Uganda Budget 2013/14 Speech By Maria Kiwanuka

1.       Madam Speaker, in fulfillment of Article 155(1) of the Constitution and in exercise of the powers delegated to me by H.E the President, I beg to move that Parliament resolves itself into a Committee of Supply to consider:

                     i.        The Revised Revenue and Expenditure Estimates for the Financial Year 2012/2013; and

                   ii.        Proposals for the Estimates of Revenue and Expenditure for the Financial Year 2013/2014.

2.       Madam Speaker, in April this year, Uganda’s long-term collective development aspirations as embodied in the Vision 2040, was launched by His Excellency the President. Vision 2040 provides a roadmap to transform Uganda from a low income to a modern middle income country within 30 years. Vision 2040 requires a fundamental change in the way of doing things by Government and the Private Sector, to unlock the binding constraints to Uganda’s progress.

3.       Madam Speaker, there are no quick answers to the challenges that face us today. The economic and social challenges we are working to address have happened over several years and will take time to resolve. This requires patience and coordination. The Financial Year 2013/14 Budget seeks to continue towards socio-economic transformation, one step at a time.

4.       Madam Speaker, consistent with our National Development Plan, the ruling Movement Party Manifesto and in pursuit of the Vision 2040, the theme for next financial year’s budget is “The Journey Continues: Towards Socio-Economic Transformation for Uganda”. The Financial Year 2013/14 Budget, like the one last year, will continue to focus on translating the Government’s strategic priorities into practice over the next twelve months. Scarce resources have must allocated to reflect key Government strategic priorities within existing resource constraints. Because the definition of budget means the allocation for use of scare resources to meet many priorities.

Financial Year 2012-13 Key Achievements

5.   Madam Speaker, the interventions that I pronounced last year sought to restore macro-economic stability, accelerate infrastructure development, increase agricultural production and productivity, improve the business climate, and achieve better service delivery, particularly in education and health. A detailed report of sector performance during the last year is provided in the Background to the Budget for Financial Year 2013/14. I, however, wish to highlight the progress achieved in key areas.

6.   Madam Speaker, the economy rebounded significantly growing at 5.1% last year. Inflation subsided and was recorded at 3.6% as at end-May 2013, a marked reduction from double digits at the start of the financial year. The volatility of the Uganda exchange rate subsided and the US Dollar currently averages around U. Shs. 2575.

7.   Government registered significant progress in the implementation of budget for financial year now ending. In the works and transport sector, 845 kms of several national roads were fully or substantially completed; or have their construction on schedule. Construction of a further 88 km of national roads will commence shortly having had their contracts signed. In addition, the designs for 723 kms of several national roads has been completed, and procurement for contractors will commence. The rehabilitation of the Marine Vessel Kaawa was completed during the year, and now operates between Port Bell and Mwanza.

8.   Madam Speaker, in the Energy Sector, the 250 MW Bujagali Hydropower project was fully commissioned. In addition a number of small renewable hydropower projects delivering a total of 68.5 MW to the national grid have been commissioned. This is a total addition of over 300 MW to the national grid. A total of total of 2,322 km of transmission lines were laid under several Rural Electrification schemes.

9.   Madam Speaker, during the year, over 35,000 farmers directly benefited from provision of improved maize seed, in addition to other inputs such as fertilizers, under the commodity approach. Furthermore, a total of 13,486 kg of foundation seed for Arabica coffee, beans, maize and rice, were distributed to seed companies and farmer groups. To enhance irrigation for water for production, the rehabilitation of all the three irrigation scheme of Mubuku, Doho and Agoro is substantially complete.

10.        Madam Speaker in order to improve accessibility to tourist sites, road access to several tourist areas is being rehabilitated. I will say more about this later. In order to enhance hospitality standards, 20 East-African Community - accredited hotel assessors were trained and the inspection of hotels accommodation was completed, to enable hotel grading and classification to be undertaken next financial year. The Hotel Training Institute at Jinja also had 390 students who graduated in May 2013.

11.        Madam Speaker, to improve human development, an additional 6,172 Health Workers were recruited to work at Health Centers and the remuneration of Medical Officers at Health Centre IVs was enhanced. Government also increased salaries for Primary School Teachers by 15%, and Science Teachers in Post Primary Education and Training Institutions received an increase in wages as well.

12.        Madam Speaker I will detail some of these achievements when I return to the sector priorities for next year.

                                       III.     Financial Year 2012/13 Economic Performance and Outlook

Economic Performance

13.    Madam Speaker, over the last year the Uganda economy has proved resilient and demonstrated strong signs of growth. At a global level, Uganda recently regained her credit rating of B+ with a stable outlook, by Standard and Poor’s, the international credit rating agency. Uganda’s higher credit rating is important because it lowers our cost of borrowing on international markets. This achievement is remarkable because it happens at a time when major economies like the United States and United Kingdom, are being downgraded. Uganda is one of the few countries that received HIPC debt relief in the 1990s, but has since not gone back to seek any.

GDP Growth

14.    Madam Speaker, economic growth has rebounded strongly during the year.  The economy expanded by about 5.1%. This performance is significantly higher than the 3.4% recorded in the previous year. The construction sector grew by 8.2% and electricity supply by 10%. The manufacturing sector recovered strongly growing by 4.2%, compared to a decline of 0.3% the previous year. During the last year, the agricultural sector output grew by 1.4%, improving from a modest 0.8% the previous year. The recovery in agricultural production was driven by a bumper crop and favorable prices, which signaled the potential of food for household security and incomes for most rural Ugandans.

Inflation and Interest Rate Developments

15.    Madam Speaker, inflation has declined substantially and reached 3.6% in May 2013, compared to 18.0% at the start of the financial year. The drop in inflation is a result of increased production, in addition to the improvements in the global economic prospects.  To this end Government will accelerate supply-side measures to remove production bottlenecks.

16.    Overall interbank interest rates declined to 8.6 per cent in March 2013 from 26.2 per cent in January 2012. This was a result of a drop in the Bank of Uganda benchmark reference interest rate, which has translated into lower commercial bank lending rates during the financial year. Commercial bank lending rates have also reduced, albeit slowly, from nearly 30 percent in August 2011 to an average of about 24 percent by end March 2013. These rates are still high because of the non-performing loans which have increased slightly from 3.4 % in March 2012 to 4.7% in March 2013.

External Sector

17.    Madam Speaker, the stock of our foreign exchange reserves amount to US$ 3.3 bn. This is equivalent to 4.5 months of future import demand of goods and services. This reflects an improvement in our reserve position of about US$ 2.6bn one year ago which was equivalent to about 4 months of imports. The balance of payments recorded a surplus of US$ 417 million on account of strong performance of foreign direct investment and other investment inflows which increased to US$ 1.76 billion and US$723.4 million, respectively; and remittances from Uganda working abroad amounting to US$ 767 million.

Private sector credit

18.    Madam Speaker, private sector credit expanded by about 15% during the year, compared to 11% in the previous year.  Domestic currency lending stagnated as a result of high lending rates and other factors, including the temporary closure of the land registry, in preparation for its computerisation. With the resolution of these issues, domestic currency lending is now showing signs of recovery.

Financial Sector Development

19.    Madam Speaker, access to financial services is key to encouraging savings and providing credit for investment purposes. The financial sector in Uganda has experienced rapid growth. Commercial Banks now number 22 with combined outlets of 360 branches across the country. In addition, four (4) Microfinance Deposit-taking Institutions (MDIs) have been registered with Bank of Uganda and two (2) MDIs have upgraded to Commercial banks status. In addition Rabobank’s investment in DFCU Bank is testimony of the confidence the international financial community has in Uganda’s financial sector, which . 

20.    In order to increase access to micro finance, Government has implemented the Rural Financial Services Programme since 2008. Financial cooperative membership to financial cooperatives has grown from 650,000 in 2008 to about 1,150,000 as at end December 2012. There has also been increased implementation of the Village Savings and Loan Associations (VSLA) and Savings and Credit Cooperatives (SACCOs) programs by both Non-Governmental Organizations (NGOs) and Government, and increase in use of mobile money services. Centenery Bank is leading the way in working with micro-finance institutions to expand the financial sector.

21.        Madam Speaker, access to financial services is key. The financial sector will be deepened by proposing amendments to the Financial Institutions Act to allow new innovations in financing. These innovations include agent banking, Islamic banking, micro insurance, and mobile money. I am happy to report that Uganda Re has started operations this year. The monitoring and supervision of micro-finance institutions will be enhanced to improve management and governance, and ultimately build trust and confidence. Government will also formulate a Microfinance Regulatory and Supervisory Framework to regulate and provide guidelines on the provision and accessing of financial services by all microfinance institutions.

Investment

22.    Madam Speaker, driven largely by private sector, the investment rate rose to 25.2% of GDP compared to 24.5% in the previous year. While the trend in investment is encouraging, key findings from the Investor Survey Report (2012) estimates survival rates of investments in Uganda at 46%. This is on account of projects being negatively affected by high cost of borrowing, limited access to credit, and energy and transport infrastructure bottlenecks. The survey reveals that the most binding constraints to investors are poor infrastructure such as inadequate all-weather roads, reliable power, and piped water; and a skilled human resource.

23.    Madam Speaker, during the year, Government tabled the Public–Private Partnerships (PPP) Bill before Parliament. The proposed law aims to efficiently mobilize Private Sector investment in the development of key infrastructure projects that boost competitiveness. Preparatory work for some PPP projects was started, including the relocation of Kigo Prison; and the Uganda Police housing project

Economic Outlook

Macroeconomic Objectives

24.        Madam Speaker, ultimately, the maintenance of macroeconomic stability is vital for Uganda’s long-term economic growth and structural transformation. The macroeconomic objectives underlying the budget strategy next year and over the medium term, are therefore the following:

               i.        achievement of  real economic growth of at least 7% per annum;

             ii.        Keep annual consumer price inflation to within single digit;

            iii.        The maintenance of a prudent level of foreign exchange reserves of about five months import cover, to mitigate external shocks and;

            iv.        The maintenance of a competitive real exchange rate to support the growth of exports, but take care not to destabilize local investors.

25.    Madam Speaker, the economy is expected to accelerate its recovery to an estimated growth rate of 6.0 percent per annum next financial year. This continued recovery in growth is premised on maintaining macroeconomic stability, and improving resource mobilization and utilization. In addition, investment in priority sectors including the commencement of major infrastructure projects will spur economic growth.

26.    Inflation is projected to average about 6% p.a next financial year and around 5% over the medium term. The exchange rate, which is a key determinant of economic competitiveness and has a major effect on the resource envelope, is expected to remain stable owing to the improvement in the trade balance.

Financing Infrastructure

27.        Increased investment needs will require non-traditional approaches to supplement our domestic revenues and external finance. In addition to traditional grants and concessional loans, other non-traditional financing sources such as limited non-concessional borrowing, contractor facilitated finance or suppliers’ credit, and using the external and domestic debt markets will be judiciously used to finance key infrastructure investments.

28.        Government will increase external borrowing to scale up essential investments in infrastructure, particularly in roads, railways, energy and water for production. Preference will be given to contracting debt on concessional terms in order to maintaining debt sustainability.  I wish to reiterate that non-concessional borrowing for consumption expenditures is not productive, as it does not generate the necessary returns required to enhance growth and development. Any future borrowing therefore, both from external or domestic sources, will only be secured for financing the productive sector, specifically to address our infrastructure needs, where we are sure net costs of the project to the country are outweighed by the net benefits.

