimated to have grown by 10.9% during 2009 compared to only 1.7% in 2008 and a contraction of -13.8% in calendar year 2006.
Developments in the External Sector
The clearest indication of the resilience of our economy to the global economic recession that devastated large economies of the world is reflected in the developments in the Uganda external sector. Total exports for the 12 months ending October 2009 were equivalent to US$ 3.413 billion compared to US$ 2.80 billion in the same period a year before. This represents an increase of 21.9% in total export receipts during the period. Informal cross-border exports increased by 73%, largely driven by the export of industrial products to Southern Sudan and DRC, which increased by 80.4% compared to the year before.
In nominal terms, Informal Cross-Border Trade was equivalent to US$ 1.696 billion compared to US$ 940 million in the year before. Formal exports mainly to Europe and America recovered slightly in 2009, reflecting a recovery in the global economy. As a result of the increased exports, driven largely by Informal Cross-Border Trade (ICBT), the overall trade deficit was narrower than what was recorded in the same period in 2007 and 2008.
In addition, workers’ remittances have rebounded strongly in the months July to September 2009, averaging about US$ 72 million per month on average compared to about US$39 million per month on average between January and June 2009. Similarly, Foreign Direct Investment (FDI) has also fully recovered to an average of US$84 million per month in the quarter ending September 2009 compared to a low average of US$ 53million per month in the period October to December 2008.
The total foreign exchange inflows for 2009, excluding FDI, are US$ 4,818.18 million (export of goods US$ 3413 million, export of services US$ 693.65 million; and Remittances US$ 711.44 million).
At the peak of the global financial crisis that also temporarily affected our capital markets, there was short-term capital flight of US$190 million in October 2008. However, due to the strength of the economy, the trend has reversed with the quarter ending September 2009 registering a steady positive growth. A combination of the improvement in exports, remittances, Foreign Direct Investments and short term capital inflows resulted in a substantial increase in foreign reserves. By October 2009, total foreign reserves amounted to US$ 2.8 billion, equivalent to 5.6 months of imports of goods and services, compared to United States Dollars 2.35 billion recorded in October 2008. These trends are a manifestation that the Uganda economy has passed the worst effects of the global economic down turn and it is poised to sustain its high growth trend in the medium term.
As a result of the increased foreign exchange inflows through increased exports, remittances, Foreign Direct Investment and a return of short term foreign capital, the Uganda shilling has regained its strength it had lost towards the end of 2008 and first half of 2009. From an exchange rate of about Uganda Shillings 2,200 to the United States Dollar at its weakest in the early months of 2009, the exchange rate in November averaged Uganda Shillings 1,874 in November 2009. The resilience of the Uganda shilling is a manifestation of the strength of our economy, good economic management as well as the positive economic outlook that investors have of the economy.
Inflation and Interest Rates
Inflation, which is a measure of the changes in the general price level of goods and services, dropped to 12.0% in November 2009, compared to the annual inflation rate of 14.7% in November 2008.
The underlying or “core” inflation, which excludes food crops, fuel, electricity and water – because these are prone to volatile price fluctuations – also dropped to 8.8% by end November 2009. Inflation rates fell further in December 2009, to 10.9% and underlying inflation to 7.4%.
Food prices which were the main factor keeping overall inflation at double-digit levels increased by 35.5% on an annual basis by November 2009. However, this was lower than an increase of nearly 50% in the September 2009. While food inflation is still too high, it underlies the urgency in ensuring that the measures to increase agricultural production are implemented quickly and effectively. The food items which recorded significant reductions in prices during November include: fresh vegetables, beans, chicken, fish and milk, due to their increased supply to the market.
Domestic Revenue Collection
Domestic revenue collections by the URA were 97%, relative to the target for the five months from July to November 2009. This amounted to a shortfall of about Ushs 51 billion over the same period. The tax revenue shortfall was primarily on account of slightly lower imports than was estimated for the period. In the long term, and in the context of the East African Customs Union, emphasis on domestic revenue collection will be given to strengthening domestic production especially industry and services so that the economy’s reliance on international trade taxes is reduced. This strategy will also reduce the vulnerability of our revenues to external shocks. Hence, the long-term solution to ensuring predictability of domestic revenue is to improve the productivity of our economy to increase the tax base. In this regard, efforts to further improve the business climate in order to attract more investors through the delivery of quality public services will remain a key priority of Government.
