Museveni State of the nation address sets tone for budget speech
KAMPALA, MAY 31 – Ugandan President Museveni has presented his state of the nation address that gives a hint to likely policy actions in the budget for the new financial year, due next week.
Addressing the second session of the 10th parliament, Museveni hinted at announcing policy measures to implement the ‘Buy Uganda,’ policy that manufacturers have been clamoring for; buying down the oppressive power tariffs for manufacturers.
The drive to promote local manufacturing would begin by getting all the disciplined forces such as the army, police and prisons to dress their officers and men in locally manufactured uniform kits. While he did not disclose how he is going to bring the 19 US cents per kilowatt hour price for electricity in the short term, Museveni pointed to the fact that while the colonial era Nalubaale power station was delivering electricity to bulk purchaser Uganda Electricity Transmission Corporation at 1 cent, the privately commercially developed 250MW Bujagali power station was selling the same unit at 11 cents.
The 600MW Karuma power station would deliver power at 4.8 cents while a unit out of the 183MW Isimba power station will cost 5 cents. The two projects are state funded with a mixture of concessional and commercial loans.
Rooting for local car manufacturing that is due to start in 2018, Museveni suggested importation of completely knocked down units or sub-assemblies as a way of building local capacity and employment. Museveni spoke out against an import dependent economy and hinted at policy measures to address this.
He also bemoaned the high cost of credit and pledged recapitalisation of the Uganda Development Bank to lend to agriculture.
Despite the positives, there were hidden traps such as a pledge to do something for local suppliers to the oil mining industry that are choking under loans after the sectors downturn.
The president’s address was seen as largely setting the pace for a budget reading next week in which the finance minister is expected to announce a number of measures aimed at lifting an economy bogged down by accredit squeeze and sluggish export sector.