Tororo County MP, Ekanya Geoffrey

Shadow Minister for Finance Geoffrey Ekanya says the Budget has not put enough money on Agriculture which he said it’s the backbone of the ordinary people.

Terego County MP Wadri Kssiano in his reaction said the Budget was just a recycling of the 2010/2011 Financial Year but was happy to not that it will reduce on Public Expenditure

Kakuto County MP Mathias Kasamba while commenting on the Budget said Government has addressed the issue of essential Products like Sugar, Kerissen which affect the local people

Busiro County East Medard Ssegona said on Education the Budget has tried to address it but advised Government to stop talking about fingers but focus on service delivery so that the ordinary people can benefit.

Ken Lukyamuzi the Man said the Budget did not talk about the Inflation in the Country and how the Libyan War has contributed to increasing Inflation that has contributed to high rocketing of food and fuel prices.

By Isaac Senabulya

The post Mixed reactions to Uganda 2011/2012 Budget speech first appeared on Uganda Multimedia News & Information.

• Uganda’s Economy grew by 6.3% in past financial year
• Total Resource Envelope for 2011/2012 is 9,840 billion shillings of which domestic revenue 6,330 billion (71%) donor funds 2,900 billion (29%).

Priorities

i. Infrastructure Development in Roads, Railways and Energy;

ii. Enhancing agricultural production and productivity;

iii. Employment Creation, especially for the Youth, Women and in Small and Medium Enterprises; and

iv. Human Resource Development, and

v. Improving Public Service Delivery.

Increased

• Levy on hides and skins doubled to $0.8 per kg from $0.4
• Sh96b more for drugs
• Sh24b more for maternal and reproductive care
• Sh58.8b more for universal education up to A-level and Business and Vocational education
• Sh44.5b for creating jobs
• Sh5b for irrigation and water harvesting
• Sh2b for rehabilitation of small warehouse around the country
• Sh200m for preparatory work of restocking north and north east
• Sh133b for commercialization of improved seeds and planting material
• Sh43b for maintenance and rehab of Kla roads
• Sh1,219.41b for transportRemoved
• Supply of solar energy VAT exempt
• Removal of VAT on ambulances
• Reduce excise duty on sugar by 50%
• Removal of excise duty on paraffin
• Import duty on hoes down to 0% from 10%
• Import duty on food supplements down to 10% from 25%
• Remove import duty on pre-mixes for animal and poultry feedsCUTS ON PUBLIC EXPENDITURE
• 50 % cuts in advertising in budgets for ministries and agencies
• 30% cuts in workshop, travel, vehicle, printing and stationary, entertainment and welfare and newspapers
• Freeze government vehicle purchases
• Forensic audit on government salaries, wages and pensions

·  Ensuing savings 40 billion shillings

Also see

Uganda 2011/2012 budget speech as Word Doc

Live Coverage of Uganda 2011/2012 Budget speech reading

President Museveni speech at reading of 2011/2012 budget

Uganda State of the Nation Address 2011

Uganda 2010/2011 budget speech in full

Uganda National Development Plan

The post Uganda 2011/2010 national Budget highlights first appeared on Uganda Multimedia News & Information.

BUDGET SPEECH

Financial Year 2011/12

Theme: Promoting Economic Growth, Job Creation and Improving Service Delivery

DELIVERED AT THE MEETING OF THE FIRST SESSION OF THE 9TH PARLIAMENT OF UGANDA

ON

WEDNESDAY, 8TH   JUNE, 2011

BY

HON. MARIA KIWANUKA

MINISTER OF FINANCE, PLANNING AND ECONOMIC DEVELOPMENT

PREAMBLE

Your Excellency the President of the Republic of Uganda, Your Excellency the Vice President, The Right Honourable Speaker of Parliament, Your Lordship the Chief Justice, The Right Hon. Deputy Speaker of Parliament, The Right Hon. Prime Minister; Honourable Ministers, Honourable Members of Parliament, Distinguished Guests

Read by Topic below or download copy at end of this article

[tab:Introduction]

Introduction

1. Madam Speaker, I beg to move that Parliament resolves itself into a Committee of Supply for consideration of:

• i) The Revised Revenue and Expenditure Estimates for the Financial Year 2010/2011; and
• ii) Proposals for the Estimates of Revenue and Expenditure for the Financial Year 2011/2012.

Finance Minister Maria Kiwanuka with the Budget

2. Madam Speaker, Article 155(1) of the Constitution provides that the President shall cause to be prepared and laid before Parliament estimates of revenue and expenditure for each financial year. I am accordingly performing this duty on behalf of the President.

3. Madam Speaker, with the overwhelming renewal of the mandate of the NRM Government, I wish to congratulate His Excellency the President for the victory achieved at the recent General Elections. I also extend congratulations to you Madam Speaker for your historic election to the high office of Speaker of Parliament, and to Honourable Members who have been elected and re-elected to the 9th Parliament; and to all Ugandans for successfully marking yet another milestone in democratic governance.

4. Madam Speaker, during His Excellency the President’s swearing in ceremony on 12th May 2011 and in the State of the Nation Address, he clearly outlined the key interventions crucial for the transformation agenda of our country. His Excellency the President placed emphasis on interventions in transport and energy infrastructure, skills development and the stimulation of employment, the need to enhance an enabling environment for business and improving the effectiveness of Government.