DEVELOPMENTS IN SELECTED PRIORITY AREAS
As I have said previously, the National Resistance Movement Government has made tremendous achievements in restoring peace and improving the delivery of public services towards the development of Uganda. This has created a firm foundation on which we can now develop Uganda into a modern state as compared to the dismal basket case it was for the years during misrule and poor management imposed by bad governments.
The following are the achievements that the NRM Government has made in the delivery of public services, as well as the programmes for the near future:-
A: Infrastructure Development:-
Transportation Infrastructure
With respect to road infrastructure, the NRM Government will continue to upgrade and maintain the national road network to ensure that the entire road network is permanently motorable.
Roads where upgrading to tarmac will start by June in 2010 include:
• Vurra-Arua-Oraba;
• Nyakahita-Ibanda-Kamwengye;
• Atiak-Moyo-Atoji; and
• Gulu - Atiak–Bibia-Nimule routes.
Work will also commence in the later part of the 2010 on upgrading to tarmac the following roads among others:-
• Mukono-Katosi-Nyenga;
• Mpigi-Maddu-Sembabule;
• Kapchorwa –Suam; and
• Fort-Portal Bundibugyo-Lamia.
The rehabilitation of the following roads will begin by June 2010:
• Tororo-Mbale-Soroti;
• Jinja-Kamuli; and
• Kafu-Karuma-Kamudini.
Progress with tarmacking the following roads will also continue:-
• Soroti-Dokolo-Lira;
• Kampala-Gayaza-Zirobwe;
• Kampala-Masaka-Mbarara; and
• Kabale-Kisoro-Bunagana.
The other roads not mentioned here are as per my previous addresses to the Nation.
Concerning the maintenance of the road network, Government has over the years been allocating substantial resources towards both nationally and local government management roads. A total of U Shs. 268 billion has been allocated this year alone, of which U Shs. 110 billion is for local government road maintenance. This is a Shs. 39 billion increase from U Shs. 61 billion that was allocated for this purpose in the Financial Year 2008/09.
Local governments, therefore, have no excuse for not carrying out maintenance works on roads in their localities. District Chairmen and Chief Administrative Officers must, therefore, be held accountable to the people for the use of these funds. All stakeholders including Members of Parliament and Councilors must demand for better roads within their localities. I discourage the use of contractors on these roads except where prices are fixed. You should use your machines to work on the roads.
In addition to the Road Fund that will become operational in January 2010, the NRM Government will commence the re-equipment of all district city and municipal road units to provide the necessary minimal capacity to repair roads without suffering delays caused by the need to contract the private sector. I recognize that while private road contractors have been important in the construction of roads, in-house capacity at districts, cities and municipalities to carry out basic road maintenance must be enhanced.
This is the reason why Government has recently provided the Kampala City Council with road maintenance and construction equipment to ensure that the City roads are well-maintained and upgraded. Larger contracts for re-construction and upgrading can then be contracted out to the private sector.
Energy Infrastructure
In order to support industrialization and prevent environmental damage through encouraging use of electricity, Government has restored dilapidated hydro-electricity generation plants as well as increased the electricity generation capacity in the country. Ugandans need to remember that the NRM Government decisively dealt with the electricity crisis that befell the entire East African region in 2006 following severe drought. While there was an increase in the tariff paid by consumers, electricity was available and still cheaper than having electricity that is privately own-generated.