Business Climate

29.        Madam Speaker, in order to simplify business licensing, I am pleased to announce that an e-licensing registry was launched on June 11th, 2013.  Uganda Registration Services Bureau (URSB) will host and coordinate all relevant stake holders in transitioning their processes to an online service. The total saving anticipated from the implementation of this portal is Ushs 32.1 billion. KCCA implemented a 25% reduction in Trade License fees that was issued by the Minister of Trade, Industry and Co-operatives.  KCCA further streamlined the time taken to issue a Trade License through decentralization of issuing authority and this has reduced the time from 60 days to 4 working days. These reforms translate into annual cost savings of Ushs 23.4 billion.

Employment

30.        In order to partly address the challenge of unemployment, Government has implemented the Youth Venture Capital Fund to enable youth start up enterprises. Over 5,200 small businesses have been supported through this scheme and U. Shs. 21 bn had been disbursed to eligible youth by the end of May 2013. A detailed report is before Parliament.

                                                                   IV.    Financial Year 2013/14 Budget Strategy

31.        Madam Speaker, in the next year, Government will accelerate implementation of interventions aimed at improving competitiveness and reducing the cost of Doing Business.  Key aspects to this strategy will be the acceleration of investment in infrastructure.

Infrastructure Development Strategy

32.        Madam Speaker, Infrastructure Development will address gaps to reduce the cost of doing business, promote private sector growth and create jobs. Improved infrastructure will stimulate increased output in the productive sectors through Value Addition, particularly in Agriculture, Manufacturing and the Services. Accelerating road infrastructure development will enable connectivity between centers of production, processing and national and regional markets, that increases Uganda’s export earnings. Increased electricity generation, transmission and distribution infrastructure will increase productivity.

Business Environment

33.        Government will continue improving the business climate for better private sector competitiveness. Government of Uganda will continue to further efforts in reforming the licensing regime by unnecessary laws and regulations in order to streamline and simplify the business registration and licensing processes. Government will eventually fully automate these two processes. In order to increase the security to land ownership rights and enhance the role of land markets country-wide a further 21 zonal land offices, especially in northern Uganda, will be rolled out.

34.        Madam Speaker, the computerization of the land registry was completed during the year. The digitization of land titles has improved the security, retrieval and time for carrying out transactions requiring land titles.  Six zonal land offices have been operationalized to improve access and reduce cost of processing land titles across the country. 

35.        Government commenced implementation of business licensing reforms, following a review of licensing laws and regulations in various sectors. The total estimated saving from the reforms carried out this Financial Year is UGX 54.56 billion, representing 7.5% reduction from the total cost of 725.73 billion from the previous Fiscal Years.

36.        In addition several Commercial Laws enacted by Parliament had their regulations operationalized. Other key enabling legislation such as the PPP Bill, the Bio-technology and Bio-safety Bill, the Free Zones Bill, Anti-Counterfeits Bill, Insurance Amendment Bill; Anti–Money Laundering Bill and the Investment Code (Amendments) Bill, are before Parliament. Madam Speaker, I am appealing that these laws be enacted expeditiously to further enhance competitiveness.

Tackling Unemployment and Job Creation

37.        Madam Speaker, creating work opportunities for young people remains one of our most pressing development challenges. In the words of former British Prime Minister Margaret Thatcher, “…young people ought not to be idle because it is very bad for them and for the country. There are few worse things that society can do to its young than to leave them in limbo…”.

38.        While regulation of the labour market through promulgation of legislation for a minimum wage seeks to protect workers’ rights, this should not detract from the importance of creating employment of the vast majority of the unemployed. The first step to ensuring strong protection of workers’ rights is the creation of as many job opportunities as possible, while ensuring security and safety at work.  The rest will ultimately follow.

39.        Youth unemployment in Uganda is widespread due to a number of different causes:-

                     i.        A demographic “Youth Bulge” due to population growth

                   ii.        A mismatch between the mostly academic focused curriculum being taught under UPE and USE on one hand and the more technically based skills demand from the market place,

                  iii.        A prevailing mindset that “it is government’s job to provide jobs” as well as free basic education and healthcare;

                             iv.            An overall global economic context where governments (including Uganda) are rationalizing their operations i.e. moving away from state-subsidized enterprises and shifting to market-based economy.

40.        All these factors are happening against global economic crisis which has impacted foreign investment and the capacity of the domestic private sector to quickly expand job opportunities. Fortunately Uganda has a comparative advantage for agriculture production which is relative labour intensive and includes opportunities for all workers: Urban and rural; educated and less educated.

41.        Our overseas Uganda diaspora is also another solution of how to fight unemployment.  The diaspora send home foreign exchange and we often highly skilled.  They can be engaged to enhance not only to provide financial inflows, but also in efforts to collect the best international lessons in employment generation e.g. upgrading skills levels, exchange of knowledge and technical employment initiatives especially higher-knowledge industrial start-ups.

42.        The employment question is complex and cannot be solved by Government alone. Therefore, government (including the ministries responsible for Economic Development, Labour and Foreign Affairs) will collaborate with the private sector, the Uganda overseas diaspora and international development partners.  This collaboration will develop a well-designed employment market programme to address the various identified causes and formulate multi solution packages including basic education shifts, relevant technical education and quality assurance measures opportunities and modalities to include skills, knowledge and experience of the Uganda diaspora.

43.        Madam Speaker, the Budget Priorities for Financial Year 2012/13 continue to prioritise the following:-

                     i.        Productive Infrastructure

                   ii.        Agriculture Production and Productivity

                  iii.        Human Resources Development especially in technical skills

44.        The strategy will entail the following:-

                    v.        Creation of Jobs opportunities in agriculture and industry

                  vi.        Provision of rural electrification to agro-industries

                 vii.        Empowering agricultural production

               viii.        Ensuring food security, enhanced household incomes and creating market surplus for agro-processing and exports

                  ix.        Facilitating growth of the service sector

                    x.        Increase competitiveness at national and regional level.

                                         V.    Financial Year 2013/14 Revenue and Expenditure Framework

45.        Madam Speaker, before I elaborate the sector priorities for the next year, I would like to present the revenue and expenditure framework for the Financial Year 2013/14 Budget. The framework has been developed in line with the recent trends in the domestic, regional and international economy.  In particular, the framework has been impacted by GDP sluggish recovery of the global economy, the performance of domestic revenues and expected level of external support from development partners.

46.        Next financial year, total resource inflows are projected to amount to Shs 13,169bn.  Domestic sources will contribute Shs 10,509bn representing 81.1% of the total budget resource for the year. The Uganda Revenue Authority will collect taxes amounting to Shs 8,486bn; and Non-Tax Revenues of U. Shs 275 bn will be collected. The Budget will also be financed by issuing Government securities worth Shs 1,040bn on domestic markets; and net Government drawdown from our savings of Shs 708bn.

47.        Total external financing of the Budget will amount to Ushs 2,660bn, equivalent to 20 per cent of the total while project aid amount to resources. Budget support comprises of Shs 213 bn while Project aid amounts to Shs 2,447bn, an increase of Shs.234bn over the financial year now ending.  There is need to examine non-traditional sources of financing in light of declining budget support.

48.        The resources available to finance discretionary Government expenditure next year, therefore amount to Ushs 9,498bn, excluding project aid and statutory external and domestic debt repayments which amount to Shs 2,695bn. The total resources available for discretionary Government expenditure next financial year represent an additional Shs 1,427bn above the level in the year now ending.

                                       VI.     Financial Year 2013/14 Sector Performance and Priorities

49.        Madam Speaker, the sector performance over this year serves as a basis for priorities for next year. There has been significant progress with implementation of the priority interventions that I announced in last year’s budget statement. This progress has contributed to economic recovery significantly, following the challenges of increasing prices and volatile exchange rates that Uganda and the East African region has faced. I now wish to elaborate the sector priorities for next year.

50.        Madam Speaker, the Financial Year 2013/14 Budget will continue prioritising the creation of an enabling environment for growth, development and socio-economic transformation. Sector priorities to achieving these goals are as follows:-

                     i.        Aggressively continue to invest in infrastructure development particularly in Transport and Energy;

                   ii.        Support Increased Agricultural production and enhancing productivity;

                  iii.        Enhance Scientific Innovation for Industrialisation and Private Sector Competitiveness;

                  iv.        Improve the Quality and Access in Social Service Provision in Health Water and Education; and

                    v.        Enhance Transparency and Accountability to improve Value for Money and fight Corruption vigorously in Public Service Delivery.

1.  Infrastructure Development

51.        Madam Speaker, Government will continue to build Uganda’s stock of infrastructure to serve as the springboard for economic growth and development. Interventions in this area will include the improvement of transport, provision of electricity, the development of the oil and gas sector and enhance information and communication technology.

Transport Infrastructure

52.        Madam Speaker, in accordance with Government’s priority accorded to transport infrastructure, I have allocated Ushs 2,395 bn to the roads and works sector next financial year, an increase from UShs. 1,650.8 bn this year. The additional allocation to Roads and Works budget totals Shs 744.7 billion over the last year’s provision.

53.        During the forthcoming financial year, we have prioritized clearing of outstanding contractual obligations for completed roads, completion of ongoing projects and commencing construction of new ones. IN this financial year, regardless of the challenges, Government ring-fenced money for payment of contractors certificates. Government will also accelerate efforts to rehabilitate the country’s railway network, and improve the quality of water transport on the major water bodies. The key interventions to be undertaken next year include the construction and rehabilitation of major strategic national roads, new bridges, equipping local government road units, and the maintenance of district and community roads. This is aimed at stimulating increased agricultural production, improving connectivity to Tourist site and facilitating national and regional trade.

Roads

Road Construction

54.        Madam Speaker, the construction of various national roads has progressed satisfactorily:

1. A total of 518 kms of national roads were fully or substantially completed. These are:-

                     i.        Kabale - Kisoro – Bunagana/Kyanika (101 km)

                   ii.        Masaka – Mbarara (154 km)

                  iii.        Busega – Masaka (120 km)

                  iv.        Nyakahita – Kazo (143km)

b.   A total of 327 km of national roads have their construction on schedule. These are:-

                     i.        Fort Portal – Bundibugyo-Lamia (104km) with the Fortportal – Sempaya section being fully completed.

                   ii.        Overlay of Kawempe – Kafu (166 km)

                  iii.        Jinja – Kamuli (57km).

c.    A total of 88 km of the following national road project have had contracts signed and land compensation is underway. These are:-

                     i.        Mbarara – Kikagati – Murongo Bridge (74km).

                   ii.        Mbarara Bypass (14 km).

55.        Madam Speaker, a total of 626 km of national roads have completed designs for upgrade from gravel to tarmac. These are:-

                     i.        Muyembe– Nakapiripirit, and Moroto – Kotido road (200km);

                   ii.        Rwenkunye – Apac – Lira – Kitgum – Musingo road (230km);

                  iii.        Hoima – Butiaba – Wanseko road (111km); and

                  iv.        Kayunga – Galiraya road (85km).

56.        In addition, the design for dualling of Kibuye-Busega - Mpigi (30km) and Kampala Northern Bypass (17km) has been completed.  The design of Kampala - Jinja Expressway (80km) is being finalised.