5. Madam Speaker, peace, security and political stability are an important pre-requisite for socio- economic progress. Stability, both within the country and in the region has been an important factor in increasing economic activity and promoting trade activities within the region from which our traders and the country as a whole have benefitted.

6. The Budget I am presenting today therefore reflects the Government’s continued determination to strategically prioritize those core programmes which form the main foundation for the transformation of our economy on a sound and sustainable basis.

7. Accordingly, Madam Speaker, the theme for the budget for the Financial Year 2011/12 is “Promoting Economic Growth, Job Creation and Improving Service Delivery”

[tab:2010/2011 Performance]

Economic and Sectoral Performance of the FY 2010/11 and the Medium Term Economic Outlook

8. Madam Speaker, the Background to the Budget 2011/12, which has been made available to Honourable Members, contains an extensive review of the performance of the economy and different sectors during Financial Year 2010/11. It also provides an assessment of the medium term economic outlook. I will therefore only highlight key developments and future prospects in my statement.

Economic PerformanceNational Output,

9. Madam Speaker, despite the slow recovery in the global economy and increasing domestic prices, economic activity remained robust during the past year. The total National Output of goods and services, commonly referred to as Gross Domestic Product (GDP) rebounded, growing at 6.3 per cent during the year, compared to 5.5 percent in Financial Year 2009/10. Consequently, National Output is projected to total Shs 38,800 billion, an increase from Shs 34,810 billion in the Financial Year 2009/10. The rebound in economic activity is largely attributed to the recovery in construction and increased trade activities. In addition, there has been a strong performance in the telecommunications, financial services, mining and quarrying sub-sectors.

Agriculture

10. Madam Speaker, the livestock sub sector grew by 3.0 percent, while the food crop sub sector registered 2.7 percent growth. However, poor rainfall and drought have severely affected the agricultural sector, with output of cash crops declining by nearly 16 percent during the current financial year. This reduced the overall growth in agricultural output to 0.9 per annum, compared to 2.4 percent recorded in the previous year.

Industry

11. Industrial production improved during the year, with growth estimated at 7.5 percent as compared to 6.5 percent the previous year. The robust growth was driven largely by construction, mining and quarrying activities. Construction activities recorded growth of 7.7 percent in real terms, following a 5.9 percent increase the year before. Growth in mining and quarrying activities is estimated at 15.8 percent during the same period.

Services

12. Madam Speaker, the services sector, which is currently estimated to contribute over 50 percent of total annual national output, continues to be a major driver for economic growth. This sector includes trade activity, education, telecommunications and financial services. During the year, the services sector grew by 8.0 percent, an increase from 7.4 percent in the previous year. This buoyancy in the services sector is due to stronger performance of the telecommunications, financial and trade activities.

13. Telecommunication services continued to be the fastest growing sector in the country and are estimated to have increased by 21.2 percent during the past financial year, while the financial services sector recorded strong growth at 10.3 percent in real terms. The growth in telecommunication and financial services has been driven by increased competition among service providers, which has resulted into significant price reductions and increased innovation leading to new products being offered on the market.

[tab:Prices]

Prices

14. Madam Speaker, the country has been experiencing price increases, about which Government is concerned, and will address with measures I will detail later. The general price level of all items increased by 16.1 percent per annum in May 2011. Food crop prices have registered the greatest increase recorded at 44.1 percent over the same period while prices for Electricity, Fuel and Utilities (EFU) items increased by 9.1 percent over the same period. Annual non-Food Inflation in May 2011 was 7.4 percent, confirming the fact that the major drivers of the current surge in inflation are constraints to food supply.

15. Madam Speaker, the causes of the increased food prices have been primarily poor rainfall and drought which affected food production during the last two seasons of this financial year. Increased regional demand for food has also contributed to the surge in food prices. At a regional level, countries in the East African Community have all suffered high food inflation as a result of drought and the high global food prices. It is important to note that the monthly inflation rate for food crops decelerated in May 2011 to negative 0.6 percent, compared to a monthly increase of 17.4 percent recorded in March 2011. This means that food inflationary pressures are abating and prices are expected to come down soon following the forthcoming harvesting.

16. Madam Speaker, inflationary pressures have also been driven by both increased global commodity prices and the depreciation of the Uganda Shilling, which has affected domestic prices. Inflation in China, India and Kenya, the main sources of Uganda’s imports, has risen persistently, leading to higher imported inflation. For example the average price of crude oil in April 2011 reached US $ 128 per barrel, an increase from US Dollars 66 in December 2009. This increase in international fuel prices passes through to the domestic market because of a depreciated Uganda Shilling. As a consequence, domestic pump fuel prices are now at an average level of Shs. 3,500/= per litre for petrol and Shs. 3,200/= per litre for diesel.

17. Madam Speaker, it is also important to note that the pump prices of petroleum products in Uganda are comparable to those within neighbouring countries, distance from the sea notwithstanding. In Rwanda, Kenya and Tanzania, fuel prices for petrol are equivalent to Shs 3,860, Shs 3,190, and Shs 3,300, respectively.

18. As I have noted, the primary driver of the current inflation is the shock to food prices. Non food inflation remains at relatively moderate levels. Annual services price inflation was only 2.6 percent in May 2011. Inflation pressures are therefore expected to recede when supplies of food to domestic markets improve during the course of next financial year both headline and core inflation.