The provision of a Government subsidy ensured that the full cost of the increase was not borne by the consumer and that the increase in production costs was not as high as would have been the case had Government left manufacturers to continue generating their own power. Consequently, production costs have remained manageable while Government has taken deliberate actions to ensure cheaper power is available starting with July 2011 with the commissioning of the 250 Megawatt Bujagali Hydropower Plant. In addition, mini-hydropower plants constructed by private developers at Mpanga, Buseruka and Ishasha will contribute an additional 35 Megawatts to the national grid next Financial Year. Government will also be commissioning the construction of at least an additional 1,650 Megawatts of energy generation capacity at Karuma, Isimba and Ayago and other hydropower sites. The lack of sufficient and affordable power supply that enables competitive processing and rural electrification is, therefore, being dealt with.
Oil Resource Development and Management
Uganda’s oil reserves are now estimated at about 2 billion barrels, largely in Albertine Graben in the Western part of the country; and plans are underway for the commencement of commercial production. The Government put in place an Oil and Gas Policy to guide the development and prudent utilization of oil resources. To ensure that all Ugandans benefit from this important and strategic resource, the Government is putting in place the necessary legal and institutional frameworks. In this regard, two separate laws are envisaged: one on administration of oil and gas activities, including the development and production of the oil and gas value chain; and the second law will focus on regulating payments, use and management of oil revenues in a manner that creates sustainable national wealth. The key element in these legislations will be to ensure transparency and accountability in the production and utilization of oil resources.
In order to attract the huge investment resources required as well as the expertise, it is a Government policy that the actual development of oil resources, including oil production, will be through the private sector, including international companies. Where necessary, Government will partner with some of these companies in a Public-Private Partnership arrangement. Plans to build a medium size oil refinery aimed at meeting domestic and regional petroleum demand are also underway. This will help to add value and create jobs. The refining of oil domestically will help to develop the value addition chain as well as improve the energy mix of the country.
The development of oil resources will go hand in hand with the continued efforts to develop other sectors of the economy – that is, the diversification of the economy will continue to be among the top priorities of Government in spite of the oil wealth. The Government recognizes the critical importance of managing oil resources well, to avoid the mistakes many others countries have faced.
Hence, Government will ensure that these resources are managed in a manner that facilitates sustainable development and avoids distortions, such as a sharply appreciated exchange rate, which would destroy other sectors of the economy by making them uncompetitive in terms of export. In other words, oil and gas resources will be managed in a manner that is consistent with the macroeconomic framework of the country.
Since oil is a finite resource, oil revenues will be used to develop durable and competitive competencies that will increase productivity in key sectors of the economy. Thus, oil revenues will be invested in key non-oil sectors for productivity enhancement. The key priority sectors for development using oil revenues are as follows:-
1. energy infrastructure including enhancing electricity generation, and transmission capacity and rural electrification;
2. rail transport and major road infrastructure;
3. small, medium and large irrigation schemes to ensure availability of water for agricultural production;
4. Science and Technology including enhancing technical and vocational education to avail requisite skills for a modern economy.
This means that oil revenues will be ring-fenced to ensure value for money and used mainly for the above-mentioned key priorities countrywide. Oil revenues, therefore, shall not be used for consumption but for durable investments that will benefit future generations. Oil and gas activities will provide opportunities for both forward and backward linkages in the country’s quest for industrialization. Having achieved significant progress in the areas of oil exploration, Government is now going to concertedly focus on Oil Management issues. I am, therefore, directing the Minister of Finance to lead the coordination of oil management issues forthwith in consultation with the Minister of Energy and the Governor of the Bank of Uganda.
B: Agriculture and Value Addition
In Agriculture, the NRM Government will continue to ensure that there is increased production and enhance the capacity to add value to agricultural produce. To achieve these objectives, Government will undertake the following:
First, in order to increase production, the NAADS programme will continue to be implemented to ensure that all farmers receive the necessary extension advice on what to produce using tested practices, together with improved planting materials and breeding stock. As a result of households realizing the income potential in the Agriculture Sector, there has been an increase in the demand for improved planting materials and breeding stock materials that far outstrips its supply. I am, therefore, directing the Ministers in charge of Agriculture and Finance to address this matter urgently to ensure that there is increased supply of improved planting materials and breeding stock available to farmers.