57.        Madam Speaker, in the next year, the construction of 1,363 Kms of the following ongoing roads projects will be accelerated:-

         i.        Atiak-Afogi (104km);

       ii.        Fort-Portal–Bundibugyo (103km);

      iii.        Nyakahita–Kazo (68k);

      iv.        Kazo–Kamwenge (75km);

        v.        Mbarara–Kikagati (74km);

      vi.        Malaba–Bugiri (82km);

     vii.        Tororo–Mbale (49km);

   viii.        Mbale–Soroti (103km);

      ix.        Jinja-Kamuli (58km);

        x.        Moroto-Nakapiripiriti (95km);

      xi.        Gulu–Atiak (74km);

    xii.        Vurra–Arua–Koboko –Oraba (95km);

   xiii.        Hoima–Kaiso–Tonya (85km);

   xiv.        Ishaka-Kagamba (35.4km);

     xv.        Kampala-Masaka Intermediate Sections (51km);

   xvi.        Rehabilitation of Mukono–Jinja (52km);

  xvii.        Mbarara–Ntungamo (59km);

xviii.        Ntungamo-Kabale-Katuna (65km);

   xix.        Kayunga-Galiraya (88.5km); and

     xx.        Kampala–Entebbe Expressway (51km).

58.        Madam Speaker, Government will also commence the construction of 837 km of the following new road projects:-

   i.        Atiak-Nimule (35km);

 ii.        Kyenjojo-Fort Portal (74km);

iii.        Mbarara-Bypass (14km);

iv.        Dualing of Kampala Northern Bypass (17.5km);

  v.        Masaka-Bukakata (41km);

      vi.    Kamwenge-Fort Portal (66km);

     vii.    Ntungamo-Mirama Hills (37km);

   viii.    Kigumba-Bulima-Kabwoya road (135km);

      ix.    Rehabilitation of Mukono-Kayunga-Njeru road (94km);

        x.    Rehabilitation of Kafu-Karuma road (88.5km);

      xi.    Rehabilitation of Kamudini-Gulu road (65km);

    xii.    Ishaka-Katunguru Road (56km);

   xiii.    Designing of Zirobwe-Wobulenzi road (23km); and

   xiv.    Design of Seeta-Kiira - Matugga - Wakiso / Najanankumbi - Busabala (64km).

59.        Madam Speaker, I have also allocated funds for the clearance of outstanding payments for the following completed roads:-

                     i.        Kabale – Kisoro – Bunagana/Kyanika (101km);

                   ii.        Matugga-Semuto (41km);

                  iii.        Kampala-Gayaza-Zirobwe (44km);

                  iv.        Jinja-Bugiri (72km);

                    v.        Masaka-Mbarara (149.2km);

                  vi.        Busega-Muduuma-Mityana (57km);

                 vii.        Kawempe – Kafu (166km); and

               viii.        Kampala-Masaka, Package A (63km).

60.        Madam Speaker. Government is also negotiating financing from the World Bank, African Development Bank and Islamic Development Bank to commence the upgrade of the following roads next year:-

         i.    Kapchorwa-Suam;

       ii.    Rukungiri-Ishasha;

      iii.    Kamuli-Bukungu;

      iv.    Soroti-Katakwi-Moroto;

        v.    Mbale-Igale-Lwakhaha;

      vi.    Tirinyi-Paliisa-Kumi-Ngora;

     vii.    Atiak-Adjuman-Moyo;

   viii.    Nabumali-Butaleja-Namutumba

61.            Government has allocated its own resources to finance the following roads to commence the upgrade next year:

               i.  Mpigi-Kabulasoke-Maddu-Sembabule

             ii.  Nyendo-Sembabule

            iii.  Olwiyo-Anaka-Gulu-Kitgum;

            iv.  Musita-Nankoma-Majanji;

              v.  Mukono-Kyetume-Katosi;

62.        Madam Speaker, the construction of some roads is behind schedule, as a result of delays by the contractors to mobilise machinery, land compensation, delayed environmental approval by NEMA and delayed completion of design reviews. This underscores the need to improve procurement, contracting and implementation of Government projects. The affected projects include:

         i.        Mbarara – Katuna (124km);

       ii.        Tororo – Mbale (49km);

      iii.        Mbale – Soroti (102km);

      iv.        Vurra-Arua-Koboko-Oraba (92km);

        v.        Gulu- Atiak (74km);

      vi.        Ishaka–Kagamba (35.4km);

     vii.        Ntungamo–Mirama Hill (37kms);

   viii.        Moroto–Nakapiripiriti (93.3kms);

      ix.        Kampala-Entebbe Expressway (51km);

        x.        Atiaka-Nimule (33Km).

      xi.        Jinja - Mukono (52Kms).

Road Maintenance

63.        Madam Speaker, I propose to allocate an additional Ushs 72.7bn to the Uganda Road Fund to enhance funding for national road maintenance. The total allocation in the Road Fund now amounts to Ushs 352.98bn. The Uganda Road Fund will fund routine maintenance of 22,500km of District and Town Council roads and 4,500km of Kampala Capital City Authority (KCCA) and Municipal Roads as well as removal of bottlenecks on 30,000km of Community Access roads.

64.        A further 1,670 km of paved roads and 9,000 km of unpaved roads will undergo routine maintenance by the Uganda National Roads Authority. An additional 750 km of unpaved roads will be re-graveled and the periodic maintenance of various bridges undertaken. District roads will also be maintained using recently acquired road equipment at district road units. Furthermore, Independent Parallel Bid Evaluation that has contributed to the reduction in national road costs will be extended to national road maintenance to enhance value for money. Independent Bid evaluation of road bids has seen the unit cost of roads reduce from US 1 million per kilometer to US 700,000.

65.        Proposals to amend Road Fund Act will be tabled in Parliament next year to ensure adequate and timely provision of funds for road maintenance and rehabilitation, as this will increasingly require support given the large investments in road development.

66.        Madam Speaker, with support from the World Bank, Government will next financial year commence the rehabilitation and reconstruction of the road network in 14 Municipalities across the country. These include Arua, Gulu, Lira, Moroto, Soroti, Mbale, Tororo, Jinja, Entebbe, Masaka, Mbarara, Kabale, Fort Portal and Hoima. In addition, Kampala Capital City Authority will continue to be supported to improve the road network within the city and accelerate the programme for introduction of the Rapid Bus Transit System in order to decongest the city

Bridges

67.        Madam Speaker, over the last year the following progress was recorded in respect of bridge construction:

a.   Bridges Completed

                     i.        Daca, Ore, Eventre and Uzungo on Wandi-Yumber road

                   ii.        Apak bridge in Lira; and

                  iii.        Bulyamusenyu Bridge;

                  iv.        Construction of the Atiak – Moyo – Afoji (Bridges) bridges is at advanced stages and will be completed by July 2013;

68.        Madam Speaker, during the forthcoming year, the following works on bridges will be undertaken:

                     i.        Rehabilitation of the existing Nalubale Bridge and the construction of Second Nile Bridge is scheduled to commence;

                   ii.        Construction of the Apak and Birara Bridges.

                  iii.        Construction works of the Ntungwe and Mitaano Bridges (Kanungu).

                  iv.        Complete construction of the Muzizi and Awoja bridges

                    v.        Complete construction of seventeen (17) bridges in North and North Eastern Uganda including Olyanai, Obalanga, Alipa, Ajeliek, Ojanai, Opot, Akol, Airogo ( all in Kumi); Balla, Abalang, Agali and Enget (Lira); Kochi and Nyawa (Moyo), using funding from the Islamic Development Bank.

                  vi.        Commence construction of Nyacyara, Goli, Nyagak, Enyau, Pakwara, Anyao and Alla bridges in West Nile.

69.        Madam Speaker, I have also provided resources to re-construct the bridges destroyed by the recent floods in various parts of the country, such as the Mubuku and Kilembe bridges in Kasese district.

Railway Transport

70.        Madam Speaker, in the rail sub-sector, the implementation of the following interventions to revitalize railway transport will be accelerated next year:

                     i.        Fast-tracking the rehabilitation of Tororo- Packwach and Kampala Kasese railway lines;

                   ii.        Commence design of Gulu – Atiak – Nimule – Juba  railway, to be constructed jointly by the governments of Uganda and South Sudan;

                  iii.        Complete design of the Standard-Gauge Kampala–Malaba railway line (251km).

In-land Water Transport

71.        Madam Speaker, Lake Victoria is central to Uganda’s overall economic objectives. The Lake is an essential factor is our regional integration strategy.  Bordered by Uganda, Kenya and Tanzania with river access to Rwanda and Burundi, it is home to over 30 million people living around its shores.  It is a pivotal part of Uganda’s alternative (Southern route) for export and imports to and from the Indian Ocean. Connecting us via Mwanza and then road or rail to Dar-es-salaam; or even to Kisumu Kenya and then to Nairobi and Mombasa by road or rail. 

72.        The development of water transport on Lake Victoria will  enable the following objectives to be met:-

               i.        Ensure a strategic alternative route to the sea

             ii.        Facilitate transportation of agricultural produce

            iii.        Support Uganda’s geographic location to be inland distribution hub to Rwanda, Burundi, South Sudan and DRC

73.        Revitalization of Lake Victoria by rebuilding port infrastructural and carrying out a definite navigational survey as well as environmental measures will enable the Lake to become a major waterway by facilitating and lowering the cost of transport to both domestic and regional destinations.  Together with my four Colleagues from other EAC countries, we are seeking multilateral assistance for a regional integration development project with Lake Victoria at its centre. As a positive sign in support of the revitalization of the Southern route to the Indian Ocean through Dar es Salaam, the rehabilitation of the Marine Vessel Kaawa was completed during the year, and is operating between Port Bell and Mwanza.

74.        Madam Speaker, during the year the Lwampanga – Namasale ferry was commissioned and the rehabilitation of the Laropi ferry is underway. The Kayunga (Kasana) and Mbulamuti (Bugobero) ferry is undergoing trials and the construction of landing sites is being completed. One of the two new Kalangala Infrastructure Services (KIS) ferries was launched; and the ferry previously used in this area will be refurbished and deployed to the Kiyindi – Buvuma crossing.

75.        Madam Speaker, in the next year Government will continue to improve the inland water facilities by providing ferry services and constructing landing sites. The Obongi-Sinyanya and Kayunga-Mbulamuti ferries will be commissioned and construction of the New Kampala Port at Bukasa will commence. These interventions will improve connectivity of various parts of the country and the entire East African region, and ultimately reduce transportation costs.

Electricity

76.        Madam Speaker, the 250 MW Bujagali Hydropower project was fully commissioned during the last financial year. In addition a number of small renewable hydropower projects delivering a total of 68.5 MW to the national grid have been commissioned. These include Buseruka (9MW), Nyagak I (3.5MW), Kisizi (0.26MW), Bugoye (13MW), Mpanga (18MW), and Ishasha (6.5MW).

77.        The detailed feasibility study and engineering designs for the 188 MW Isimba Hydropower Project was completed, and arrangements for its financing are underway. With support from the Government of Japan, the pre-feasibility study for the 600MW Ayago Hydropower Project was completed and the detailed engineering designs are being prepared. The construction of the Karuma Hydropower Project (600MW) has faced procurement challenges, but will commence in next financial year. In addition, the Global Energy Transfer Feed-in-Tariff (GETFiT) East Africa Pilot Project was launched, and will support construction of a further 15 mini-hydropower projects that will deliver a total of 125MW over the next three years.