[tab:Balance of Payments]

External Sector

19. Madam Speaker, Uganda’s balance of payments continued to be constrained as a result of slower growth of exports, tourism receipts and remittances on one hand, while imports continue to increase. Total exports of goods amounted to US Dollars 2.43 billion in the past year, compared to US Dollars 2.32 billion in the previous year. This translates into an annual growth of 4.7 percent compared to 4.5 percent in the last period. The slow growth in exports is a result of the on-going recovery from the global economic crisis in some of Uganda’s major trading partners. Imports of goods, on the other hand, have continued to rise as they are structurally dependant on domestic needs.

20. Total imports of goods and services amounted to US Dollars 4.54 billion, compared to US Dollars 4.0 billion in the previous year. This translates into an annual growth of 13.2 percent, compared to a decline of 1.1 percent in the previous year. The growth in imports has been much faster than that of exports, meaning that the gap between exports and imports, commonly referred to as the trade deficit, has widened. Most of the imports have been for production related activities to support a fast growing economy, including increased activity in the oil sector.

21. Madam Speaker, an increase in the world price for coffee has generated higher incomes for Ugandan farmers. Coffee export earnings this year increased by 13.1 percent as a result of higher global prices. Cotton export earnings have also registered a marked increase of 296 percent over the past year, from just US Dollars 17 million last year to US Dollars 67 million this year. At a regional level, the high demand for Uganda’s farm produce has been and continues to be an opportunity for farmers to increase their incomes by producing more for the market. Other formal non-Coffee export receipts amounted to US Dollars 1.34 billion. Exports that performed most strongly in this category include sim-sim which registered 83 percent growth, maize, recording a 17 percent growth and fish recording a 16 percent growth.

22. Madam Speaker, Foreign Exchange Reserves are projected at US Dollars 2.2 billion by end June 2011, equivalent to 4 months of import cover, compared to US Dollars 2.498 Billion in June 2010. The Inter-Bank Foreign Exchange mid- Rate in May 2011 was Shs. 2,388 per US Dollar compared to Shs. 2,259 per US Dollar in June 2010. The continued depreciation of the Uganda shilling reflects increased import demand in the face of weak export performance that has not fully recovered.

[tab:Monetary Sector]

Monetary Sector

23. Madam Speaker, the monetary sector in Uganda has been resilient, reflecting good management. Interest rates have remained stable over the past year. The lending rates in April 2011 were at 19.2 percent compared to about the same level in June 2010. The deposit savings rate remains low, at only 2.4 percent during April.

24. Treasury Bill rates increased during 2010/11 as the Bank of Uganda tightened monetary policy to prevent the shocks to food and fuel prices from spilling over into higher inflation throughout the economy. The interest rate on the 364 day Treasury Bill rose from 6.2 percent in June 2010 to 11.3 percent at the most recent auction in May 2011.

25. Private sector credit demand was buoyant during the fiscal year, in part because of borrowing by the private sector to finance capital investment.  Private sector credit grew by 34 percent in the 12 months to May 2011.

Fiscal Performance

26. Madam Speaker, fiscal performance was in line with the fiscal targets on overall resources and expenditures.

Budget Resources

27. Madam Speaker, total resources available for the budget amounted to Shs 8,374.3 billion during the financial year 2010/11. Oil revenue amounting to Shs. 1,008 billion was earned during the year, and Shs. 828 billion of this has been allocated to the Karuma Hydropower Project in the next financial year.

[tab:Revenue Collection]

28. Domestic revenue collections by the Uganda Revenue Authority (URA) during the year are projected to amount to Shs 5,024 Billion, representing performance of 99. 8 percent against the target of Shs 5,034 Billion. Domestic income tax collections are expected to be above target by Shs 38.1 billion.. Taxes on international trade are estimated to have grown by 22.5 percent, reflecting a surplus of Shs 163.4 billion, driven by strong growth in import volumes, coupled with the depreciation of the exchange rate.

29. External financing, comprising loans and grants from development partners, are projected to total Shs 2,681.2 billion during the year compared to a target of Shs. 2056.1 billion. This represents a performance of 30 percent above target.

30. Non-tax revenue collections contributed Shs 86.3 billion, which is equivalent to about 1.7 percent of the total domestic revenue. This represents a 94 percent performance against the target of Shs. 91.5 billion.  There is scope to increase non-tax revenue collections through reforms to improve transparency and accountability in non-tax revenue collection within Government institutions.

31. Several reforms in tax administration have been undertaken during the year to enhance the efficiency of tax administration and reduce costs of compliance. These reforms include rolling out online tax services in the Jinja. Gulu, Kampala, Mbale, and Mbarara stations. These developments allow taxpayers to register, file returns and pay taxes on-line, once they access the internet. Other improvements include quicker customs processes and improvements in the management of bonded warehouses. All these measures have contributed towards improved tax revenue performance. I call upon the business community and individuals to embrace the changes in revenue administration for the development of the country. An important reform that will be undertaken in the medium term is the introduction of the electronic Tax Register to enhance service delivery to the tax payers.  I am directing URA to start sensitizing and preparing the tax payers for this reform.