Furthermore, in the next Financial Year 2010/11, Government will also prioritize the provision of reliable availability of water for production throughout the country by commencing the implementation of small, medium and large scale irrigation schemes. There is no doubt that Uganda abounds with agricultural potential that can be enhanced once the vagaries of the weather are controlled. Therefore, water dam storage and irrigation schemes will be implemented to ensure that there is increased production, without relying solely on the increasingly unpredictable weather. Given that farm holdings by households in Uganda are on average only two acres, Government will also place emphasis on development of small irrigation technology that can be used on individual small farm holdings, while also constructing dams for larger storage and irrigation schemes. I am, accordingly, directing the Right Honourable Prime Minister and the Ministers in charge of Agriculture and Water Development and Finance to coordinate implementation of this intervention beginning next Financial Year.
The second action pertains to adding of value to agricultural produce. Owing to the almost non-existent addition of value to produce, there is a lot of wastage and, consequently, lower levels of incomes are earned by farmers. With the increasing availability of electricity, there is greater potential for increased value addition to be carried out even at the farm level. As a start, in this Financial Year 2009/10, Government will provide support to food science and technology graduates from Makerere University who have acquired both the technical know-how and entrepreneurial skills at adding value to agricultural produce. My interaction with our own Ugandan innovative scientists has shown that it is possible to add value to a whole range of products including fruit, milk and meat products.
In order to further develop and realize the technical potential of graduates from the Makerere University Food Science and Technology Department, the Minister of Finance will shortly operationalize an Industrial Venture Capital Fund for these graduates to access start-up capital for agro-processing ventures, at interest rates of no more than 5 percent for a maximum repayment period of eight years. Other existing small-scale entrepreneurs who have proved that they are capable of adding value will also be provided with technical skills by the Uganda Industrial Research Institute beginning this Financial Year 2009/10. In addition, a Small and Medium Enterprise Fund with similar terms to the Industrial Venture Capital Fund will be operationalized by the Minister of Finance. These Funds will be managed by willing financial institutions through the Bank of Uganda, as has already been done with the Agriculture Credit Facility that is already in place for commercial farmers and agro-processors.
These measures will propel the agriculture sector to allow increased reliable production through the availability of resources within the control of farmers; and also enable them to receive reasonable incomes from increased agro-processing ventures from both existing and established ventures that will be supported through the actions I have mentioned.
C: Employment Generation
The above actions by Government mark an important milestone towards the generation of jobs in areas that have not traditionally contributed to employment. Creating technical capacity for entrepreneurs to go into business or enhancing their business productivity, allows them to generate employment for those other Ugandans who do not have access to the technical know-how required to run processing industries. Many of the youth who have left primary and secondary school and have not had the chance to proceed with further education will eventually have an opportunity to be employed. Those that have the potential to become entrepreneurs in their own right will also be encouraged and provided the opportunity to seek the technical know-how at institutions such as the Department of Food Science and Technology and vocational training institutions. They will be appropriately certified to engage in agro-processing ventures and also access the Industrial Venture Capital Fund once they qualify.
These new entrepreneurs with the requisite skills will then join those who have been encouraged and facilitated through the formal education system to provide increased employment opportunities through small and medium scale enterprises across the country.
Government is also going to provide capital for the youth with an entrepreneurial potential, to enable them to start viable commercial ventures after they have received the necessary training and certification from Enterprise Uganda. Enterprise Uganda deals will improve the entrepreneurial attitudes and skills of the youth they train and prepare them to manage the enterprises they establish sustainably.
I am, therefore, directing the ministers of Finance and Gender Labour and Social Development to establish a Youth Employment Scheme, to effect this measure.
The Scheme must also provide access to capital managed by commercial banks at reasonable rates and over a sufficient period to address the problem of unemployed youth who would otherwise want to work for themselves if they were provided with the means and skills to do so.
Government will also support, in a similar manner, youth who wish to operate joint facilities such as community-owned timber and welding workshops using this intervention. All the parents and youth should be informed that there is a total of 88 Government Institutes in Uganda (25 Technical Schools, 34 Technical Institutes, 4 Technical Colleges, 16 Community Polytechnics, 3 Vocational Schools, 1 Vocational Training Centre, 1 Community Polytechnic Instruction college and 4 farm Schools). We are going to expand and equip all these schools that teach technical skills. You should use them to get skills that are marketable.