78.        Madam Speaker, under the Rural Electrification schemes a total of 2,322 km were under construction. These include:

         i.        Mubende-Kyenjojo (156Km)

       ii.        Rakai-Isingiro; Lyantonde-Lumbugu; Kaliro-Lwebitakuli; and Sembabule-Lwemiyaga (283 km)

      iii.        Kabale-Kisoro (166 km)

      iv.        Rwachikoko-Awere-Laloi( 58km)

        v.        Gulu-Adjumani-Moyo( 238km)

      vi.        Apala-Adwari-Kiru-Morulem (109km)

     vii.        Ibanda-Kazo (137 km)

   viii.        Soroti-Katakwi (96km)

      ix.        Ayer-Kamdini-Bobi (90km)

        x.        Ntenjeru and Environs (75km)

      xi.        Ruhiira Millenium Project (106 km)

    xii.        Nkonge-Kashozi (177 km)

   xiii.        Masindi-Waki-Buliisa (178km)

   xiv.        Gulu-Acholibur  with Paicho-Patiko-Palaro tee-off (118km)

     xv.        Opeta-Achokora (58 km)

   xvi.        Wakiso/Mpigi/Mityana/Busuunju (43km)

  xvii.        Lwengo/Mbarara/Isingiro/Ibanda/Kiruhura (58km)

xviii.        Bushenyi/Buhweju/Kasese/Kyenjojo (48 km)

   xix.        Rukungiri/Kanungu/Ntungamo/Kabale (78 km)

     xx.        Kasese District Rural electrification (28 km)

79.        Consequently, a number of district headquarters were connected to the main grid. These include: Nakapiripit, Amudat, Kaberamaido, Dokolo, Amolatar, Ntoroko, Alebtong, Moroto, and Napak, Kiruhura, Kyegegwa and Katakwi.

80.        Furthermore, the following community schemes have been under implementation:-

   xxi.        Kikubamitwe Village, in Luwero (3 km)

 xxii.        Rusekere Secondary School in Fortportal (0.6 km)

xxiii.        Namazige-Kasenge in Mukono (1 km)

xxiv.        Simba Farms in Ibanda (0.2km)

  xxv.        Cougar Industries Ltd in Mukono (0.6 km)

xxvi.        Nine resettlement villages in Bujagali, Jinja (15.9 km)

xxvii.        Omagoro Village in Kumi ( 1 km)

81.        Commencing next financial year, the electricity utility distributor Umeme has been required to install at least 60,000 pre-paid meters per year over the next five years, in order to ensure increased efficiency in electricity use, and also reduce distribution system losses through further investment in the distribution network. This will mean consumers will pay only what they consume.

82.        Madam Speaker, I have allocated an additional Ushs 25.73bn to the Rural Electrification Programme to facilitate the extension of electricity to the under-served areas of the country including the district headquarters. We thank development partners for their support in this area.

Oil and Gas

83.        Madam Speaker, during the last year the following legislation for prudent management of Uganda’s oil resources framework was passed by Parliament. This legislation includes the following:-

                   i.        The Petroleum (Exploration and Production) Bill 2012

                 ii.        The Petroleum (Refining, Gas Processing and Conversion, Transportation and Storage) Bill 2012

84.        Madam Speaker, there is need to expedite the consideration of the Public Finance Bill 2012, still pending before Parliament, which contains the framework for management of petroleum revenues, among other reforms.

85.        Madam Speaker, next year, the construction of the Kenya – Uganda and Uganda - Rwanda Oil pipelines using the Public Private Partnership arrangement will be fast tracked. I have also allocated an additional Ushs 3.0 billion to National Environment Management Authority to conduct the Environmental Impact Assessment for the Gas and Oil exploration and development in the Albertine region.

Minerals

86.        In order to promote mineral investment, a Geological and Mineral Information System (GMIS) to host geological and mineral data has been established. This will provide a one Stop Centre for all geological and mineral information country wide, which is now accessible to potential investors. In addition, a computerized mining registry will expedite mineral licensing, the timely generation of revenues and provide transparency and accountability in the management of mineral rights.

87.        In the forthcoming year and the  medium term, Government will undertake the following interventions to enhance mineral development:-

               i.        Promote optimal use of minerals and mineral trade for social improvement of the people.

             ii.        Provide technical services in the field of geosciences to guide national planning and development.

            iii.        Ensure best mining practices and accountability.

            iv.        Promote mineral value addition and trade to increase revenues.

              v.        Gazette geo-sites and geo-parks; and

            vi.        Complete preparation of an earthquake administration policy, and an earthquake disaster management plan

ICT, Science and Technology

88.        Madam Speaker, during the year, Government completed the readiness for commercialization of the first two phases of the National Backbone Infrastructure (NBI) that enables access to the information superhighway by telecommunication companies and public institutions connected to the Infrastructure. The Business Process Outsourcing (BPO) Centre has continued operations, providing 100 jobs during the year, and an additional 150 jobs will be added next financial year.

89.        The e-Government Master Plan was developed in collaboration with Government of Korea. The plan provides priority Information Technology projects for implementation, so as to improve service delivery. Cabinet also approved the strategy for the rationalization of IT initiatives and services in government so that IT programmes in Government in across government can reduce implementation costs. During the year, regulations for Cyber Laws have been approved and their enforcement will commence next financial year.

90.        Madam Speaker, innovations in Information and Communication Technology, Science and Technology are no longer an option in today’s global competitive economic environment. Science and Technology has been a major factor behind the success of the world’s fastest growing economies in South East Asia and Latin America. Unprecedented developments in Information and Communication Technology have permitted the growth of products and services with a significant increase on factor productivity and firm profitability.

91.        Madam Speaker, in the next year, Government will continue to support Scientific and Technological innovation to drive value addition, increase our competitiveness in the global market and create employment among other benefits. The National Backbone Infrastructure will deliver bulk Internet bandwidth to connected Government at a cheaper cost and Information Technology (IT) service use will be mainstreamed across Government to avoid duplication and minimize cost. This will also improve Information Security, and reduce incidences of electronic fraud. The 700km third phase of the re-designed National Backbone Infrastructure will be implemented. This will provide connectivity to the Rwanda-backbone through Katuna; and the Tanzania-backbone through Mutukula, hence allowing alternative access to the coastal internet submarine cable.

92.        Digital Television transmission will be implemented and Cyber laws operationalized. Government shall also develop and disseminate Business Process Outsourcing (BPO) operations standards; and setting up Information Technology Parks to host BPOs and related ICT service companies Government will establish fully serviced Industrial and Information Technology (IT) parks in various regions of the country over the medium term.

2. Agricultural Production and Productivity

Agriculture

93.        Madam Speaker, agriculture continues to play a critical part of our economy. The sector employs about 66 per cent of Uganda’s total labour force, and the vast majority of our population and directly and indirectly depend on it. It not only generates incomes and a livelihood for the majority of Ugandans, but has a great potential to transform the economy.

94.        Agriculture is a private sector activity, for which Government will continue to provide support towards its further development in research, seed multiplication and certification, and disease control. Other key interventions relate to provision of extension services and support for agro-processing to agricultural produce. This will be done with an emphasis on rolling out the Commodity Based Approach that focuses on Ten (10) key food security and household income commodities. The commodities are maize, beans, coffee, market fruits and vegetables, rice, bananas, fish, dairy and beef cattle.

95.        Madam Speaker, during the year, Over 35,000 farmers directly benefited from provision of improved maize seed, in addition to accessing inputs such as fertilizers, under the commodity approach. Furthermore, a total of 13,486 kg of foundation seed for Arabica coffee, beans, maize and rice, were distributed to seed companies and farmer groups.   The rehabilitation of all the three irrigation scheme of Mubuku, Doho and Agoro is also substantially complete.

96.        Next year, Government will reform the National Agricultural Advisory Service (NAADs) to create a single spine Extension system at the Ministry of Agriculture. NAADS will also develop a rural agri-business initiative to disseminate knowledge on how to promote profitable agriculture enterprises across the country.

97.        In an effort to increase the availability of improved seed for farmers, Government has adopted a concerted approach to ensuring the availability of improved seed varieties and animal breeds. Building on successes in improved seed varieties and breeds by the research organisations, improved seed and breeds will be multiplied and distributed extensively across the country. The multiplication of improved seed will be implemented with the coordination between the ministries of Agriculture, Local Government and Finance, together with the Uganda Prisons Service and private sector operators.

98.        Furthermore, on-going efforts to rehabilitate large scale irrigation schemes and promotion of small scale and affordable irrigation technology will be accelerated. The rehabilitation of the Olweny, scheme will commence next year, together with 33 schemes in other districts. Feasibility studies are planned for the rehabilitation of Atera, Labori, Odina and Kiige irrigation schemes. This will reduce excessive reliance on natural weather for agricultural production. Our approach is to invest where the private sector cannot do well.

99.        Madam Speaker, I have allocated Ushs 394.4bn to the Agricultural Sector next year. I have also provided an additional Ushs 9.2bn to strengthen Fisheries Department in enforcing fishing regulations and standards.

3. Tourism Development

100.     Madam Speaker, in order to improve accessibility to tourist sites, road access to Kidepo Valley National Park is under maintenance and works on the Ishasha – Katunguru road have commenced. Contractors for the Kisoro-Mgahinga, Kyenjojo-Hoima-Masindi and Kabwoya – Kyenjojo roads are being procured.

101.     In order to enhance hospitality standards, 20 East African Community accredited hotel assessors were trained and the inspection of hotels accommodation was completed and their Grading and Classification will be undertaken next financial year. 182 students were enrolled at the Hotel Training Institute at Jinja, and a further 390 students graduated in May 2013.

102.     In support of domestic tourism, two multi-stakeholder platforms in the Kigezi and Busoga regions were launched to spearhead the identification of local tourist products and their development. Government will continue to support tourist platforms as vehicles for promoting domestic cultural and other product development in related.

103.     Madam Speaker, the key constraints to Uganda’s tourism include poor physical connectivity to tourist sites, inadequate tourist information, low levels of ICT provision of tourist services, inadequate specialised human resources for the hospitality industry and our low investment in building and marketing the country as a tourism brand.

104.     Next financial year, Government will continue to provide the necessary facilities and establish a conducive investment climate for tourism development through the following interventions:

                     i.        Develop a comprehensive Tourism Sector Development Action Plan;

                   ii.        Continue supporting the hotel, tour and guide businesses to provide world-class hospitality business;

                  iii.        Rehabilitate road access to tourist sites;

                  iv.        Support skills training of critical tourism sector human resources including the re-construction of the Uganda Hotel and Tourism Training Institute at Jinja;

4. Increasing Social Service Delivery

105.     Madam Speaker, social welfare indicators such as literacy, safe water coverage, and the reduction in infant and maternal mortality rates, depict progress of society’s well-being and human development.

Education

106.     Madam Speaker, during the year, Government enhanced salaries for Primary School Teachers by 15%, and 30% for Science Teachers in Post Primary Education and Training Institutions. In an effort to reduce teacher absenteeism, the percentage of teachers at task improved from 60% in 2011 to 77% in 2012. In addition, head teachers at task improved from 63% in 2011 to 70% in 2012. We will continue to monitor these performance indicators.