[tab:Expenditure]

Expenditure Performance

32. Madam Speaker, total approved Government expenditure for the financial year 2010/11 is projected at Shs. 9,325.7 billion. Development expenditure increased by 40 percent this year over the previous year, amounting to Shs 3,470.1 Billion. The increase in development expenditure is attributed to the depreciation of the Uganda shilling against major donor currencies which increased the donor disbursements in shilling terms, and the increased absorption on donor projects. This expenditure has financed projects in road works, energy, agriculture and water.

33. Salaries and Wages are projected to amount to Shs.1,620 billion this year, compared to Shs.1,300 billion spent in FY 2009/10. This represents less than 20 percent of the total budget.

34. Total interest payments are projected at Shs 419 billion, largely due to increased issuance of Government securities. This is meant to reduce money in circulation in the economy in order to dampen inflationary pressures which emerged in the second half of the financial year.

[tab:Social Benefits]

Social benefits

35. Madam Speaker, pension payments are projected at Shs 244 billion for this year, representing Shs 56 billion above the approved budget estimate of Shs 188 billion. This was because during budget preparation, there was insufficient information on benefits to be paid to ex-service men and local government retirees that were due to be transferred to the central government payroll.

Central Government transfers to Local Government

36. Transfers to Local Governments for purposes of meeting the local government wage bill and recurrent and development expenditures have continued to increase over the years. During the year, total local government transfers are projected to amount Shs 1,525 billion compared to Shs 1,461 billion in the previous year. Of the total local government transfers this year, Shs 360 billion is for development expenditure, Shs 248 billion for non-wage recurrent expenditures and Shs 960 billion for salaries and wages.

37. Implementation of the current budget has experienced extra budgetary pressures arising from the needs to finance the recent general elections and security related expenditures. In order to accommodate expenditure in these areas, cuts were effected on the Non-Wage Recurrent budget during the year, while protecting the priority areas of the budget. Although some areas did not receive full funding, the strategic priority objectives of the budget were not compromised.

[tab:2010/2011 achievements]

Sectoral Performance

38. Madam Speaker, in the budget speech for the FY 2010/11, Government pronounced several programmes to be undertaken. I am glad to report that despite the challenges facing the economy, significant progress has been registered for most of the programmes.

39. I will therefore just summarise some of the key achievements in the key priority areas outlined in last year’s Budget Speech. These achievement are in the following areas:-

• i. Infrastructure Development in Roads and Energy,
• ii. Promotion of Science, Technology and Innovation for Value Addition, Private Sector Development and Employment Creation,
• iii. Enhancing Agricultural Production and Productivity, and
• iv. Human Development.

Infrastructure Development in Roads and Energy

Road Infrastructure

40. Madam Speaker, I am happy to report that during the year, Government continued to consolidate the work undertaken in previous financial years to improve and further develop Uganda’s road network and to reduce the backlog of outstanding works. A number of key projects have been completed this financial year and strides have been taken to improve the condition of the national road network. Some of the projects which are close to completion include:

• i. Kampala -Gayaza-Zirobwe road;
• ii. Soroti-Dokolo-Lira road; and
• iii. Matugga-Semuto-Kapeeka road;

41. Substantial progress has been made towards the completion of Kabale-Kisoro-Bunagana Road, where 30km was completed in line with the target. A total of 44 km were completed against a plan of 34km in the reconstruction of Busega – Mityana Road. In addition, 30km of work was completed out of 47km planned on the Masaka-Mbarara Road.

42. Uganda Road Fund continues to finance road maintenance and has disbursed Shs. 468.2 billion since January 2010 to maintain 20,800 kilometers of national roads and 22,500 kilometers of districts roads. The funds were also for the maintenance of 4,800 km of urban roads, 30,000 kilometers of community access roads and 4,500 kilometers of municipal council roads. 4,850 kilometers out of the targeted 10,500 kilometers of unpaved national roads underwent mechanized routine maintenance. 850 kilometers out of the planned target of 1,610 kilometers of national roads were re-graveled.

[tab:Energy]

Energy Infrastructure

43. Madam Speaker, at the commencement of this year’s budget, some units of the 250 MW Bujagali Hydropower Project were expected to be available. While substantial progress was made, unforeseen geological complications have delayed the Project. Consequently, the first 50 MW should be available by October 2011.

44. In addition, generation capacity has been installed with the commissioning of renewable power projects at the 18 MW Mpanga Power Project, while the 6.5 MW Ishasha Power Project is expected to be commissioned later this month. The 3.3 MW Nyagak Hydropower project is expected to be commissioned in the course of the next year. Other mini-hydro projects under development include 10 MW at Buseruka and 1 MW at Maziba.

45. The feasibility study for the 600 MW Karuma Hydro power project was completed during the year, and the Government is ready to commence its construction. The feasibility study for the 140 MW Isimba Hydropower Project will be completed in the next financial year.