D: Human Development
The presence of innovative scientists that I have placed a concerted effort in supporting over the years underscores the importance of developing our human resources to meet any of our national aspirations. As you all know, the NRM Government has placed Human Development central to the achievement of the social and economic well-being of Ugandans with the universalization of primary and secondary education. The Government also recognizes the need to have a healthy population that can engage in all aspects of development and, therefore, stresses the importance of having a sound health system, adequate provision of safe water and proper sanitation facilities across the country.
Education
Following the universalization of primary and secondary education, the NRM Government will progress the education agenda towards developing the necessary technical and vocational skills required to run a modern efficient economy. The NRM Government has ensured that the opportunity to learn is availed for every school going age child at primary and secondary levels. Consequently, up to 12 million Uganda school going age children are in school and every effort will be made to ensure that the other 3 million who are out of school because of social constraints and other impediments actually go to school.
As I have pointed out before, the achievements recorded by the NRM Government at the primary education level since 1997 have been significant. For instance, over 12,000 thousand new classrooms have been built, bringing the total number of primary school classrooms in the country to over 82,000. The classrooms in 1986 were only 28,000. An additional 20,000 teachers houses have also been constructed at schools to ensure teachers are not constrained in doing their jobs. The number of children passing PLE rose four-fold from about 80,000 in 1997 to 356,000 in 2007.
The secondary school segment has registered similar achievements. Since Universal Secondary Education (USE), commenced in 2007, the percentage of pupils who are enrolled from Primary Seven to Senior Secondary School has increased from 44 percent to 73 percent. A further 39 seed secondary schools in sub-counties that did not have any secondary school have been built and the Government is planning the construction of another 25.
At the tertiary level, the number of public and privates universities and university-affiliated institutions registered totaled 29 with an enrolment of almost 108,000 in the 2008/09 academic year. You can see the tremendous progress, from the enrollment of 5,000 students in 1986! A further 117 public and private institutions offer tertiary courses with an enrolment of 47,000 in 2008. Government, together with the private sector has, therefore, made great effort towards ensuring that there are opportunities for learning at the highest levels of the education system for those who wish to pursue education.
While at the highest level in universities and colleges Government will emphasize the teaching of science and technology among other disciplines, the vocational and technical skills required to support industry will be the emphasis, over and above basic primary and secondary education. Government will, therefore, turn to other important facets of the education system to ensure that the nation has the necessary human resources required to build and sustain a modern nation. Government will embark on the vocationalization of education that will depend on the discerned needs of the market for employment skills in the economy. In this manner, learning opportunities for technicians in all the necessary fields will be developed. I am, accordingly, directing the Minister of Education to deal with this matter expeditiously.
The above achievements notwithstanding, the education sector suffers from problems of teacher absenteeism, poor teacher supervision and continued unscrupulous charging of compulsory fees by Head teachers, which is against the law. This constrains the achievements of higher education outcomes for our young people. I would, therefore, like to urge parents and community leaders to report Head teachers who carry out such malpractices and teachers who also absent themselves from duty to their area Councilors, Members of Parliament and Resident District Commissioners. I have also, recently, constituted a Judicial Commission of Inquiry into Primary and Secondary Education to study problems of these sub-sectors and provide recommendations that Government will work to implement.
Health
In the Health sector, The NRM Government has sought to deliver a minimum health care package that deals with the most common causes of ill-health. Consequently, new health centers have been built across the country and a programme to ensure they are fully equipped will be undertaken in all Health Centers, District and Regional Hospitals in the country. The Mulago National Referral Hospital will also be rehabilitated beginning the Financial Year 2010/11. Government will also continue to train and recruit more health workers to fill the current shortage of health workers at all levels of the health system.
