State of the Nation address

Museveni said when completed next year, the projected would bite off a sizable chunk of the US$43.6billion currently spent globally on wheat. Many are waiting for that day. Museveni also spoke of realistic items. Such as agricultural products for food-security and for commerce like bananas, maize, beans, irish-potatoes, cassava, coffee, tea, cotton, cocoa, milk, beef, fish, poultry, eggs, and flowers.

He said apart from feeding Ugandans, they earned the country US$2,005 million (which is 49% of total merchandise exports). He said even during the COVID-19 crisis, agricultural products like coffee, fish, tea, and maize continued earning the country millions of dollars; in March and April US$45.87million and US$36.928million from coffee, US$5.15million US$6.145million from tea; and US$14.98million and US$6.831million from fish exports respectively. Maize exports brought US$10.23million in March and US$6.256million in April this year.

He touted the network of tarmac roads totaling 5,111kms, a strong army, the Local Council system and 5,200 factories and 380,896 companies engaged in Information Communication Technology, telecoms, broadcasting, postal and courier and audio visual.

He spoke of successful import substitution and fledgling export of cement, steel bars, soap, mattresses, mabaati, sugar, cooking oil, rubber tyres, textiles, beverages, beers, etc. He said the country earned US$2.09billion last year.

“This sector is ready for even a qualitative change by starting manufacturing buses, mini-buses, pick-ups, small cars, bicycles, etc,” he said.

He said he is sure, in spite of “the obstructions by the neo-colonial actors and foreign backers,” Uganda is able to stand up today and weather the Coronavirus storm.

He said: “If we take industry, in just the last few months of this crisis of the virus, by March, 2020, we had only two factories, known as Saraya East Africa Limited and the Luwero Industries making sanitizers. We now have 107 factories. By March, 2020, there was not even one factory making masks in Uganda and we were told that there was a global shortage, etc.”

He said the coronavirus pandemic, by temporarily blocking the channels of dependency and collapsing the economy of leisure and pleasure, has reinforced the need for import substitution given that Uganda’s import bill is US$7billion per year.

Some of the imports include medicines, textiles, leather products, industrial sugar for use by coca-cola, industrial starch for use by the pharmaceutical industries, paper, packaging materials, glass products, automobiles, bicycles, etc., etc. Many of these can and will be made here.

The economic stimulus

The President capped his economy based blue-skies vision of tomorrow with an 11-point stimulus package for private firms affected by COVID-19 centred on providing liquidity. That its centerpiece was Capitalisation of Uganda Development Corporation (UDC) with Shs.100 billion drew skepticism from people who said it is an old song.

But the president also spoke of Shs1 trillion injected in UDB to give low interest loans to manufacturing and commercial agriculture ventures.

Then he reeled off his usual promises; COVID-19 support money for boda-boda riders, salon operators, bars and night-club operators, artistes, etc. He said these would get low interest loans from the government. Only the most optimistic took this seriously.

Other economic measures that will be taken to provide liquidity to private firms that have been affected by the COVID-19 lockdown include: 

• Allow corporations including small and medium sized enterprises (SMEs) to delay payment of corporation tax or presumptive tax for taxes due between April and June 2020 and for tourism, manufacturing, horticulture and floriculture to defer until September 2020; 
• Defer payment of Pay-As-You Earn (PAYE) tax by those sectors which are most affected until September 2020; 
• Waiver of interest on tax arrears; 
• Support to water and electricity utilities in order to ensure continued supply of these essential services to consumers during the period April to June 2020; 
• Expedite payment of outstanding VAT refunds  Payment of domestic arrears for goods and services supplied to Government by the private sector; 
• For those unable to pay their loans, government through the Bank of Uganda has already put in the gazette the measures to support businesses; including allowing extension of repayment periods, postponement of loan repayment for a limited period, relaxing the conditions for non-performing loans, reduction of reserve funds commercial banks are required to keep with Bank of Uganda and creating a special liquidity facility to rescue businesses that are not able to meet operational costs due to low demand or reduced production due to COVID-19; 
• Capitalisation of Uganda Development Corporation (UDC) with Shs100 billion to enable government to invest in strategic areas; 
• Boosting funding to Uganda Industrial Research Institute (UIRI) in FY 2020/21 to continue with innovation research and incubation of business start-ups. 
• Securing funding for the development of Kampala Industrial Business Park at Namanve and for power transmission and substations for Mbale, Kapeeka, Bweyogerere, Kasese, Soroti, Luzira, Jinja and Mbarara industrial parks; 
• Provision of additional Shs300 billion immediately to boost agricultural production and productivity for seedlings, fertilizers, irrigation, storage facilities and value addition. The target crops are coffee, cotton, tea, palm oil and other oil seeds, cassava, maize, cocoa and dairy, beef, and fish production.

In a show of how disruptive COVID-19 has been, for the first time in Uganda’s history, President Museveni delivered a virtual State of Nation Address via Zoom. Previously, under normal circumstances, such addresses are given delivered in the comfort of conference halls of the Kampala Serena Hotel with MPs and invited guests chanting support slogans.

The President’s speech was also shorter, with few of the quips from previous state of the nation addresses, where he often lectured at length on peace, security, wealth creation, job creation, infrastructure and human resource development, and market access and regional issues.

In this year’s address he appeared to have a succinct message: COVID-19 pandemic will not negatively impact the “real economy”. It might cause the “vulnerable economy” of leisure and entertainment to gasp for breath but it would bounce back or people could live without it.

His reasoning is that Uganda being largely an agricultural economy, the farmers of coffee, tea and fish should double their efforts to ensure that the country earns more foreign exchange.

Also, it was a departure from his last three state of the nation addresses where peace and security and infrastructural developments hogged his time. Many will recall the years when insecurity was the issue after the assassinations of AIGP Andrew Kaweesi, Muslim clerics, Major Kiggundu, Joan Kagezi, Police officer Mohamed Kirumira, among others.

Now it is COVID-19 that has everyone worried. The numbers are heading north dramatically. People can no longer move freely and businesses are limping. Many wish the President had spoken more on this state of the nation. But there will possibly be time.

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