As you heard, the economy grew by 3.2% this
Financial Year. This is one of the lowest rates of
growth in the last 25 years. Inflation had also gone
up to 30%. It has now come down to 18% of all. Food
inflation has gone back to 8%. As I have told you in all
my previous speeches, this is due to a confluence of
two sets of factors – the global problems on the one
hand and our own mistakes within Uganda, on the
The global problems are well known to those who
watch Western media channels such as CNN, BBC,
Aljazeera, etc., as well as those who watch the Russian
Television channel – RT. The economies in Europe
and the USA are in trouble with failed banks, high
level of indebtedness, high unemployment rates, etc.
Consequently, domestic demand in the EU declined by
4.2% (2009). This has affected our exports to Europe.
Demand for flowers, for instance, has declined by
about 70%, demand for fish has declined by about
Nevertheless, the economy of Uganda is not just glued
to the economies of Europe and the USA. Fortunately,
we have got our own internal and regional markets.
Aggregate demand here in Uganda has not been as
Uganda exported to the Region goods and services
worth US$ 654 million in 2009/2010, US$ 873 million
in 2010/2011 and US$ 1,170 million in 2011/2012.
Therefore, demand in the region has not been as low
as in Europe. We could have performed better if it had
not been due to the mistakes by some of our actors in
respect of delaying some projects such as Bujagali, the
sugar projects of Amuru and Lugazi, the beef project
by the Egyptians, the Nakawa-Naguru housing
projects, Palm oil projects in Buvuma, etc.
It is this self-illusory arrogance and ignorance of
various actors that is part of the problem. It would
help our long-suffering country and continent if all the
actors were to realize that as far as the economy is
concerned, there are two sovereign actors: the
consumer (the one who buys a product or a service)
and the investor. All the other players, high sounding
titles notwithstanding, are of no ultimate importance.
If enough buyers (local and foreign) do not buy what
you produce, that is the end of your business. If an
investor does not agree to put his or her money, skills
and entrepreneurship in your country and goes
somewhere else, that is the end of that effort.
Ignorance, however, misleads many actors to think
that Presidents, Ministers, Members of Parliament,
bureaucrats, etc, are the most important actors as far
as the economy is concerned. This is dangerous self-
deception. You have seen Governments and systems
collapse because one set of the two primary actors has
malfunctioned - the consumers and the investors.
With a country, owning natural resources, it gives it
an importance provided those natural resources are of
a unique and strategic nature and are to be found only
in our country. We have coffee, for example.
However, coffee is not only in Uganda. Therefore,
international coffee-roasters are not bothered to come
to Uganda. They roast coffee from all over the world in
other places. We have to roast the coffee ourselves.
This has not been easy because our people did not
have capital, technical know how and entrepreneurial
This is what brings us to the issue of competitiveness
of a country vis-à-vis other countries in terms of
attracting investments and also winning markets. You
must treat investors well and also treat consumers
well if you are to survive in the modern world. You
must ensure that investors have security, they have
good infrastructure that will make their businesses
profitable by lowering the costs of doing business in
your country, they are not delayed by corrupt or self-
important officials, etc. This is where some actors
have let down the people of Uganda by playing around
with the two sovereign actors in the economy – the
investor and the consumer.
It is this failure, this arrogance, that has caused our
economy to only grow at 3.2% this year. Yes, the
global economy is bad but our economy would have
grown at a higher rate if it was not for this mistake.
These actors also squander the contribution of Uganda
Peoples Defence Forces (UPDF) and the people of
Uganda in bringing about stability. The peace we
ushered in and the goodwill we have generated would
have brought more development if all the actors were
conscious of the two fundamental actors in a modern
economy: the consumer and the investor; and if all of
us were aware that our roles, high sounding titles not
withstanding, is to search for, value and facilitate
these two fundamental actors in a modern economy.
With the correct handling of the two actors, then, you
solve the problems of employment, widening the tax
base, provision of goods and services, foreign exchange
earnings, social services, etc.
In spite of this obstruction, we have moved and we are
now set to take off. Through many struggles, Bujagali
is now about to be completed. We shall, for the first
time since 2005, have no electricity deficit for, at least,
the next two years. This is an opportunity we are not
going to miss again. More mini-hydro stations will be
built and they will generate 125 MW, we shall start
using our crude oil to generate electricity, we shall
build Isimba and start on Karuma. We shall never get
electricity shortage again.
In my recent State of the Nation Address, I talked
about the two categories (A and B) of roads that have
been listed by the Ministry of Works to be worked on.
We are determined to work on all the 19 roads under
With the full knowledge of the importance of the
investors to the economy, I will reactivate the
Presidential Economic Council (PEC) that will be
meeting once every two months under my
chairmanship or that of the Vice President, in case I
am not present.
Mr. Stephen Muyingo, my Senior Private Secretary in-
charge of Economic Affairs, will be the Secretary to the
Council. The Chairman of the Uganda Manufacturers
Association (UMA) and that of the Private Sector
Foundation as well as a number of other Private Sector
players will be members. This is in order to eliminate
once and for all the arrogance of the civil servants
when they are designing policies. They always ignore
the views of the Private Sector, as I pointed out above;
yet they are the prime movers of the economy.
Officials, in many cases, act against the interests of
our private sector. I have been told, for instance, that
somebody licensed the import of poultry meat. Yet I
have been promoting chicken production in the
country. What is the interest of such an official?
PEC will harmonize such disharmonies. The Minister
of Finance touched on the issue of nucleus farmers.
These will be helped to provide tractor hire services to
their neighbours. Also working with the private sector,
we are going to ensure milling of maize within Uganda
so that we export maize flour instead of exporting
grains and, at the same time, produce poultry and
animal feeds within the country.
I have instructed the Minister of Finance to study the
usefulness of giving tax incentives to manufacturers
who locate their factories up-country.
In conclusion, apart from the victory in the electricity
field as well as the intensified battle in the sector of
roads, the following measures will help to stimulate
production and consumption:
(i) providing seeds and seedlings to the farmers for
the eleven selected crops;
(ii) working with nucleus farmers to provide tractor
hire services to farmers;
(iii) working with the private sector to ensure that
maize is milled within Uganda so as to add
value to it and also produce animal feeds within
(iv) studying the possibility of giving tax incentives
to factories that locate up-country;
(v) raising the tax threshold to 235,000 shillings so
as to stimulate savings and consumption; and
(vi) integrating the private sector in policy
formulation in the form of re-activating the
Presidential Economic Council to which leaders
of the Private Sector will belong.
Remember that while under feudalism, Kings, Princes
and Generals were the cardinal actors, in modern
economies the cardinal actors are the consumers and
the investors. Governments are mere facilitators by
providing peace, infrastructure and a conducive policy
as well as regulatory framework.
I thank you.