107.     Madam Speaker I have allocated over UShs 1,801 bn, representing 13.3 per cent of the total budget to the education sector to impart the necessary skills and  knowledge required to tap the creative abilities of individuals, in order for them to lead a better life and enhance society’s wellbeing. The following interventions will be undertaken in the Education Sector to increase access to quality and appropriate education:-

         i.        Accelerate Government investment in vocational and business training including supporting the Private sector to provide the youth with the requisite skills for job creation.

       ii.        Forge a strong relationship between education institutions and private companies to design and provide appropriate training programmes in line with the needs of the labour market.

      iii.        Provide adequate infrastructure, in-service teacher training, strengthened supervision, through a diversified mix of housing, training and professional development and a clear career structure through the scheme of service at all levels to improve the quality of teaching and learning;

      iv.        Promote science and technical education through provision of incentives for science, mathematics, technical and vocational education, supporting science and research development, encourage the private sector to support science education and equipping schools with science laboratories;

        v.        Bridge the gender gap in access to education by creating girl friendly school environment such as separate sanitary facilities, and non-tolerance to sexual harassment among others;

108.     Madam Speaker, Government will also implement key interventions in the education sector to enhance efficiency and effectiveness, and address the quality. These are the following:-

         

a.   Students Loan Scheme: Government will implement the Student Loan Scheme initially for Science, Medical and Engineering students in higher institutions of learning. The Student Loan Scheme will also be complemented by the Bonding of students to Government employment after their respective courses, which will serve towards the repayment of the Student Loan. I have allocated an additional Ushs 5.0 billion towards operationalization of the Student Loan Scheme.

b.   Teachers SACCOs: In line with the Government policy of encouraging savings, improve access to credit and uplift the welfare of Teachers, I have allocated a total of Ushs 5.0 billion to support Teacher SACCOs across the country.

Health

109.     Madam Speaker, an additional 6,172 Health Workers were recruited for Health Centers and the remuneration of Medical Officers at HC IVs was enhanced to Shs. 2.5m per month inclusive of consolidated allowance.  The construction and equipping of the Government of Japan-funded Kabale and Hoima Regional Referral Hospitals was completed. Procurement is underway for contractors for Mulago National Referral Hospital rehabilitation and the construction of the Kirudu and Kawempe hospitals.

110.     In addition to the seven immunizable disease vaccines, the Pneumococcal Conjugate Vaccine (PCV) against pneumonia was launched in April, 2013 with support of the Global Alliance for Vaccines Initiative (GAVI), and immunization campaigns were conducted in 49 districts.

111.     Madam Speaker the reduction in morbidity and mortality from the major causes of ill health and premature death and reduction of disparities in the provision of health services is a major focus next year. The following interventions will be implemented:-

                     i.        Develop and Implement a comprehensive Strategy for Malaria Eradication to build on current efforts of prevention, diagnosis and treatment

                   ii.        Continue improvement in health infrastructure by rehabilitating and equipping National and Referral Referral  Hospitals and Health Centres;

                  iii.        Recruit key health care personnel to ensure adequate staffing, especially to increase access to quality maternal and child health care.

                  iv.        Provide staff housing for health workers with special attention on under-served areas;

                    v.        Formulate an appropriate legal and regulatory framework for the establishment of the national health insurance scheme;

                  vi.        Accelerate the ongoing campaign to prevent and control communicable and non-communicable diseases through immunization, awareness campaigns and provision of equipment.

                 vii.        Equip key health facilities such as Uganda Heart Institute, Uganda Cancer Institute and Uganda Blood Transfusion Services among others, and partnering with the private sector to establish facilities for highly specialized treatment.

               viii.        Improve the governance and efficiency in health service delivery through increased joint supervision and monitoring in collaboration with non-Governmental health institutions.

Safe Water Coverage and Sanitation

112.     Madam Speaker, to increase the benefits of access to safe, water and sanitation facilities, Government has undertaken the following key activities, over the last year:

               i.        Construction of piped water supply works in Kiruhura (95%), Kazo (92%), Kakuto(70%), Kakyanga (80%), Lyantonde (80%);

             ii.        Completion of Phase One of the Tororo-Manafa Gravity Flow Scheme; and continuation of construction of the Kanyampanga Gravity Flow Scheme.

            iii.        Bore holes drilling in several districts including Namayingo, Lira, Mubende, Apac, Oyam, Kaliro, Butaleja, Luwero, Namutumba, Kumi, Ngora, Kaberamaido, Lwengo, Kaliro and Tororo among others.

            iv.        Implementation of Piped water schemes in the towns of Nakasongola, Kalungu, Wobulenzi, Rakai, Kinoni, and Mbirizi

              v.        Rehabilitation of water works is at various stages in the districts Wakiso Luwero, Masindi, Mityana, Buikwe, Kagadi, Kakumiro, Kiboga, Mubende, and Butambala among others.

            vi.        Progress with Construction of the Lubigi Sewage System;

113.     Madam Speaker, in order to increase access to quality water and sanitation,  Government will focus on the following interventions next year:

                     i.        Upgrade Ggaba Water Works treatment facilities and construct Namasuba Hill reservoir

                   ii.        Construct motorised boreholes (deep wells) and large Gravity Flow Schemes and provide rainwater harvesting technologies;

                  iii.        Complete construction of the Lubigi Waste Water Treatment Plant, and rehabilitate Bugolobi sewage treatment plant;

                  iv.        Commence construction of Nakivubo and Kinawataka Waste Water Treatment Plants, and

                    v.        Continue provision of sanitary Ecosan toilets in schools, and mobilize communities for better hygienic practices, such as hand washing.

5. Strengthening Accountability in Public Service Delivery

114.     Madam Speaker, the challenge of service delivery in Uganda is not lack of sufficient financial resources, but the achievement of maximum efficiency and effectiveness in the utilization of limited resources. Challenges to service delivery include delayed implementation of Government projects, lack of adherence to financial management procedures, corruption and misappropriation of public resources. The Government’s is committed to improving transparency and accountability in order to achieve enhanced service delivery, for which has undertaken several reforms.

115.     Madam Speaker, I am happy to report progress has been made, even as we continue to fully reform the system. It will take time but Uganda will get there. In order to tackle the weaknesses in institutional governance and improve service delivery, Government will undertake the following measures next financial year:-

i.     Strengthen the accountability and anti-corruption institutions such as the Inspectorate of Government, Auditor General’s Office, Uganda Police, the Judiciary and Public Accounts Committees, among others;

ii.   Institute an elaborate system of sanctions for delayed accountability. The Ministry of Finance will enhance its emphasis on quarterly performance reporting to monitor programme implementation;

iii.  Rollout the Integrated Financial Management System (IFMS) in all Government Ministries, Departments and Agencies;

iv.  Fully implementation of all modules of the Integrated Personnel and Payroll System (IPPS) to link staff recruitment, payroll and salary processing, retirement and pension management and link the IPPS to the IFMS, to eliminate “ghost’ workers;

v.    shall improve coordination, monitoring, inspection and evaluation of Government programmes at all levels;

vi.      Coordinate Implementation of the National Identity (ID) Card Project with the National Census and the Electoral process; and

vii.     Review the Public Investment Plan (PIP) projects to include only those for which cost-benefit analysis and feasibility studies have been conducted and for which sources of financing have been secured.

viii.   Government will also rationalize the current use of office space by Ministries and Government Agencies and develop a policy so as to move away from renting office space to construction of new Government office buildings.

116.     Madam Speaker, the Ministry of Finance has fully supported a Private Members Bill to seek further advancement to fight against Corruption. Other relevant Bills include the following:-

             i.          Anti-Money Laundering Bill which is aimed tracking funds gained from illicit activities and for enhancing global security;

           ii.          the Public Finance Bill which explicitly seeks to ensure timely and accurate reporting of Government funds spent and to place individual responsibility on accounting officers for proper management of funds under their control.

117.     I have accordingly allocated additional funds to the various anti-corruption institutions such as Office of the Auditor General, Criminal Investigation and Intelligence Directorate, Directorate of Public Prosecution, Inspectorate of Government, Ethics and Integrity to enforce accountability and Accountant General’s Office to facilitate the rollout of the Integrated Financial Management System (IFMS).

118.         Madam Speaker, experience from the successful developing countries shows the importance of fiscally sustainable and well-functioning local governments for delivery of public services. Local governments have an advantage of being closer to the recipients of such services, but they may not use this advantage if they lack effective administrative structures and resources.  During the last two decades the number of district governments in Uganda has more than doubled. It is now time to implement reforms aimed at improving their performance, in particular increasing value-for-money in the services they provide. This would involve bringing greater stability in the districts and intergovernmental system, enhancing its institutional design, and redesigning funding of the district governments. 

119.     The following actions will be emphasized in this regard:

i.     Review the staffing models of district governments.

ii.   Enhancement of the district governments’ own-sources of revenues to strengthen bottom-up accountability of district governments and will help alleviate fiscal pressures.

                                                               VII.        Constitutional Self Accounting Bodies

120.     Madam Speaker, the budgetary proposals of the following Self Accounting Bodies have been submitted in compliance with Article 155(2) of the Constitution.

                                   i).        Courts of Judicature

                                  ii).        Electoral Commission

                                iii).        Inspectorate of Government

                                 iv).        Parliamentary Commission

                                  v).        Uganda Law Reform Commission

                                 vi).        Uganda Human Rights Commission

                               vii).        Uganda Aids Commission

                             viii).        National Planning Authority

                                ix).        Office of the Auditor General

121.     In accordance with Article 155(3) of the Constitution, Government has made recommendations on these proposals. I hereby lay both the budgetary proposals and the recommendations of Government before this august House, as required by the Constitution.

122.     In order for me to submit a fully financed National Budget for your consideration in accordance with Article 155(1) of the Constitution, the budget provisions of these Self Accounting bodies are in accordance with the resource envelope conveyed to them in the course of budget preparation, including the presentation of the National Budget Framework Paper to Parliament, in accordance with the Budget Act 2001.

                                            VIII.        Financial Year 2013/14 Tax and Revenue Measures

123.     Madam Speaker the objectives of the various measures for the Financial Year 2013/14 are to raise revenues, enhance transparency in collection and enforcement, improve compliance and encourage investment. I will propose amendments to the tax laws to improve tax administration and enhance compliance. I will also highlight decisions reached at the East African Community (EAC) pre-budget consultative meeting.

Income Tax

Expansion of withholding tax agents

124.     Madam Speaker, I propose widening the scope of withholding agents to capture non-compliant tax persons engaged in economic activities and not registered for income tax purposes. This measure is expected to generate Shs 5billion. The details are contained in the Income Tax (Amendment Bill) 2013.

Provide collaboration between URA, KCCA and Local Governments in tax collection

125.     Madam speaker, I propose to provide a legal framework through which URA will collaborate with Uganda Registration Services Bureau, Local governments and KCCA to identify taxpayers and collect taxes on small businesses which are hard to reach by URA. This is aimed at easing tax administration and enforcing compliance by bringing more taxpayers into the tax net.

Value Added tax (VAT)

Eliminate VAT exemption on Hotel accommodation

126.     Madam Speaker, I propose to eliminate the VAT exemption on Hotel accommodation to improve tax administration and generate revenues. This measure will raise Shs.6 billion and details are contained in the VAT (Amendment Bill) 2013.

Eliminate VAT exemption on Supply of water for domestic use

127.     Madam Speaker, I propose to apply VAT on the supply of water to improve tax administration and generate revenues. This measure will raise Shs.8 billion and details are contained in the VAT (Amendment Bill) 2013. This should not affect the prices paid by the majority of low-income consumers, as the price of a jerrycan from National Water and Sewerage Corporation (NWSC) will amount to about Shs.40 at communal taps.

