Friday, November 10, 2006
The Monitor (Kampala)
Speech by President Museveni

Serena is world class - Museveni

Emmanuel Gyezaho transcribed President Museveni's speech at the opening of Kampala Serena Hotel yesterday. Excerpts:

Your Highness the Aga Khan, the Right Honorable Prime Minister, ladies and gentlemen. I used to go to the Serena in Nairobi during the 1970s. When we were fighting Idi Amin, I would come from Tanzania and take the hospitality of Serena, while I would be waiting for my contacts from Uganda.

I actually wouldn't stay there because it was a little bit expensive for my pocket at that time...[audience laughter] but I would hang around, and there was very good coffee being served in the lobby. That is where I saw this name Serena. But the story of Serena here today is the story of the recovery of Uganda.

To find that you can have such a world class hotel in Uganda is proof that Uganda is recovering. His Highness' speech, of which I need a copy, should be mandatory reading for our ministers. He has provided you with fees-free consultancy as to how we need to attract business; how to attract investments. It is all there.

Now during the colonial time, not much was done. What the colonialists did was to maintain order; of course there was no democracy at that time, build some little infrastructure here and there and allow a small private sector to develop. And that small private sector was developing well until, unfortunately, it was interfered with by the wrong policies initiated in 1970 by the then government, when as His Highness was pointing out in his speech, the shares of the private companies were taken over by the government. It was a wrong philosophy.

It was a philosophy based on distributing poverty rather than production. It was a strategic mistake. In fact, it accounted for the lagging behind of Africa, behind the Asian countries. By 1970, Uganda was not far behind Malaysia for instance, or Singapore. It was actually ahead in many respects. However, because of these mistakes, we fell behind.

Then Idi Amin comes in 1972 and goes a step further in making mistakes. I have just come from China and in the 1950s, 60s, 70s, you remember there were two Chinese leaders, one was Mao Tse-Tung, controlling the main land and the other was called Chiang Kai-shek, controlling the small island of Taiwan. Now, Mao Tse-Tung used to refer to Chiang Kai-shek as our teacher by negative example.

Now in the case of Uganda, our teachers by negative examples were the ones who were shaping policies in 1970 and then 1972. So in 1972, Amin went further in making mistakes. He actually uprooted physically, part of the entrepreneural class, which had become indigenous here. The policies of nationalisation, expropriation, uprooting of communities, were the cause of our stagnation and even decline.

Our political organisation, the National Resistance Movement, spent many years in the resistance, in the opposition. We were studying the mistakes that were being done by the people who were running the countries in Africa. By the time we took power, we had a clear view of the sort of strategic stimuli we needed to apply on the economy to make it grow sustainably.

One of the issues we resolved was putting in place a policy of private sector-led growth. That became our central point. And that is why Uganda has recovered now. Uganda has already realised what we set out to do in 1987, our programme of minimum economic recovery. That one we have achieved.

Inflation is under control. The currency is convertible. Both the current account and the capital account are liberalised. As a consequence, the transport sector has grown very fast, that is why the big problem in Kampala is traffic jam. Other service sectors have grown fast; the consumer goods are plenty in the shops.

However, our aim is not just to achieve minimum recovery but transition from third world to first world.

That is our aim. In fact we have sort of stagnated on this minimum recovery because by about ten years ago, we had achieved minimum recovery. So we should have taken off. However, there were a number of mistakes, caused mainly by interference from outside and to some extent, by the elements of the political class, which maintained our GDP growth rate at a modest 6.5 per cent per annum. We can achieve a 10, 11 per cent rate of growth as we did in 1994, like China or Vietnamhave been doing.

We have been discussing with the leadership in Uganda to identify those bottlenecks that have kept the rate of economic growth at the modest 6.5 per cent and we think we have identified them. One was the mistake in the power sector, lagging behind in the building of dams. This is because we listened to some confused ideas of some people.

That Uganda was in a new danger, a danger of having too much electricity. You cannot believe it. You don't know how many hours I spent arguing that we need to build more dams and do so quickly. It takes a long time to build a dam; about three years. You cannot build it in a short time.

How can you talk of too much electricity when the peasants are destroying 28 billion cubic meters of wood per annum in the form of firewood? That is equivalent to 1,000 Megawatts of electricity. How can you talk of too much electricity? His Highness is talking of patience, but I am actually an epitome of patience because among the qualities of patience is to talk with people who are wrong but whom you must continue to give respect. You can see somebody is totally confused but you must keep calling him, 'Yes sir,' or whatever he deserves.

However, within Uganda now, that confusion is finished. Yesterday when I was coming from Jinja, I was stopped by the people in Lugazi on the streets, those people are now experts in electricity.

They told me to shut down all the thermo power plants and concentrate all the money on hydro. That is what they told me. They now know the difference between our electricity and this electricity of diesel. 'Tudde ku gafe,' (let us return to ours), you can imagine the peasants, the people in Lugazi, can give lectures to engineers now, and to the ministry of finance, and to the World Bank.

