Highlights of the Keynote Speech by HE President Museveni of Uganda
First, Uganda enjoys solid political and economic stability. The days when people could not step outside their homes in the evenings are long gone. There is general and wide-spread confidence in the prevailing atmosphere of peace and security in most of the country. Moreover, in the past ten years, GDP growth has averaged 6.5% per annum. Inflation has tumbled from triple digits in the mid-1980s to an average of 6.6% over the past five to six years. This stability in the policy line is authenticated by Uganda's relations with two major international institutions i.e. the World Bank and the IMF and also with the donor community in general.
Second, government's unswerving commitment to private enterprise. This has been manifested most clearly by the government's early position on the inefficiency and poor management of parastatals and state-owned enterprises. The privatisation and reform of parastatals and utilities is a process which we began in 1993.
Third, is the regional market. One of the problems of African economies is fragmented markets. A country like Uganda has a population of only 20 million people. In 1956, when the British were still in our country, the population was only about 4 million. It has now grown by five times to 20 million. So if you take that as the economy alone, the market looks small. However, Africa, is a land of 750 million people today: the population has risen from 130 million people at the beginning of this century -- it is going to be 1.4 billion by the year 2025. We have a population of something like 200 million in East Africa (that is Uganda, Kenya, Tanzania, Rwanda, Burundi, Congo and Ethiopia). Therefore, in order to compensate for the small country markets, we have created regional economic organisations: the Common Market for Eastern and Southern Africa (COMESA) and SADC, the one of Southern Africa. But some of the countries of Southern Africa, such as Zambia, Malawi, Tanzania and Congo are also members of COMESA. So, when you invest in Uganda, you will not only target the Ugandan market, but also the regional market. Now, this is very important in a number of areas. When the British were in our country, they were aware, for instance, that we had petroleum in the soil. But at that time, they rightly decided not to pursue the petroleum of Uganda, because Uganda is 1,000 miles from the sea, and it is a land of mountains, difficult to traverse. Therefore, the British rightly reasoned that they should concentrate on petroleum which is near the sea, like in Kuwait, Saudi Arabia, maybe Nigeria and leave alone this petroleum which is inside the continent of Africa. Some business people have been reasoning like this recently -- they think that the economic activity is only for export to overseas. But you can export within the continent also. The people who live in and around Uganda need this oil and I am glad that quite a number of companies have now come to get concessions for prospecting.
Fourth, is the liberalised economic environment. In the 1960s, the economic situation in Africa was very hostile. The main reason was ideological confusion. Our political elders in those days confused political patriotism with economic isolation. That is why they were nationalising foreign companies. They thought that foreign companies would expatriate resources out of our countries. Foreign companies would take out more money than they would bring in. This was essentially due to an incomplete study of the flows of money. How does money flow? If a company, like for instance BAT (British American Tobacco) is based in Uganda, Ugandans are getting a lot of benefits from that company even though we don't own the majority shares in it because we grow our own tobacco leaf and sell it to them; Ugandans get jobs in the factories; they buy our electricity; and they pay taxes. For instance, BAT pays US$46 million in tax revenue. Therefore, our political elders in the 1960s were mistaken in not knowing that through foreign companies, even if they are wholly owned by foreigners, still a lot of benefits come to us. By the mere fact that investment has taken place in our country. In fact I tried to look at some studies, which showed that 83% of the gross earnings of a foreign-owned private company will remain in our country in the form of wages, taxes, buying utilities and paying for raw materials. Only about 15% goes out in the form of dividends.
But you may ask me "what specific areas can we go into?" First, is agro-processing. Uganda lies astride the equator, so we get sunshine all year round. But in addition to this, the elevation of Uganda is high, Kampala is 1,000 metres above sea, level. Anything that grows anywhere in the world can grow in Uganda. You can go into dairy products, milk, beef, sugar, tea, coffee, tobacco, bananas, leather, any area you can think of. Anything agro-based, you can go into and you will be successful. Second, you can invest in forest products. Uganda is part of the tropical rain forest zone. Third is mining; fourth is power, as I have already said; and fifth is tourism. Then services: banks, hotels, etc.
With regard to Investing in Africa I would like to remind you that Africa is the second largest continent: it is 30 million square kilometres of land. You can fit the whole of the USA and whole of Canada, one and a half time inside Africa. It is a very large continent that is very rich in resources. Southern Africa is very rich in minerals as you know. Central Africa is rich in fresh water. North Africa is rich in oil. So the first big attraction of Africa is natural resources. The second is the market: as you hear, the market of Africa is 700 million people. It is not 100% linked right now, with roads, railway and so on. But that problem will be solved. And at least on paper, we signed in 1991, in Abuja, Nigeria, a treaty for setting up the Common Market for Africa by the year 2023. Our goal is to set up a common market in the whole of Africa. So you can come and take advantage of this market in Africa. Of course, I don't mind if you start in Uganda while awaiting the progressive creation of the African market.
In the case of Uganda and some other countries now, we struggled against (the colonial) power structure and got rid of it. Now, where we have succeeded in removing this power structure, development has started. That is why you hear that, for the last twelve years, our rate of growth has been 6.5% of GDP on the average. This does not mean that Uganda has just been discovered. It means that a new leadership is the one which has made this difference.
Therefore, answering your skepticism, of saying why have these resources of Africa not been exploited before? The answer is that they could not be exploited because of this incompetent colonial relationship which was still in place. Now, for the first time, the African intelligentsia with a massive population support, have taken their destiny in their own hands. This is the new situation in Africa. They may make mistakes, like all human beings do, but they will not be idiotic mistakes of those sergeants who were left behind by the colonial order.
Finally, to wind up, I would like to answer a prevalent story I have been hearing, that Africa will be marginalised by the world. This is not possible. The only people who can marginalise Africa are the Africans themselves. If the Africans are incompetent, if they are poorly led, they will cause Africa to be forgotten. But, without that, there is nobody who can forget Africa. Africa is a big continent, it is now heavily populated. Nothing will stop Africa from developing.
The Museveni Scholarship
The profits from the conference will be used as the basis for the establishment of a scholarship fund to be named the Museveni Scholarship. The objective of the fund is to assist the financing of African D.Phil. students to work at Oxford on issues relating to African economies.The CSAE has established a record of success in the completion of D.Phils. The topics covered include a wide range of applied analyses of important problems facing policy makers in Africa. Macroeconomic policy questions covered have included the role of monetary policy in the context of macroeconomic shocks in Zambia, problems of commodity stabilisation, fiscal and exchange rate policy in Eastern and Southern Africa. The microeconomic policy issues which have been the focus of attention include the role of networks and social capital in the growth of the Ghanaian manufacturing sector. Several theses have covered issues of investment in education and health in Kenya and Ethiopia. A recently completed thesis provides the first empirical evidence for Africa of the role of environmental resources in the welfare of rural households.
Museveni Scholars will be selected in annual competition. It is hoped that funds currently available will be supplemented by grants from institutions which work to support African capacity building, so that the Museveni Scholarships can be increased annually.
In the recent past an increasing number of theses have been completed by Africans. It is, however, very difficult for Africans to find the funds to enable them to carry out the long term study that a D.Phil. degree requires. The Scholarship fund will enable an increasing number of African students to work on D.Phils and to continue the strong tradition that has already been established for successful D.Phil. work.