Eliminate VAT exemption on Wheat and flour

128.     Madam Speaker, I propose to introduce VAT on Wheat and wheat flour to improve tax administration and generate revenue. This measure will raise Shs.30 billion and details are contained in the VAT (Amendment Bill) 2013.

Rationalizing of exemptions

129.     In a bid to improve compliance and administration, I have rationalized the VAT exemptions in line with sector definitions and best practice.

Excise Duty

Increase of excise duty of 50 shilling on petrol and diesel

130.     Madam Speaker, I propose to increase excise duty on petrol and diesel by 50 shillings to increase revenue collections. This measure is expected to raise about Shs.72 billion and details are contained in the Excise (Amendment Bill) 2013.

Restore excise duty of 200 shillings on kerosene

131.     Madam Speaker, I propose to restore excise duty on kerosene at 200 shillings per litre to discourage the practice of adulterating diesel by mixing it with kerosene. This measure is expected to raise about Shs.15 billion and details are contained in the Excise (Amendment Bill) 2013.

Increase excise duty on cigarettes

132.     Madam Speaker, I propose to increase excise duty on cigarettes  from Shs. 22,000, 25,000 and 55,000 for Soft cup (whose local content is more than 70% of its constituents), other soft cup and Hinge lid respectively to Shs. 32,000, Shs. 35,000 and Shs. 69,000to collect more revenues. This measure is expected to raise about Shs.3.2 billion and details are contained in the Excise (Amendment Bill) 2013.

Increase excise duty on undenatured spirits

133.     In a bid to curb the excise duty evasion by some unscrupulous distillers of spirits, I propose to increase the excise duty from 70% to 140% at importation. 

Excise duty on Promotional Activities

Impose excise duty at 20% on revenue from promotion activities

134.     Madam Speaker, I propose impose excise duty at the rate of 20% on revenue from activities akin to gambling to expand the tax base. This measure will generate about Shs.8 billion. The details are contained in the Excise Tax (Amendment Bill) 2013.

Introduce an excise duty on money transfers

135.     Madam Speaker, I propose to impose an excise tax of 10% on fees charged on transfer of money by mobile network operators and other money transfer operators and widen the tax base. Details are contained in the Excise Bill 2013.

Stamps duty

Stamp duty on Third Party Insurance Policies for motor vehicles

136.     Madam Speaker, I propose to impose an extra 30,000 shillings on stamp duty on Third Party insurance Policies for motor vehicles to raise more revenues. This measure will generate about Shs. 12 billion. Details are found in the Stamps Duty (Amendments Bill) 2013.

Fees and Licenses

Increase Motocycle registration fees by Shs.70,000 from Shs.130,000 to Shs.200,000.

137.     Madam Speaker, I propose to increase motorcycle registration fees by 120,000 Shillings to raise more revenues. This measure will generate about Shs. 8.64 billion. Details are found in the Finance Bill) 2013

Increase Motor Vehicle registration fee by Shs.200,000=

138.     Madam Speaker, I propose to increase motor vehicle registration fees by 200,000 Shillings to raise more revenues. This measure will generate about Shs. 8 billion. Details are found in the Finance Bill) 2013

Non Tax Revenue

Introduce the International Calls Levy

139.     Madam Speaker, I propose to impose an International Calls Levy on international incoming calls and generate about Shs.43 billion. Details are contained in the Finance Bill 2013.

Implementation of the revised NTR rates by MDAS

140.     Madam Speaker, this FY I propose to revise some NTR rates through the Finance Bill 2013 to raise about Shs.32 billion. Details will be found in the Finance Bill 2013.

141.     In order to improve service delivery and expedite the process of payment, the public will be allowed to pay fees and other charges for services performed by MDAs using their mobile phones and internet for those who have access. This will reduce on congestion and time it takes to go the banks and wait for confirmation before getting the service.

Collection of Non-Tax Revenues

142.     Following the good performance of Uganda Revenue Authority in the collection of Non-Tax Revenues, I am extending the mandate of the Uganda Revenue Authority to collect all fees and other charges under the Uganda Registration Services Bureau, The Directorate of Citizenship and Immigration and the Ministry of Energy and Mineral Development collection. However, the assessment will remain under the MDAs.

143.     As part of encouraging Ministries, Agencies and Departments which collect Non-Tax Revenue, some will be allowed to retain the NTR and use it at source. However, this will be part of the funds appropriated by Parliament to them and their budgets will be reduced by the shortfall in case they fail to meet the targets. 

Lotteries and Gaming

144.     There has been unprecedented development in the lotteries and Gaming industry in the country.  This has necessitated a strong regulatory framework to ensure that investments in the sector flourish but at the same the public, especially minors and those not keen to participate, are protected from unscrupulous dealers.  The Ministry of Finance will present necessary amendments to Parliament.    

Taxation of the Petroleum value chain

Review the taxation of the value chain for petroleum and minerals sector

145.     Madam Speaker, during the coming financial year the value chain for petroleum and minerals sector will be reviewed with the aim of ensuring that Government gets maximum benefit from the sector.

New Tax laws and other reforms

146.     Madam Speaker, as part of its efforts to promote investments, welfare of Ugandans, equity and enhance  compliance and tax administration, Government has proposed new excise, stamps duty, Lotteries, Gaming and Pool Betting laws and a Tax Procedures Code.

147.     In Financial Year 2013/14, Government will comprehensively review the exemptions in the VAT Act and the Income Tax Act with the aim of eliminating them to increase revenue and improve administration.

148.     Madam Speaker, Government will also undertake a study on VAT being collected currently in comparison to its potential (VAT Gap). In addition a similar study will be undertaken on income tax which will form a basis of improving the law to enhance performance and offer better services to taxpayers.

Tax Administration

149.     Uganda Revenue Authority has built a strong foundation for obtaining significant improvements in taxpayer compliance and tax revenue performance. Government has invested in Tax administration through building human capacity, modernization of systems and equipment.  As a result, tax revenue performance has increased year on year by about 17%.

150.     In the coming financial year and over the next three years, Uganda Revenue Authority (URA) will build on this progress to obtain significant increase in tax compliance.  The Authority will;

i.     Intensify its efforts to enforce compliance on the different types of taxpayers i.e. large medium and small.

ii.   Continue expansion of the audit coverage to include the bulk of the largest traders and conduct joint audits in the domestic tax and customs departments to detect and sanction non-compliance and fraud in a number of taxes.

iii.  Enforce the use of the Tax Identification Number for all traders who receive trading and other licenses and permits from KCCA and Local Governments.

iv.  Clean up the VAT register to ensure that only those capable of filing monthly and paying remain on the register.

151.     In addition to the revenue targets that the Ministry sets for URA, the Ministry will put in place a wider suite of performance indicators in tax and customs to help URA Management monitor the results of the modernization program on a regular basis.

152.     URA needs to have direct access to considerable information to determine a taxpayer’s liability.  In this regard, Government is to propose an amendment to the Financial Institutions Act to allow URA to access a taxpayer’s financial records, as an exception to the confidentiality provisions, where a bona fide tax audit or investigation has been initiated.

Decisions made at EAC Pre-Budget Consultations by Ministers of Finance

153.     The Sectoral Council of Finance and Economic Affairs considered Pre-Budget issues. One of the key issues discussed was the granting of 0% import duty on Uganda’s raw materials and industrial inputs which under the EAC Customs Union Protocol was to last for a period of five years until 2009.  The East African Community has d terminated this facility. However, we did secure reduced rates for most of our industrial inputs. 

154.     Details of the positions agreed to by the Council will be contained in a gazette to be issued by the EAC Secretariat.

 

                                             IX.      Report of tax expenditure for Financial Year 2012/13

155.     Madam Speaker, Article 152 (2) of the Constitution requires me to periodically report to Parliament on the exercise of powers conferred upon me by any law to waive or vary a tax imposed by that law. This is to report that this fiscal year, I did not exercise powers conferred by the Income Tax Act and Value Added Tax Act to waive any tax. However, I exempted Pride Microfinance Limited, a wholly owned Government financial institution, from stamp duty of Shs.48m/-on transfer of property.

156.     Madam Speaker, Government has also paid Shillings Seven billion, Nine Hundred Fifty One Million, One Hundred Seventy Eight Thousand, One Hundred Ninety Two Shillings only (Shs 7,951,178,192/=)  in respect of Hotels, Hospitals and Tertiary Institutions, and Non-Government Organizations  with tax exemption clauses in their agreement.

                                                                                       X.      Schedule of indebtedness

157.     Madam Speaker, in accordance with the provision of Article 159 (4), Section 13 (1) and (2) of the Budget Act 2001, I hereby lay before the House a report on Government’s total external indebtedness as at 31st March, 2013; and all the loans contracted the grants that Government received during financial year 2012/13. I wish to call upon Colleagues to spare some time read and discuss the report and provide insights, comments and guidance.

158.     With respect to Section 13 (3) of the same Act, I wish to report that Government did not extend any guarantee to any Agency, Company or Statutory Corporation during financial year 2012/13.

159.     On the utilisation of loans and grants, I have highlighted key issues in each respective case. Details of the utilisation and the performance of each loan and grant, including the extent of the achievement of the objectives and targets, will be provided in the Ministerial Policy Statements for agencies that received loans and grants, as well as in our poverty monitoring and assessment reports.

160.      Madam Speaker, Members of this House are aware that Government has met a number of challenges in the utilisation of loans and grants which have been mobilized. The main challenge is low absorption arising from lack of readiness of sectors to utilise resources. To address the challenges, I propose the following measures:-

i.     Streamline budgeting for counterpart funding in Sectors/Ministries to ensure that projects are fully funded.

ii.   Prepare projects that have been fully analysed and had cost benefit assessment carried out.

iii.  prioritize project selection by Accounting officers to ensure that sufficient funds are availed to match loan disbursement.

iv.  The Accounting Officer are required to provide detailed information on implementation of all programmes under their purview before Parliament approves a new funding to a given sector.

v.    Expedite a loan approval process by Parliament to ensure the conditions existing at the project appraisal have not been overtaken by events and costs have escalated.

vi.  With regard to large infrastructure projects, undertake studies and designs in advance of the loan approval to enable project execution to commence immediately; and if necessary Government finances the studies and designs, for which  agencies Ministries must budget appropriately for.

vii. There is need for accounting officers and political Heads of Government Departments to ensure the project develop implementation and procurement plans well in advance of loan approval. In this regard, project Management unit should be staffed with persons who are proactive in decision making and consultation.

viii.There should also be a continuous capacity building of our nationals in project and contract management, a capacity that is both visible and effective.

                                                                                                         XI.      Conclusion

161.     Madam Speaker, this year’s budget is historical as over 80% of the resources are internally generated. I wish to thank tax payers of Uganda private sector for the tremendous support for their contribution.  This will enable more resources to be allocated to infrastructure investment which will reduce the cost of doing business to the Private Sector. I wish to pledge that these resources will be utilized efficiently on investment, rather than consumption.

162.     Before I conclude my speech, Madam Speaker, I would like to thank very sincerely H.E. The President for his guidance and wise advice in the preparation of this Budget. I also wish to thank the Rt. Hon. Prime Minister, my Colleague Ministers, Development Partners, Private Sector and the Civil Society for your invaluable all for their views and suggestions. I also wish to thank my Ministry’s long serving Permanent Secretary and Secretary to Treasury, Mr. Chris Kassami, who has served this country for 43 years; and all the officers of my Ministry for their dedication during the entire Budget process.

