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NRM MPs Retreat at NALI, Kyankwanzi

Keynote Opening Speech

by

H.E. Yoweri Kaguta Museveni
President of the Republic of Uganda
to
the NRM MPs Retreat
at
NALI, Kyankwanzi

8th February, 2015

I have been telling you for a long time about wealth creation and value addition.  This is because of the big mistake of preserving under-development among 68% of our homesteads, according to the 2001 census, by which time only 32% of the homesteads were in the money economy.

This is a big portion of our population that has, on account of lack of sensitization, continued with subsistence farming and abstained from engaging in commercial agriculture.  I concentrate on these because they are the ones that need guidance because of lack of education or because of mis-education.  This big portion of our population remaining in subsistence farming is partly responsible for not yet achieving the middle income status of our country.

This does not, however, mean that the other portions of the society are well oriented either.  On this occasion, I will, therefore, tackle the society and economy in a broader way, especially emphasizing industrialization.  Industrialization requires focusing on three major areas: the materials and resources endowment; the human capital; and organizing our markets as well as struggling for access to other markets in Africa and abroad.  The materials and resources can be grouped into three categories:  agricultural wealth: minerals wealth; and flora and fauna as well as geographical wealth (Lakes, rivers, mountains, etc).  

Starting with agriculture, we should know that agro-processing helped many countries in Europe and elsewhere to launch themselves on the path of socio-economic transformation.  The Scandinavian countries are a good example. They started off with agro-processing and proceeded to other levels of industrialization such as electronics e.g. Ericsson, motor-vehicles such as Scania and Volvo, etc.  We always buy very good milk coolers from Denmark and Tetra-pack paper packaging products dominate the processed foods’ packaging, especially milk.

Agro-processing achieves the following targets:
(i)    adding shelf-life to products so that they can reach distant markets – UHT and powdered milk can reach distant markets while fresh milk cannot; the same applies to bananas, fruits; etc.;

(ii)    it, therefore, expands the spectrum of our exports and earns more foreign exchange for us;

(iii)    it creates jobs so as to alleviate the problem of unemployment;

(iv)    it stimulates the development of the markets for machine fabrication that are used in the value addition; and
(v)    it expands the tax base for the country by creating employment for many young people ─ who, then, get salaries that are liable to income tax.

By adding value to our coffee, our maize, our fruits, our bananas, our Irish potatoes, our cassava, our millet, our sorghum, our beans, our peas, our cotton, our beef, etc, even at our present level of production, our GDP size will expand by a factor of 10.  With the increased production levels at the homestead levels, through “Operation Wealth Creation”, as well as wider value addition, our economy can be a half trillion dollars economy in a fairly short time.  The only other factor that we need to ensure is low cost electricity and also solving the problem of the railway to lower the transport costs.  If the grid electricity is still expensive, we can use the bio-fuels to generate our own electricity like the sugar factories do.  They burn the bagasse (ebikambi) and generate their own electricity.

To show the difference value addition brings to the economy, we can, again, quote the example of coffee.  While a kg of raw beans of coffee would fetch Shs.2,500/- (farm gate price), ready to drink coffee would fetch Shs. 40,000/- per kg.  That is an increase in value of 1,600%.  The same applies with tea.  While a kilogramme of unprocessed tea will go for Shs.300/-, ready to drink tea will fetch Shs. 25,000/-.  That is an increase in value of 8,333%.  This is true for all the other crops and animal products.

In addition to agriculture, the other category of resources that must have value addition are the minerals. Again, there, the loss of value, if exported raw, is evident.  A tonne of unprocessed iron-ore (obutare – 70% pure) fetches US$ 40.  Refined steel goes for US$ 680.  Then this steel would go into our dams, into our high rise buildings, etc.  With alloys such as nickel, cobalt, tungsten, etc., you then produce alloyed steel plates that can be used for cutlery, pressure pipes, exhaust pipes, military tanks, etc.

A tonne of copper ore, less than 40% pure, will give us US$1,300.  Blister Copper (83% - 95% pure) would give us US$3,800 and Cathode Copper (99.99% pure) would give us US$6,198 ─ that is a percentage gain, in terms of value, of 477%.  Then the cathode copper would be used to produce copper wires for electricity transmission and electricity generation and copper plates for military industries – such as bullet cartridges.