46. Madam Speaker, the Rural Electrification Programme made substantial progress with the completion of the following Low Voltage Network lines:-

• i. Nabitende – Itanda and Bugeso – Iwemba power lines;
• ii. Mutolere – Matinza – Nyakabaya;
• iii. Kyanika – Mulora;
• iv. Kitgum – Padibe – Lokung;
• v. Budusu – Bunawale; Japdong village; and
• vi. Mpanga-Kamwenge-Kahunge

[tab:Science & Innovations]

Science, Technology and Innovation for Value Addition

47. Madam Speaker, in order to improve Uganda’s competitiveness and business climate, as well as promote economic growth and create employment, Government prioritized a number of interventions during the financial year. The following achievements have been realized:

Information and Communications Technology

48. A total of 1430 km of optical fibre cable was completed under the second phase of the National Backbone and e-Government Infrastructure project. This compliments private sector efforts to develop high speed interconnectivity between the country and global internet and telecommunication networks.

49. In support of value addition, the Uganda Industrial Research Institute (UIRI) has commissioned several commercial production plants.  These include:

i. Potato processing facility in Kabale;

• ii. Peanut processing in Lira District;
• iii. Fruit juice processing in Mpigi District;
• iv. Meat processing facility in Busia District; and
• v. Mushroom processing center in Kabale District.

50. Other developments at the Uganda Industrial Research Institute (UIRI) include the completion of a facility for the production of a vaccine against the Newcastle disease in poultry and a foundry for the fabrication of a variety of implements, equipment and machinery for use by Small and Medium Enterprises. This will facilitate the fabrication, by the private sector, of machinery for producing feeds, silk processing, soap production, paper production and a variety of looms for weaving.

51. Under the Presidential Initiative on Innovations in Food Science Engineering, Technology and Skills for production, Employment and Development in Animal Industry (SPEDA), over 500 jobs have been created in production marketing; research and development; and in food technology.

Agricultural Production and Productivity

52. Madam Speaker, last year’s budget prioritized increased agro-industrial production and productivity, improvement in employment opportunities and increasing access to markets.

[tab:Agriculture Performance]

53. The National Agricultural Advisory Services (NAADS) supported approximately 487,500 farmers with inputs and advice to enhance food security. A further 22,000 out of a targeted 26,000 farmers received inputs and advice to enable them to become commercially oriented. These farmers were in the following enterprises: local and exotic poultry, improved cattle and goats; banana suckers & tissue culture; citrus, mango, coffee and tea seedlings.

54. The National Agricultural Research Organisation (NARO) developed 10 planned new crop varieties, and another 11 were submitted for approval before being released for multiplication.

55. The Agricultural sector continued to modernize livestock and livestock product marketing infrastructure in various districts. Construction of 9 modern livestock markets was completed in Masindi, Kamwenge, Mubende, Mbarara, Isingiro, Nakasongola, Luwero, Nakeseke, and Pallisa. In addition, 6 slaughter houses were constructed in Sironko, Pallisa, Isingiro, Kamwenge, Nakasongola and Nakaseke.

[tab:Education]

Human Resource Development

Education

56. Madam Speaker, in the Budget Speech of FY 2010/11, Government placed emphasis on the provision of education and skills development. In pursuit of these priorities, the Education sub-sector has achieved the following:

57. Government completed the construction of the following 5 Seed Secondary Schools and handed them over for use: Bagezza SSS in Mubende district, Namugongo SSS in Kamuli, Mbarara SSS in Mbarara, Mateete SSS in Sembabule and Pakada SSS in Zombo district. Government also completed the rehabilitation, expansion and re-equipping of Rukungiri Technical Institute. Furthermore, the rehabilitation and expansion of the following 5 existing traditional secondary schools were also completed:- Kabalega SS in Masindi, Mpanga SS in Kabarole, Kigezi College Butobere in Kabale, Lango College in Lira and Kololo SS in Kampala.

58. In order to promote science and technology in schools, 9 traditional secondary schools received fully equipped ICT laboratories. The beneficiary schools were: Rock High School – Tororo; Bishops School in Mukono; Kinyansano Girls in Rukungiri; St Mary’s College Rushoroza in Kabale; Sacred Heart SS in Gulu; Nyarilo SS in Koboko; Kibibi SS in Butambala; Wanyange Girls in Jinja and Mwereerwe SS in Wakiso.

59. Under the interventions to enhance skills development for employment generation, the Government has provided funds to complete and equip the following technical institutions: Abim, Katonga in Mpigi, Moroto, Kaboong, Nakapiripirit, Nkoko in Mayuge, Kasese Youth Polytechnic, Bumbeire in Bushenyi, Rutunku Community Polytechnic in Sembabule, Nakaseke Community Polytechnic in Nakaseke, Ssese Farm School and Mbale Community Polytechnic.  In addition, ten thousand (10,000) youth country-wide were trained in various non-formal modularised courses for self employment.

[tab:Health]

Health

60. Madam Speaker, a key priority for next year in the Health sector was the improvement of health infrastructure. I am pleased therefore to report that during the year, equipment worth Shs. 1.68 billion was procured and distributed to 4 hospitals and 12 Level 4 Health Centers (HCIVs). A further 11 Level 4 Health Centers (HCIVs) had theatre equipment installed. With financial assistance from the Chinese Government, a modern Hospital has been constructed at Naguru in Kampala. In addition, six mental health units were completed and commissioned under support from African Development Bank (ADB) in Masaka, Lira, Mbale, Moroto, Mubende and Jinja Regional Referral Hospitals.