163.     The future our economic growth will largely dependent on a favorable development climate for private-sector investment in the economy and attraction of foreign direct investment and reduced reliance on foreign aid. We shall continue to align all sector budgets to the National Development Plan by investing heavily in key productive and infrastructure sectors. Madam Speaker, the expenditure priorities, revenue measures and policies announced in this Budget demonstrate the Government’s commitment and determination to rise to the challenges ahead and pursuit of the long term development agenda as envisioned in Vision 2040. This year has been the year of transparency. Next year will be the year of transparency and accountability.

164.     Madam Speaker, I cannot move without paying tribute to our sportsmen and women, and especially the gallant national team the Cranes, in their tireless quest to take Uganda to the 2014 World Cup. We all need to inspire with the valour of Stephen Kiprotich when he won Uganda’s first Gold in 40 Years, by supporting them as them seek to further Uganda’s glory at their next match on Saturday! Uganda Cranes We go, We go, No matter what, We go!

165.     Madam Speaker, I thank you for your attention and I commend the Bill to the House.

I beg to move.

World Bank fund accelerated Innovations in Uganda

By Esther Nakkazi

For over five years, in science terms, under the $33.3 million funded World Bank and the government Millennium Science Initiative (MSI) project, Uganda’s science, innovation and technology capacity has been accelerated.

Its expenditure on science, technology and innovation (STI) as a percentage of GDP is up from 3 to 5 percent from 2005 to 2012, according to the Uganda National Council for Science and Technology (UNCST).

Likewise over the same period, its Gross Domestic Expenditure on Research and Development (GERD) has risen from 0.29 to 0.65 percent of GDP, which is a significant rise compared to its neighbors, though it is still below the African Union recommended 1 percent of GDP.

One of the projects responsible for this is the MSI. In 2006, Uganda, won $30 million in low interest loans from the World Bank MSI, a project, started in 1998, to build capacity in science and technology in the developing world. The Uganda government counter funded it with $3.35 million and it got implemented by UNCST.

Now, the project has closed shop in Uganda, this year, and the government has advised against getting additional funds from the World Bank, which is willing to support it further.

But UNCST officials who have thrice presented budgets to the ministry of Finance with no positive response are skeptical about getting any funding. And want the government to allow for more funds from the World Bank which has indicated availability of US$ 15 million, from July 2013 till June 2016.

Ministry of Finance officials say science and technology is such a priority to the country, the government does not need to get money from donors to fund it. They plan to consider the UNCST budget in the upcoming 2013/14 budget. 

“We asked for a bridging fund, which the World Bank was willing to give us but government rejected it. We have had a series of meetings but it seems this is not a priority. It is very disappointing but we hope that this time they get their priorities right,” said Dr. Peter Ndemere executive secretary of UNCST.

According to Ndemere and other scientists, even when the funds do not come from the World Bank, Uganda will adopt the MSI project model, which has been a success and has laid many products on the table that have accelerated Uganda’s STI growth and built its science capacity.

“Based on the success of the MSI, continuation of the project approach is a logical policy option. It will mean its extension no matter what,” said Ismael Barugahara the Assistant Executive Secretary, UNCST at the MSI project results dissemination conference recently.

Prior to the MSI programme, a few science degree programs existed, enrolment in basic sciences was low, laboratories were scarce, under-equipped and obsolete, and there was a general lack of interest and focus on science and technology.

For instance fewer than 500 professors in the entire country had Ph.D.’s, and fewer than 10 new Ph.D.’s were awarded annually in sciences and engineering. Most of the research funding came from donors making it unsustainable and difficult to ensure national research for a development-driven agenda. 

Now, after five years, the MSI project has supported over 250 scientists working on 39 research projects and involving over 950 undergraduates, 57 Masters and 31 PhD students trained in science and engineering.

“Ugandan universities and research institutes have produced more and better qualified science and engineering graduates, and have done higher quality and more relevant research for firms to utilize it,” said Dr. Ndemere.

With MSI funding, the Uganda Industrial Research Institute (UIRI) opened up a technology development centre with equipment used to reverse engineer key technologies   like the bamboo toothpick processing technology, fabrication of multi-nutrient animal feed production and development of a dry coffee processing line among others.

“We have failed to secure US$2 million supplementary funding, in spite of the World Banks willingness to avail us support. The government has expressed commitment but no funding has been forthcoming to date,” complained Dr. Dick M. Kamugasha the Director, Technology Development Center, UIRI.

Since one of the issues before MSI was lack of public understanding and appreciation of science and technology as well as its role in national development,  UNCST started the  ‘National Science Week’ an outreach science awareness  programme for students and teachers.

A malaria vaccine was also successfully tested in mice and baboons with MSI funding. “The fact that we have tested it in baboons has made us get closer to humans and it will inform future malaria vaccine studies,” said Dr. Thomas Egwang the director General of Med Biotech Laboratories.

“We know what we can do but we need more funds to do this again and again before we get to test it in humans,” said Egwang.

 “The project gave us excellent experience with merit based competitive funding for science and research. And many projects have led to results which have great potential for the Ugandan society and economy,’ said Dr. Theresa Sengooba, the chair MSI.

“But sustainability is a big challenge because many of these projects need more research and technology transfer pathways before end users and the country at large can benefit from this investment,” said Sengooba.

Japan Launches Bold Effort to Fight Neglected Diseases

PRESS RELEASE-TOKYO-May 31, 2013

The Global Health Innovative Technology Fund (GHIT Fund), a new

public-private partnership that’s bringing Japanese research and 

development (R&D) to the global fight against infectious disease, will 

announce at the 5th Tokyo International Conference on African 

Development (TICAD V) a series of historic agreements to screen compound

libraries at Japanese pharmaceutical companies and research institutes for new

treatments for malaria, tuberculosis, and other afflictions that prey mainly on 

the poorest of the poor.

“These thirteen agreements are just the first of what we expect will be many global

health partnerships facilitated and funded by the GHIT Fund that tap into Japan’s

enormous capacity for innovation and technology,” said BT Slingsby, MD, PhD, MPH,

who serves as CEO and executive director of the GHIT Fund.

The GHIT Fund is a public-private partnership between the government of Japan, 

a consortium of Japanese pharmaceutical companies (Astellas Pharma Inc.;

Daiichi Sankyo Co., Ltd.; Eisai Co., Ltd.; Shionogi & Co., Ltd.; and

Takeda Pharmaceutical Co., Ltd.) and the Bill & Melinda Gates Foundation.

Launched with a potential five-year commitment of over US$100 million, the

fund is unique in that it involves a consortium of pharmaceutical companies 

who initiated a partnership with government and civil society to support research

and development for neglected diseases.

It also is the first time the Japanese government, a longtime top-funder of

international aid, has made a significant commitment to developing new 

technologies that target diseases that are mainly a burden on poor countries.

The Fund’s inaugural efforts are financing the work of three non-profit product

development partnerships (PDPs) to search for new drug candidates in compound

libraries maintained by Japanese pharmaceutical companies and research institutes. 

The PDPs involved in the work are the Global Alliance for TB Drug Development 

(TB Alliance), the Medicines for Malaria Venture (MMV), and the Drugs for 

Neglected Diseases initiative (DNDi).

TB Alliance is partnering with Eisai Co., Ltd., Daiichi Sankyo Co., Ltd., 

Shionogi & Co., Ltd. and Takeda Pharmaceutical Co., Ltd in a search for compounds

that show potential to fight deadly, drug-resistant TB strains that are undermining

efforts to control the global TB epidemic.

“We applaud the GHIT collaboration for providing a meaningful mechanism to 

facilitate Japanese companies’ involvement in TB drug research,” said Mel

Spigelman, MD, president and CEO of TB Alliance. “These agreements enable 

access to the compound libraries of Japan’s top pharma companies, which 

could help identify tomorrow’s new and improved TB cures.”

MMV is partnering with Eisai Co., Ltd., Daiichi Sankyo Co., Ltd., Takeda 

Pharmaceutical Co., Ltd., along with the Institute of Microbial Chemistry (BIKAKEN) 

and Kitasato Institute, to seek out new candidates for treating malaria. There is an 

urgent need for new malaria treatments as resistance to the most effective drugs

now available, artemisinin combination therapies or ACTs, has emerged in Southeast Asia

and could spread elsewhere.

“MMV congratulates the Japanese government and Japanese pharmaceutical 

companies for launching this innovative, cross-sectoral initiative to address 

diseases of the developing world, such as malaria,” said Dr. David Reddy, PhD,

CEO of MMV.

“Every minute of every day a child in Africa dies from malaria.

Working with the GHIT Fund and Japanese organizations will provide MMV access

 to novel Japanese compounds, expertise and support, which we hope will

open the door to new, breakthrough malaria medicines to help stop this unnecessary loss of life.”

DNDi is partnering with Eisai, Takeda Pharmaceutical Co, the Institute of

Microbial Chemistry (BIKAKEN) and Kitasato Institute as part of its effort to

find new treatments for three neglected tropical diseases (NTDs) that threaten

hundreds of millions of people worldwide: leishmaniasis, Chagas disease and 

sleeping sickness (Human African trypanosomiasis or HAT).

Leishmaniasis, a parasite-borne disease transmitted by sandflies, has a “visceral” 

form that can kill and a cutaneous form that causes painful, scarring skin ulcers. 

Chagas disease,a parasite-borne disease transmitted by insects known as “kissing bugs,” 

kills more people in Latin America than any other parasitic disease. 

Sleeping sickness is a parasitic disease transmitted by the bite of the tsetse fly. 

The disease affects mostly poor populations living in remote rural areas of Africa. 

Untreated, it is usually fatal.

“Japanese companies and research institutes are doing more than just giving us

access to their compound libraries to identify new promising drugs to treat patients

for neglected diseases. The GHIT Fund partnership provides an opportunity for DNDi

to expand collaborations with leading Japanese pharmaceutical companies, research 

institutions and academia,” said Bernard Pécoul, MD, MPH, executive director, Drugs 

for Neglected Disease initiative. “GHIT is a catalyst for innovation and partnership 

creation for other governments to follow.”

The aforementioned 13 partnerships to probe the various drug compound

 libraries emerged from a call for proposals issued by the GHIT Fund in April

 that was open to all Japanese companies and research institutions and to

 international PDPs developing new tools to fight infectious disease. 

Additional agreements are expected from this call for proposals. The GHIT Fund 

plans to seek another round of proposals that could prompt more Japanese companies

 and research organizations to offer their compound libraries for screening.

In addition, the GHIT Fund also is seeking grant proposals for partnerships 

focused on developing new medicines, vaccines or diagnostics that seek to 

reduce the burden of AIDS, tuberculosis, malaria, and a constellation of other

debilitating afflictions that disproportionately affect poor people in developing 

countries. A key requirement is partnership: each proposal must involve both a

Japanese partner and an international collaborator already working in global health R&D.

As explained by Kiyoshi Kurokawa, MD, chair of the GHIT Fund board, “The key is for our Fund to provide speed and impact through the facilitation and funding of collaborations.”

Africa Innovators will Perish or Patent

By Esther Nakkazi

Twenty year old Christine Nalukwago, a student, is now a celebrated Ugandan innovator, after making deworming pills from local materials and basic technology.