In the health sector, Government has over many years been transferring funds to districts to purchase drugs with minimal amounts being allocated to the National Medical Stores for centralized purchasing. Local Governments have, largely, not made the intended purchases; and even the few drugs that reach health centers from the National Medical Stores have invariably been stolen, leading to drug shortages. With the recent centralization of funding for purchasing drugs at the National Medical Stores, the drugs will, now, be centrally purchased and physically delivered to Health Centers. The labeling of drugs and increased vigilance of both public and private health centers, by the population and community leaders must ensure that these drugs are not stolen.
The recent arrest, by officials from my office, of errant public health workers who steal drugs must serve as a wake-up call for the entire population to safeguard public drugs that are meant to be given to patients free of charge.
E: Public Service Management, Anti-Corruption and Governance
In addition to investing in the physical and other supportive infrastructure required to deliver public services, Government will now insist on the adherence to rules and procedures to ensure greater efficiency, effectiveness and realization of value for money. Otherwise, the positive actions the NRM Government has undertaken in the areas I have enumerated would have been more significant on the ground had we not been constrained by mismanagement and outright theft and abuse of office by many public servants at both central and local government levels.
Expenditure
One of the main objectives of the 2009/10 national budget was to provide a fiscal stimulus to the economy. However, the implementation of Government programmes in the first half of this fiscal year fell short of what had been programmed, due to the lack of utilisation of Government Expenditure. The underutilisation of budgeted funds is due to unpreparedness of public servants in implementing Government programs and projects. Although some people are blaming the low absorption capacity of Government funds on the Government insistence on having value for money, it is only sensible that taxpayers’ money is spent wisely to benefit all Ugandans through improved services. The question of the courts releasing thieves on bail or giving them light sentences is not acceptable. We have fought many wars; the least I expect of the Judiciary is seriousness.
Therefore, Ministries and Local Governments and other agencies must provide credible work plans where outputs are verified, to ensure that whoever is responsible is held accountable. The reforms being implemented on improving the efficiency of public spending have helped to identify problems that have previously undermined service delivery. We now know these problems, including those individuals who have been stealing public funds; and I am taking action on these individuals. In the very near future, these actions will result in increased quantity and quality of public service delivery for all Ugandans.
To take an example, the public procurement and accounting officers have demonstrated bad practices leading to loss of public money and wasteful expenditure. Some technical officers of Local Governments and even Chief Administrative Officers and Permanent Secretaries are either involved in mal-practices or do not supervise their staff adequately to ensure the delivery of intended Government programmes. This lack of seriousness must stop forthwith. I am going to hold accountable every single accounting officer, including Permanent Secretaries, for the actions or inactions of their officers.
If procurement is not done on schedule in accordance with work plans submitted to Parliament in Ministerial Policy Statements, for example, I expect the Permanent Secretary to accordingly take action against the officer concerned; or they themselves will be held responsible. In the same vein, the Chief Administrative Officers and District Directors of Health Services will be held responsible for the absence of staff from health centers, the theft of drugs and the abuse of NAADS resources if they do not show that they have taken all the necessary actions to reprimand or discipline their juniors.
With respect to the on-going CHOGM investigations, Ugandans need to know that the effort of Government has led to tremendous improvement in the image of Uganda as a leisure and conference destination, the abuse of procedures and resources by some officials notwithstanding. To take an example, non-resident arrivals at Entebbe International Airport increased by 32 percent from about 642,000 arrivals in 2007 to 844,000 in 2008. This follows an increase by only 19 percent and 15 percent in 2006 and 2007 respectively. These visitors to Uganda bring in much needed business for Ugandan hotels, where the number of rooms has increased tremendously as a result of both private entrepreneurship and Government support during CHOGM.
Government policy and the success of CHOGM notwithstanding, I do not condone the action of those public officials who abused procedures and mismanaged any resources allocated to them for the event. Indeed, I commissioned a special audit of CHOGM expenditure by the Auditor General, which is now the subject of the deliberations of the Public Accounts Committee of Parliament.
