Uganda 2012 Budget Speech by President Museveni

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 

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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 

other hand. 

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 

40%. 

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 

adversely affected.   

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) 

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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 

skills. 

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 

category A. 

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 

the country; 

(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.