She made the dewormers from a solution of dried pawpaw seeds, sugar, and banana or cassava flour and put it under the sun to dry for a week. Nalukwago acquired the knowledge after a visit to her grandmother, but the fact that dry pawpaw seeds rid children of parasitic worms, was already known to communities in Uganda.

She has since won prizes at the first East Africa regional Science, Technology, Engineering and Mathematics competition organised by the Forum for African Women Educationists (FAWE), an NGO that empowers girls and women. She was also recently hosted at the BBC Africa science week held at Makerere University in Kampala.

Ideally, Nalukwago, and her teachers would protect this innovation by visiting the Uganda Registration Services Bureau, (URSB) which registers Intellectual Property Rights (IPR) in Uganda. These days it is publish or patent. But they have not.

Intellectual Property (IP) refers to creations of the mind and IPRs protect the interest of creators by giving them property rights over their creations which could include musical, drama and literary works; technical and, scientific innovations; and distinctive signs and marks used in business or Trade Marks.

According to Paul Asiimwe a lawyer specialising in IP law with the Kampala-based Sipi Law Associates, if the dewormers qualified, they would have to be registered under the IP cycle, which involves creation, protection, commercialization and enforcement.

But the innovation would to be of practical use to society, be novel-unknown by an existing body of knowledge or prior art- plus it must have an inventive step, deduced by someone of average knowledge in that technical field and also the subject matter must be ‘patentable’ in law.

While the process of patenting is laborious the world over, its worse here, and could be one of the reasons Uganda has no more than 30 registered patents, according to URSB, although the office has existed as far back as 1948 when Nivea body lotion was registered.

It is the same process regionally, for an inventor to get a patent. They should file a patent application with a title, background and a detailed description of the invention, provide an abstract for it, indicate its technical field, industrial applicability and claims or the scope of desired protection.

The application must be written in clear language that a person of average understanding of the field could use or reproduce the invention; drawings, plans or diagrams should also accompany the description to further clarify the invention.

At the Uganda Registration Services Bureau office, they advise that a professional is engaged by the innovator to write the application, which could be as big as 500 pages and more.
In Uganda, patents last for 15 years, with an option for the inventor to request for a further 5 year extension. Patent protection ends when it expires and it becomes part of the public domain. So the owner at this time has no exclusive rights to the invention.

The whole patent process costs up to $270 until it expires after 15 years. The application fees are Ushs.180, 000 ($70) and Shs.12, 000 ($4.6) for correction of the application. After the patent is granted you pay a one-time fee of shs.300, 000 ($II5) and annual maintenance fees of shs.48, 000 ($18.5) on first anniversary date plus an additional shs.12, 000 ($4.6) for every year the patent is in force.

Although, it is believed that innovations are on the rise in Uganda especially in institutions like Makerere University, the above process and its benefits is known to a few innovators because of low IPR awareness and enforcement.

“People do not know the value of patents or trademarks until they stumble upon it. They get to discover it by accident,” says Asiimwe. On the other hand, education and training in the area of IP is low at higher learning, which has resulted in lack of IP experts in Uganda.
“Our office does not have the capacity to do any examinations. We lack appropriately trained Patent agents and technology licensing practitioners,” said Juliet Nassuna, the director Intellectual Property at URSB but said they are in the process of embarking on training some. Otherwise they rely on Kenyan examiners.

Researchers, academic institutions and SMEs are neither strategizing enough to generate and manage IP rights, so largely, IP issues in Uganda remain driven by foreign firms or foreign interests, says Nanfuka. Now, these crippled with poor science infrastructure, no venture capitalists, a long patent application process, and a weak innovation system just produces few innovations, low technology transfer and adaptation in Uganda.

Dr. Thomas Egwang a molecular biologist and director general of Med Biotech laboratories has just completed work on a novel malaria DNA vaccine construct, which induced cross reactive antibodies in baboons with 100 percent sero-conversion. But he will not patent it.
“Applying for a patent is like writing a business plan. If I was half my age I would but now I do not have that vigour,” said the 60-year old Egwang.

He however, supports the culture of patenting but will opt for publishing other than patent with the hope that in the science world, there is ‘a level playing field and the market is wide’.
“I am planning to publish in good journals to and put my findings in the public domain so that they do not steal it but I am not going into patenting,” said Egwang who had just presented it at a conference in Kampala.

But Nassuna warns that that is one of the dangers, disclosure before filing. “Ugandans should be careful about the way they disclose information about innovations. Many people throw themselves out of the market by disclosure,” she said.

Uganda Registration Services Bureau office is now encouraging Ugandans to embrace the geographical indications law that give mileage to products with unique geographical attributes such as Nile perch, silky cotton, Kafu cassava.

They also advised Nalukwago and her school, Kitante High School, to work with a scientist and use other areas of IP especially Trade Mark in this case, because it is affected by prior art, due to what existed before the dewomers invention.

“But they should also have the resources to scale it up, so that it does not become a white elephant,” advised Nassuna.

Ends-

Women Participants in Clinical Trials for HIV Vaccines still low

By Esther Nakkazi

On May 18th, each year, the world celebrates World HIV vaccine day. Many clinical trials of HIV/AIDS are happening in the East African region, and year after year thousands of volunteers enroll to participate in the search for an HIV vaccine.

Fulani women: flickr

The volunteers in these trials are great people who should be admired and applauded plus the scientists and funders except, women, who continue to frustrate these efforts by showing up in low numbers; yet we are more vulnerable and bear the bigger burden of the HIV epidemic.

Scientists conclude that low female participation in vaccine clinical trials of HIV/AIDS could produce a vaccine that is not well respected or conclusive on its efficacy among women or one that only elicits a good immune response in men.


In Uganda, and a few other African countries, the situation is frustrating and puzzling. Women seek health care services more than men, yet men are more willing to participate in trials? Why?

Take for instance, the Makerere University Walter Reed Project (MUWRP), early capture cohort study, the RV217, which is studying most at risk populations. The study is supposed to help in the diagnosis of HIV before antibodies are formed. Participants are therefore captured at 3 days or at most one month after infection.

It set out to enroll only female commercial sex workers but the numbers were too low so it has been amended to now include male commercial sex workers and Men who have sex with Men (MSM), another most at risk population. But even with the anti-gay environment in Uganda and the strict anti-homosexuality Bill coming up the male response and enrollment in this study has been very good.

The reasons for low women participation are varied; the social structures- women need consent from their husbands or parents; then the requirements of the protocols are also stringent, no breast feeding or pregnancy so they have to use contraceptives throughout, yet most of them are usually in the reproductive age bracket and are sexually active etc.

Most women also have to attend to family issues and have limited free time yet typically it would require at least 20 visits to the vaccine clinic in an 18 month vaccine clinical trial for HIV/AIDS.

At MUWRP, where I am a member of the Community Advisory Board (CAB), scientists say they have almost run out of ideas on how to get women participants. And one thing for sure is that they go out of their way to target and recruit women. Strategies used include mass media, targeting only female institutions of higher learning, female groups etc.

After trying all the tricks under their sleeves, they are now going to do a study on why women do not participate. They have lessons to learn from Tanzania and South Africa where female enrollment is higher than for male.

Currently, another disappointment is the low numbers of women enrolled so far, only 5 out of 42, for the RV262 a phase 1, safety, human clinical trial for an HIV/AIDS vaccine that will use DNA.

The ideal number of females to enroll in a vaccine trial would be a third of the overall total. But in Uganda, typically, when research organisations advertise for volunteer participants in clinical trials for HIV/AIDS, many people turn up in the hope of finding a job. But still even here, the ratio of women to men is 1:6.

Research is done among communities to solve problems but it also benefits a country in terms of technology transfer, jobs, career development for local scientists and in the HIV vaccines case, to wipe out HIV in the world.

If women do not participate in the search for an HIV/AIDS vaccine our problems with HIV will never get solved yet we are more vulnerable!

Esther Nakkazi is a freelance science journalist and a Community Advisory Board member representing the Health Journalists Network in Uganda (HEJNU www.hejnu.com) with the Makerere University Walter Reed Project (MUWRP).

Tanzania: An opportunity for regional cross border fibre

By Esther Nakkazi

Tanzania could be one answer to eastern Africa's cross border broadband connectivity problems, with fibre links laid up to strategic border points of the nine countries neighboring it.

But all nine governments have not responded to interconnect at the borders with Tanzania fibre, a problem that is still keeping Internet prices high and may slow development for the region.

"If eastern Africa wants to take Internet traffic down south through Tanzania they can do so," said Dr. Raynold Mfungahema, director of consumer and industry affairs- Tanzania Communications Regulatory Authority (TCRA).

Tanzania fibre links are already at borders points of Sirali, Namanga and Horohoro to serve Kenya, Mutukula to Uganda, Rusumo to Rwanda as well as Manyovu and Kabanga to Burundi.

It is also connected to Malawi through Kasumulo and Tunduma to Zambia plus it has three submarine cables-EASSy, SEACOM and EACC to Seychelles.

"We have pulled fibre to all these border points but all the governments have not connected to our links, which is a challenge. It is only the private sector doing cross border interconnectivity and they are few," said Mfungahema at the Broadband and Satellite communication held in Kampala recently.

The few private sector companies that have connected across border lines particularly, MTN interconnecting Rwanda to Burundi and Uganda to Kenya and Rwanda are monopolies keeping the costs real high.

In Uganda, the private sector, MTN and Uganda Telecom have between them fibre laid from border to border, to Malaba linking up with Telkom Kenya to Nairobi and Mombasa; and to Katuna border to link to Rwanda.

The private sector, interconnects the region under a joint regional effort, the East African Backhaul System (EABS) which is meant to link all the five East African Community Countries and involves about 30 operators in Eastern and Southern Africa.

However, connecting across borders also has its challenges; bureaucracy for rights of way, immigration, different regulation regimes and security concerns as data is moving between governments.

"We need more operators to build fibre across borders to stop monopolies that exist in interconnection between borders," said Michuki Mwangi of Internet Society. The cost of cross border connections for the east African region remains exorbitant; for instance, it is cheaper to buy broadband from London to Nairobi than from to Nairobi to Kampala.

Most government officials and regulators attending the conference on Broadband and satellite communication organized by the Uganda Communication Commission (UCC), International Telecommunications Organisations (ITSO) and the East African Communications Organisation (EACO) said they hope to interconnect across borders through their national data transmission projects.

" We shall connect to Tanzania through Mutukula in phase III of the National data transmission project in the next financial year," said Mr. James Saaka, the director National Internet Transmission (NITA-U).

The Uganda government has completed phase I and II of its national data transmission project and according to Ssaka they have handed over infrastructure of 2,000 kms to a private company, now managing it.

Kenya has ten times as much as Uganda's laid broadband with 20,000 kms owned by both the government and the private sector. Meanwhile, Tanzania has 10,000 kms of fibre laid under the government national data project.

In order to have cheap Internet, the region could unite and also create public-private partnerships to interconnect at the borders. "It is important that we collect our traffic as a region and buy traffic cheaply, plus keep the local traffic local," advised Dr. Mfungahema.

The NEPAD e-Africa programme and African Union have a joint project to identify cross border broadband linkages. Dr. Edmund Katiti of NEPAD e-Africa programme assured all broadband providers who have interest in connecting across borders that they can get soft loans from NEPAD or the African Union.

"There should be complementation as soon as possible between government and the private sector,” Dr. Ruhakana Rugunda, the Minister of ICT in Uganda. "If we handle things together and move as a region, we shall move faster."