So when I go to the World Bank next time, I will not bother, I will take people from Lugazi. They will be the ones to negotiate. They told me forget this and we go back to Tadoba and build more dams. I was stopped by the people to tell me that the thermal plants on which we have now been forced to resort to are a mistake; Those mistakes are being sorted out. We had calculated 36 months after May; it may be slightly more but we shall have addressed the power question.

The other issue that is important for Uganda to take off, to become a modern country, is the cost of transport to the sea, which we must together with Kenya and Tanzania. Of course, we must also look at the air freights, airport charges and all that. But as far as land transport, we must deal with the issue of transport to the sea, which means dealing with the railway.

Otherwise, once we deal with electricity and transport to the sea, what we need then is private sector investment in value addition, the services sector like this one, in light engineering and so on. Given what we are doing in the social sector; you should remember we have introduced free education in the primary schools and secondary schools, our literacy rate is now 70 per cent, Uganda can take off in a very short time. In about 10 or so years, we shall have gone to a different level.

Now this is where His Highness the Aga Khan comes in as a partner. I must salute His Highness the Aga Khan and the Ismaili community. They are very good partners. As you heard him saying in his statement, the investment atmosphere in the 1960s was uncertain, created by our leaders because they could confiscate your investments.

There were political upheavals because the regimes were weak. And this was part of the colonial heritage. That political instability you refer to was due to no structures left by colonialism. If you leave a country without an army, how can you have stability? Because the army is the pillar of State. Many of the countries in Africa had no armies.

Here in Uganda, we had one battalion of militia called the First Battalion King Africans Rifles, made of illiterate people. How could we avoid the sort of problems you are talking about? But fortunately, in the case of Uganda and East African, we have had time to build the pillars of the State. One of them is the army. Nobody can bring instability in Uganda. That story of instability is finished. It will never come back. We had a lot of challenges like Sudan, but those challenges could not move us. Why? Because we had a strong pillar, which we had already built during the time of resistance.

But in spite of those worries of the 1960s, His Highness the Aga Khan invested as you heard him say. That document is mandatory for reading the ministers; I am going to make it required reading. They invested in the development sectors; in education and health.

They feared to invest in the moneymaking ones so much. So you can see, even when he was doubtful about the future, he was a reliable friend of East Africa, of Uganda. And I like his candid documented position. He has told you in English. He didn't speak in French. I know he can speak French, but for this occasion he spoke in English, which I know Ugandans can understand.

So there should be no basis for misunderstanding. So I really salute His Highness for what he has been doing in Uganda, all these years. But now, in the case of Uganda, he has moved a step further. He has now gone into the commercial area because this Serena is not a school, it is not a hospital, it is a money-making unit. And you heard him say, 'I want to complete the circuit. I want to have upcountry lodges because you cannot have half tourism.'

Somebody cannot come to Kampala and stay there. We must give him all that he needs so that he completes the circuit he was talking about. But I am also interesting him in value addition. We shall discuss tomorrow. I am very convinced, and there is documentary proof, that the internal rate of return in Africa, even if you adjust it for risk, is high.

Therefore, I am inviting the Aga Khan Fuoundation; I welcome the one of schools and so on, but I like the one of business more than even the one of schools. I invite you to come and participate with us in value addition in cotton, textiles, fruits, leather. His Highness the Aga Khan, and his foundation, help us with the battle for value addition. We just need three things to take off; electricity, cheap transport to the sea, and value addition. The rest we are already doing. Human resource development, we are doing. Controlling inflation, we have done. Eventually, lowering the interest rates is being done. Telecommunications, we are doing. We need these three areas.

When you export a kilo of coffee, you get $1. When that kilogramme is roasted and ground in London by Nestle, it goes for $15. We are therefore aiding the UK, in every kilogramme of coffee with about $12 or so. We are the ones aiding the UK and not the other way round. And not only do we aid the UK in the form of money, we aid them in the jobs because those jobs are exported.

Recently, I was in China and the Chinese said they want raw materials and I said I am very sorry, I will not sell you raw materials, I suffered enough selling the Europeans raw materials. You will have to buy my finished products. Finished. We supplied raw materials to Europe for the last 300-400 years, including slaves. Should we now supply to China? What sort of idiots are we? This will not happen and I appeal to His Highness to please join us in this struggle.

Now coming to the Serena, here where we are, oh, this is a world class facility. I have moved around. And you know I have traveled around the world quite a bit. Although I came from the bush, I quickly caught up with all parts of the world. This facility is world-class and I thank the Prince; the one who followed this up and his people.

The imagination they put in. You can see they are very good at product tailoring. Hotels are not just about building walls and lifts and things like that. They have put in certain embellishments to the products; the water which is flowing around, the grass, the flowers and the whole concept that this should be seen as part of the Nile valley as you heard the prince say. It is fantastic.

They even used Ugandan artists to make some very good art pieces inside.This is a fantastic piece and we shall use it fully. It is my pleasure to congratulate His Highness for this magnificent investment.

Thank you very much.


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