61. In order to control the spread of malaria, the Ministry of Health procured 7.3 million Long Lasting Treated Mosquito Nets (LLITNs) which were distributed throughout the country. In addition, medicine worth Shs. 201 billion was procured and distributed to Local Government health units, general hospitals and regional referral hospitals. These included Anti-Retrovirals (ARVs) for treating HIV/AIDs and Artemisinin Combination Therapy (ACTs) for malaria. Utilising financial assistance from DANIDA, medicine worth Shs. 3.5 Billion were procured and delivered to Private Not For Profit (PNFP) Hospitals and Health centers.

[tab:Water & Environment]

Water and Environment

62. Madam Speaker, progress was registered in the rural water and sanitation sub-sector as follows:- 380 water facilities were rehabilitated and 17 valley tanks were constructed. In addition, 54 rainwater harvesting tanks were provided.

63. In the urban water and sanitation sub-sector, construction was completed on four piped water systems in Bwera, Mpondwe, Kiyenje and Rwene towns. With respect to water for production, Construction was also completed on Kagano dam and dams in Napak, Otuke and Moroto Districts, as well as valley tanks in Isingiro, Apac, Sembabule and Gomba Districts. In order to improve environmental management, over 4.5 million tree seedlings were distributed to agro-forestry farmers and 24 community watershed management groups were formed in the Karamoja region.

[tab:Economic Outlook]

Economic Outlook

Macro Economic Objectives

64. Madam Speaker, Government’s primary macroeconomic objective in the medium term is to promote rapid, broad based and sustainable growth, consistent with transforming the country to middle income status. This is possible given opportunities available including the recovery in the world demand for exports, the high demand for food in the region and globally, favourable conditions for private sector investment, continued peace and stability, and prudent management of newly discovered oil resources.

65. The macroeconomic objectives in the medium term therefore seek to attain the following:-

• i. the recovery in economic growth to at least 7 per cent per annum on average;
• ii. reverting to an inflation target of 5 per cent;
• iii. a stable, competitive exchange rate; and
• iv. prioritizing investments which enhance the productive capacity in the economy and employment creation.

[tab:Oil Management]

Oil Sector Management

66. Madam Speaker, with proven oil reserves estimated at 2.5 billion barrels, Government is finalizing the appropriate legal and institutional framework for resource and revenue management, which proposed legislation will be presented to Parliament. The Resource Law is intended to ensure efficient licensing, development, production and the utilization of the oil resource.

67. Madam Speaker, the legal framework will also provide for the design of an appropriate fiscal regime including revenue assessment and collection, treasury management, macroeconomic implications, petroleum fund management and intergovernmental fiscal relations. Aspects that prescribe adequate transparency and accountability will also be incorporated in the legislation.

68. The proposed legislation will also allow ease in the monitoring of oil revenues and establish an Oil Revenue Fund which will be used both to finance the budget and save and invest for future generations. To ensure prudent utilization of the Oil revenues, all investments and other expenses from the Fund will be budgeted for normally, and will be charged on the Consolidated Fund, with the necessary authorization by Parliament. Oil revenue will also be utilized to generate further growth and employment throughout all sectors of the economy.

[tab:Private Sector Development]

Private Sector Development

69. Madam Speaker, in light of Uganda’s low ranking with respect to business licensing and registration, I will be addressing these issues squarely. A comprehensive review of business related licenses will be undertaken with a view to simplifying requirements, reducing discretionary powers, and eliminating redundant procedures. This is aimed at reducing the time and cost to both the public and private sector.

70. In addition, lengthy business registration processes that impose an unnecessary regulatory burden keep a large number of businesses in the informal sector. These businesses consequently face limitations in accessing formal credit and contracts which constrains their ability to grow, create employment and contribute to the economy through taxes. In the medium term starting next financial year, efforts will commence to merge procedures, as well as introduce online registration processes.

Access to Affordable Financial Services

71. Madam Speaker, to address the problem of limited access to financial services, Government is undertaking reforms that will enhance increased leasing, and also undertake pension sector reforms to help increase the savings rate and provide long term investment funds, as well as the development of the mortgage industry.

72. To reduce the cost of capital to the business community, Government will fully implement the National Identification Card over the medium term, which will aid in the easy identification of borrowers. This is in addition to efforts to improve efficiency in the land registry to secure the land assets to prevent fraud which increases risk of borrowers.

[tab:Challenges]

KEY CHALLENGES

73. Madam Speaker, before I spell out the Budget strategy and priorities for the Financial Year 2011/12, I wish to highlight fundamental challenges which significantly affect the development of the economy. Furthermore, I will reflect on the challenges that have been the focus of attention in the recent past – notably inflation and unemployment.

Development Challenges

74. Madam Speaker, the NRM Government has continually stressed the importance of addressing the critical development challenges that constrain rapid transformation of the economy and its people to middle income status. The critical development challenges that Uganda faces have been clearly articulated in the National Development Plan, which therefore necessitates their prominence in implementation over the next five years. These challenges to social economic transformation include the following:-

. Inadequate Physical Infrastructure

75. Madam Speaker, inadequate physical infrastructure leads to high transport and communication costs and inadequate support for private sector growth. These impediments are characterised by

• i. Low access to affordable electricity leading to low consumption of only 70 kilowatt hours per capita;
• ii. Limited paved roads at 4 percent of the entire road network;
• iii. Low capacity utilisation of the rail network of which only 26 percent is operational and carries only 3.5 percent of freight cargo;
• iv. Moribund marine transport on Lake Victoria with only one major exit point in addition to no operational wagon ferries;
• v. Inadequate and consequently high cost band-width for internet connectivity; and
• vi. Low annual water consumption at only 22 cubic meters per capita compared to a world average of 600 cubic metres.

