Fellow countrymen and countrywomen,
I greet all of you and congratulate you on finishing 2012 and wish you a prosperous 2013. I extend condolences to the families who lost their dear ones in the year that is just ended.
The years 2011 and 2012 were full of economic challenges but were also full of economic opportunities for Uganda. The economic challenges partly emanate from the global crisis in Europe and the USA - the countries that traditionally buy our raw-materials, send us tourists and from where the Uganda Diaspora send us remittances.
Since those countries (Europe and USA) have been experiencing economic hardships for the last four years or so, our exports to Europe have dropped by more than 50%. The Europeans are no longer buying as many of our products as they used to buy because they do not have the money. This is a problem from outside - an exogenous factor. Nevertheless, we were lucky that regional demand in the Great Lakes was growing rapidly before the insecurity in Eastern Congo interfered with the flow of business.
However, the weakness in Uganda was that, due to internal indiscipline by especially some of the politicians as well as other elements in the society, Uganda has not fully exploited the advantages created for her by the NRM fighters who created peace in the whole country and disciplined the army. This is apart from the correct strategy of private sector – led growth.
The private sector –led growth has enabled Ugandans to massively invest in transport such as boda-bodas, Kamunyes and buses; restaurants and hotels; hair salons; bars; video-houses; petrol stations; housing estates; and import businesses.
There is, however, little investment by the indigenous Ugandans in manufacturing. Besides, our Ugandan Indians, who have been active in manufacturing, face many politically generated obstacles in implementing industrial projects. The best examples are the Lugazi sugar expansion project and the Amuru sugar project. External investors also face the problem of corruption and indifference by Government officials.
An Egyptian investor who is building an abattoir has wasted a lot of time on account of some of these Government officials. You, therefore, end up with a triple headed problem - indigenous Ugandans do not yet invest in manufacturing because they lack the knowledge and the money, the Ugandan Indians are delayed by politically motivated schemes and the foreign investors are either delayed or deterred by corrupt or indifferent Government officials.
Uganda, therefore, ends with a smaller manufacturing sector than it could have and is, therefore, enfettered in using her advantage of peace, stability and an emancipated private sector that were created for her by the NRM.
This was the second reason Uganda experienced the economic problems of last year - high inflation caused by high prices of sugar, other foods, etc. The high prices of petrol and diesel were caused by different factors - high global prices for oil. Inflation went up to 30%. Was this bad for Uganda? Not at all.
It was only bad because some of the Ugandan leaders (political and administrative) have delayed our industrialization plan. The high inflation was the sign of our missed opportunities in the lucrative regional export opportunities as well as feeding the internal market. Therefore, in this coming year, the patriots of Uganda will have to confront these two saboteurs - the myopic political – administrative group and the corrupt officials who delay our industrialization vision.
No modern country can prosper by Agriculture alone. I have told you this many times. These delays for industrial projects can spell a disaster for Uganda if they are not resolutely resisted and defeated. Where will the youths get jobs from? How shall we expand the tax base beyond where it is now? How shall we expand export earnings so that we defend the shilling from depreciation as it did last year to 2,900 shillings per dollar?
Nevertheless, because the overall strategy has always been correct, in spite of the sabotage, the economy has recovered. The inflation which was 30% last year is now 4.9%. The annual rate of growth which was 3.4%, will climb back to 5% and, eventually, go back to 7%.
The commodity prices which had gone to 5,000 shillings per kilo for sugar and to 3,900 shillings per litre for petrol have now come down to 3,300 shillings per kilo and 3,700 shillings per litre respectively.
In spite of the intensive political and economic sabotage by the opposition during 2011/2012, the NRM has, nevertheless, regained and/or maintained successes in, for instance, the strategic areas of electricity and communications (roads and telephones). On the side of electricity, Uganda has, in the last three years, commissioned the big hydro-power dam at Bujagali that gives us 250 MW, the Bugoye mini-hydro station that gives us 13 MW, the Mpanga mini-hydro station that gives us 18 MW, the Ishasha mini-hydro station that gives us 6MW, the Nyagak mini-hydro station that gives us 3 MW.