Therefore, Government fully supports all organs that are charged with improving Governance and Accountability of public resources, including the Office of the Auditor General, the Inspectorate of Government and Parliamentary Committees on Public Account and Local Government Public Accounts; and the relevant Courts of Law. This is hoping that the courts will really have ‘teeth’ to deal with these people who steal money and government resources. Government will ensure that the necessary punitive action is taken against officials abusing rules and regulations and I am directing the Ministry of Finance to also institute efficient checks to stop this abuse forthwith, including undertaking surprise inspections to unearth embezzlement and mismanagement of public resources.
The time for a laissez faire attitude among public servants is over. I will not hesitate to take action against Permanent Secretaries and Heads of Institutions who do not achieve reasonable progress with their work plans. I am, therefore, directing the Right Honourable Prime Minister to ensure the quarterly assessment of ministerial, departmental and local government work plans and to take action or recommend to me any action that must be meted out against errant officials.
The NRM in 1986 embarked on repairing the economy. The economy was in shambles; the owners of companies had fled and the companies and factories had closed. We attracted all these back and they created employment and they started paying taxes. Tax collection improved. I have told you before that tax collection in 1986 was only U shs 5 billion, which is about US 2.5million. Our tax collection is now 4,300 billion, which is about US$ 2.5 billion dollars. This is our own money which we are collecting in Uganda; and we are sending this money to the districts and to the different departments to the ministries. And what happens to this money? The drugs are stolen. Recently, I had to create units to fight them. Earlier on, we had created the office of the IGG. And what happens in courts? People are accused of stealing people’s drugs, money and they are released on bail. As I said earlier, this is not acceptable.
Security
Government shall continue to secure the lives and property of all citizens as well as protect their rights. It is imperative, therefore, that we all continue to adhere to the rule of law and constitutionalism in order to jealously guard the peace prevailing. Uganda is now peaceful, from North, to South, from East to West. We defeated Kony, whom some of these people were going to worship in Garamba. I refused to send an NRM delegation to Garamba to see Kony. Rugunda went there as a Government Minister; the Minister of Internal Affairs deals with all sorts of people, criminals, people who are going to hang tomorrow. So when that foolery went on for a long time, we went and dealt with Kony the way he should be dealt with. Those who were killing our people have now paid. The other day in Gulu I gave the figures at a ceremony of installing a Bishop there. The rustlers in Karamoja have been disciplined and disarmed. The North-East is peaceful. The ADF cannot dare to come from Congo, although there are still some remnants, who are now the problem of the Congo government; they cannot come here to disturb us. If they come, they will not go back, but will stay here ‘horizontally’. Uganda is now peaceful. I will not tolerate any other trouble makers.
If you want anything, do it according to the laws. In 1994/95, we elected people to represent us; they came and sat here in the CA for two years debating the Constitution of Uganda. This constitution is the only democratically agreed constitution in the history of Uganda since God created what is now Uganda. The one of 1962 was by some chiefs and some groups, political parties which had not even gone through elections that time. The 1995 Constitution was agreed by the people of Uganda. So I expect, I demand; and we shall have strict adherence to the constitution of Uganda. There should be no mistake about this. If you want to do anything, follow the constitution. You don’t follow the constitution; I will take action against you, as the elected President of Uganda.
On the side of international relations, Uganda continues to enjoy amicable relations with her neighbours on all sides. With the celebration of 10 years of the revival of the East African community, Uganda continues to advocate for the boosting of productivity through promotion of infrastructure, investments, industries and trade as well as a common defence, among others. Uganda handed over the Chair of the Commonwealth Heads of Government Meeting (CHOGM) in November 2009, after a successful two years of leadership. Uganda continues to join the rest of the world in efforts to mitigate the extreme climatic conditions and put in place measures to protect our environment.
As we come to the close of the year 2009 and start a new year, I am calling upon all Ugandans to participate in the crusade of eliminating poverty and supporting faster socio-economic growth. While government will continue to provide a conducive environment with targeted socio-economic programmes, each citizen must be responsible, patriotic and plan for their households and personal aspirations for the year 2010.
I wish you all a Happy and Prosperous New Year.
I thank you.