. Limited Supply to Critical Production Inputs

76. In addition to the low application of science, technology and innovation, Uganda faces an inadequate supply of critical production inputs characterised by:-

• i. Inadequate availability and use of improved seeds, planting materials, and animal breeds, leading to low agricultural productivity;
• ii. Limited application of irrigation and fertilizer use in agricultural production that could potentially increase yields; and
• iii. Limited availability and consequently high cost of critical input such as cement, iron and steel.

. Inadequate Skills Base and Social Infrastructure

77. While tremendous progress has been made in education and health, for which additional efforts will continue, Uganda’s human resource base is still characterised by the following:-

a. Qualitative and quantitative deficits in skilled human resources especially in technical areas;

b. Low school completion rates and limited capacities in vocational and technical education which ultimately is reflected in low productivity of Uganda’s labour force;

c. Inadequate qualified persons in some sectors. For instance Uganda has low health personnel to population ratio with only one doctor for 25,000 patients; and one nurse for 1,630 patients; and

d. Inadequate social infrastructure and associated low service delivery with low health facility to population and high student classroom ratios.

. Inappropriate Mindsets, Attitudes and Culture

78. Madam Speaker, the Uganda economy is still faced with poor ethical values in commercial and business practice, in addition to continued backward cultural practices such as marginalisation of the girl child in access to education and early marriages, and discrimination of women in land ownership and inheritance. The following aspects continue to constrain development:-

i. Poor business and entrepreneurial attitudes, the lack of good work ethic, integrity and patriotism in both the public and private sectors;

ii. Negative perceptions in use and appreciation of natural resources;

iii. Limited adoption of science technology and Information and Communication Technology in business and social spheres; and

iv. Negative attitude towards work and entrepreneurship in favour of paid employment, and poor time management.

. Limited Access to Financial Services

79. Madam Speaker, access to financial services and affordable long term finance, remains a major constraint especially for Small and Medium Enterprises in Uganda. The key challenges in the financial sector include:

i. Insufficient financial services infrastructure across the country, limited number of bank branches and poor access to rural financial services;

ii. Limited availability of long term funds for development finance, coupled with a low savings culture; and

iii. High costs of financing with the nominal lending interest rates of banks ranging from 17 to 23 per cent, and even higher rates in the microfinance sector.

. Limited Employment Opportunities

80. Madam Speaker, another challenge facing the economy is rising unemployment. It is estimated that the current job market can only absorb 20 percent of the youth. Fortunately, the youth are highly adaptable and only require attitudinal transformation, together with technical and business management skills to fit into the existing job market and create avenues for generating their own small scale enterprises.

81. Madam Speaker, what I have just highlighted above, are key challenges facing the economy. The Budget strategy and the priority interventions which I am going to elaborate will therefore focus on addressing these challenges, commencing next financial year.

[tab:2011/2012 Budget Priorities]

The Budget Strategy and Priorities for FY 2011/12

82. Madam Speaker, the focus during the next year will be to implement interventions that address the challenges I have highlighted, especially rising inflation, unemployment as well as physical and social infrastructure and improved social service delivery. These challenges require new bold ideas and renewed efforts from all stakeholders.

83. Madam Speaker, in finalising the budget proposal for this year, extensive consultations have been made with the private sector, including the Uganda Small Scale Industries Association (USSIA), the Uganda Manufacturers Association, the Uganda Bankers Association (UBA) and the Kampala City Traders Association (KACITA). In addition, we have also consulted our development partners, other ministries and agencies in Government and the Private Sector Foundation of Uganda (PSFU).

Resource Framework

84. Madam Speaker, the Resource Envelope for the next financial year amounts to Shs. 9,840 billion. This comprises of Shs. 6,330 billion financed from domestic revenues of which Shs 6,170 billion is from tax revenues, Shs 121 billion from Non Tax Revenues and Shs 39 billion from domestic loan repayments. Resources from both Tax and Non-Tax Revenues will contribute Shs. 6,290 billion. Domestic Revenues are projected to finance about 71 per cent of the budget in the coming financial year. External financing from development partners will amount to Shs 2,900 billion, contributing 29 per cent of the budget.

85. Madam Speaker, in light of the constrained Resource Envelope, I have only been able to allocate additional resources amounting to Shs. 1,586 billion to priority areas that will accelerate implementation of the National Development Plan (NDP) and the NRM Manifesto, as well as tackling the key challenges currently facing the country. Therefore, expenditures on other areas will be constrained.

86. Madam Speaker, the priorities for next financial year will aim at implementing the strategy that I have spelt out. Next year’s budget priorities are the following :-

i. Infrastructure Development in Roads, Railways and Energy;

ii. Enhancing agricultural production and productivity;

iii. Employment Creation, especially for the Youth, Women and in Small and Medium Enterprises; and

iv. Human Resource Development, and

v. Improving Public Service Delivery.