Vermiculite, if only concentrated, would give us US$85 a tonne.  A tonne of semi-processed vermiculite would give us US$143 and the processed tonne would give us US$410 per tonne.  Vermiculite is used in the following products: insulation materials for (a) electrical wires (b) brake linings for automotive industry (c) fire proofing of   structural steel and pipes.  Remember that all these additional value addition levels will create more jobs for our children. Therefore, it is a big loss to export all these jobs to others as well as donating money to them.

Our fauna, flora and geography is already giving us US$ 1 billion  per annum with the little effort we have put in.  As I have told you many times, Uganda is almost unique in the whole world.  Only a part of Kenya shares that uniqueness – the part of Kenya near Mt. Kenya.  It is almost the only part of the globe that is right on the Equator with a high altitude (from 5,109 metres above sea level to 620 metres above sea level).  This means that we get sunshine all the year round but we also get mild, if not cold, temperatures on account of the high altitude. That also influences the fauna and flora.  Uganda, therefore, means four words: mild temperatures, very green and diverse flora, very diverse fauna and unique geography (water bodies, savannah, tropical forests and high mountains).  Uganda is un-comparable with anything I have seen on the globe.

With peace, tourism, taking advantage of these unique features, is  booming.  However, the tourism will boom even more when we tarmac all the roads to the tourism areas as we have done with Mweya and Murchison Falls Park.  

We are going to do the same for Bwindi and Kidepo.  We shall also build airports in Kasese and near Bwindi to shorten the road trips from Entebbe for the tourists.  Otherwise, the private sector is building the hotels and the lodges and they have invested in tour guides.  The forests also produce wood products – timber, furniture, paper, gun-butts, etc. The trees are also used in the processing of tea.

However, Ugandans need to wake up to the mistake of drying wetlands and cutting forests.  I long ago negotiated for you with CNN to always have the temperatures of Kampala displayed every day on that channel.  I wanted to lure tourists by publicizing the always mild temperatures of Uganda. I was, however, horrified when I, recently, saw the CNN displaying that the temperatures of Kampala were 31% !!  Yes, this is the small dry season (akanda – January, February and a few days of March).  However, Kampala never had such high temperatures even in the big dry season (ekyaanda ─ June and July).  The Bible says: “The wages of sin is death”. We shall pay for the sin of damaging the wonderful environment God gave us for free.  “Whatever a man sows, that is what he will reap” as found in the Book of Galatians 6:7, in the Bible.

It is  annoying to see Abu Dhabi creating forests and water bodies where they did not exist while Ugandans are destroying the free heritage God gave us.  The wetlands will be recovered.  The Wetland Fund I am proposing will not be for the corrupt officials and their masters who give titles in wetlands.  It will only be for the bonafide people who were encouraged to go into the wetlands, nay not wetlands, but, the tributaries of the Nile, by either the colonial Government or the post-independence governments in, especially, Kigezi, a little bit of Bushenyi and Eastern Uganda (for swamp rice).  The corrupt who have knowingly encroached on the wetlands will have their titles cancelled.  Uganda cannot commit suicide on account of these parasites.  As much as 40%of Uganda’s rain comes from these wetlands as well as the wetlands in South Sudan and the forests in Congo.

Finally, on the issue of human capital – this is the greatest resource.  The human beings are the consumers of all manner of products (agricultural, industrial) and services.  They are the workers, technicians, designers and managers in factories as well as the producers in agriculture.  They are the innovators in terms of research and scientific discoveries and they are the entrepreneurs.  By introducing Universal Education, we have empowered our population.  We have produced more scientists.  

By 1986, Uganda was producing 79 doctors every year.  We are now graduating 343 doctors plus 10 dental surgeons every year.  We were graduating 38 engineers every year. We are now graduating 934 engineers every year, with Kyambogo University alone producing 439.  We were graduating 67 Bachelor of Sciences (Education)) and 229 Bachelor of Sciences (Flat) qualifiers but now (2013/14) we are producing 359 BSC (Education) and 735 BSC (Flat) graduates, making a total of 1,094 BSC graduates.  Some years ago, I set up an innovation fund but kept it in the Ministry of Finance.

In the new structure of Government, I will create a dedicated section to deal with scientific innovation.  May be, we should set up three funds:  a fund for research, a fund for innovation and a fund for commercialization of innovations. The new section of the Government will advise us more appropriately.

In the meantime, our scientists have made a lot of inventions in food technology, light engineering, medicines, general science and even in electronics.  With peace and proper budgeting, the sky is the limit.  

I thank you.

Yoweri K. Museveni Gen (rtd)
P R E S I D E N T