87. Madam Speaker, I now wish to turn to the details of the budget priorities for the Financial Year 2011/12.

[tab:Infrastructure]

Infrastructure Development

88. Madam Speaker, priority allocations are being made to power generation, road networks, irrigation schemes, schools and improvement of health infrastructure. This builds on our steady progress made in these areas over the past years..

Transport Infrastructure

89. Madam Speaker, in the transport sector I have allocated a total of Shs. 1,219.41 billion towards implementation of the following key projects, among other activities:-

i. Commencement of upgrading to bitumen of the following roads:- Moroto – Nakapiripirit (93km), Hoima- Kaiso- Tonya (73km), Mukono – Katosi (74km) and Mbarara – Kikagati (66km), and Ntungamo-Kakitumba (37km)Ishaka – Kagamba (35 km).

ii. Commence upgrading to bitumen of the following roads to improve road connectivity to Southern Sudan:- Gulu-Atiak-Bibia/Nimule and Vurra-Arua-Koboko-Oraba;

iii. Reconstruct Tororo-Mbale-Soroti, Lira-Kamudini-Gulu, Atiak, Moyo-Afoji and Mbarara-Ntungamo-Katuna roads;

iv. Continued improvement of the road network including Kabale-Kisor-Bunagana, Soroti-Dokolo-Lira; Fort Portal- Bundibugyo Lamia;Matugga-Semuto-Kapeeka and Nyakahita-Ibanda-Fort Portal –Kitagwenda roads;

v. Fast tracking of the rehabilitation and continuous maintenance of national, district and community access roads; and.

vi. Continue the construction of key bridges across the country and accelerate the planning for construction of the second bridge on the River Nile at Jinja estimated to cost US$ 102 million.

90. Madam Speaker, Government has also embarked on a long-term plan for improving the transport network and ease traffic congestion in metropolitan Kampala. With effect from next financial year, we will embark on the programme for expansion of key highways leading to and from the city. Government will support the newly created Kampala Capital City Authority, to speed up the improvement of the city’s infrastructure.  I have allocated a total of Shs 43 billion for the construction and maintenance of Kampala City Roads.

91. In addition to the resources to the road sector, the development of the Kampala – Entebbe highway will be undertaken utilizing a US Dollar 350 million loan facility from the Peoples Republic of China. Furthermore, in order to improve access to the Kalangala Islands, the construction and operation of a ferry from the Mainland will be undertaken in a Public Private Partnership arrangement during the year. In addition the main island road will be improved.

92. Madam Speaker, in addition to the activities I have detailed, Government will maintain funding to the on-going road construction projects as provided for in this financial year. In the next year, we will fast-track the completion of the various roads and embark on new ones as resources are freed from the completed projects.

Rail Transport

93. Madam Speaker, there is no doubt that continued reliance on road transport as almost a sole means of transport is partly responsible for the high transport costs and high depreciation of our roads due to the heavy road traffic.

94. In the FY 2011/12, the rehabilitation of the Kampala – Malaba railway will be undertaken and the operational efficiency along the Kampala – Mombasa will be improved. The rehabilitation of the Tororo – Pakwach railway will also be undertaken. In addition, the rehabilitation of the Marine Vessel (MV) Pamba will be undertaken to restore wagon ferry transportation on Lake Victoria, and also operationalise the Southern Route through Mwanza.

[tab:Energy 2011/2012]

Energy

95. Madam Speaker, to address increasing demand for electricity and also develop oil and gas reserves in the Albertine Graben (Mwitanzigye). I have allocated an additional 850 billion for the following interventions:-

i. Completion of the 250 MW Bujagali Hydropower Project

ii. Commencement of the construction of the 600MW Karuma Hydropower project, for which I have allocated Shs. 828.6 billion;

iii. Completion of preliminary work on 140MW Isimba hydropower plant, which will be developed with private sector financing, and also complete the feasibility of the first phase of the 600MW Ayago hydropower plant;

iv. Commencement of preliminary work on the construction of the Oil Refinery near Hoima , for which I have allocated Shs 14.7 billion for preliminary work; ;

v. Construction of a Petroleum Resources Database at the Ministry of Energy and Mineral Development, for which an allocation of Shs. 7 billion is being made.

96. Madam Speaker, most of the  above projects will be funded through a multi-pronged approach, that includes; utilization of our own domestic revenues and implementation of Public-Private Partnerships (PPPs), in addition to traditional sources of financing from bi-lateral and multilateral institutions and non-concessional financing.

97. Madam Speaker, in addition to the above major interventions, Government will continue to finance the implementation of various key projects under the energy sector particularly those under the Rural Electrification Programme.

[tab:Agriculture Priorities]

Agricultural Production and Productivity

98. The National Development Plan identifies agriculture as a vital contributory growth sector capable of reducing poverty and stimulating economic growth. Accordingly, in FY2011/12 priority interventions will focus on increasing production and productivity, agro-processing and increase enterprise efficiency through commodity value chains. The current increase in food prices is a clarion call for us to scale up efforts for increasing agricultural productivity.

99. Madam Speaker, Government will also continue with the ongoing efforts to provide affordable finance to enable farmers acquire necessary infrastructure to promote transformation to commercial agricultural production. The Agricultural Credit Facility which was introduced in 2009 was successful, achieving a disbursement of Shs 29.9 billion, representing a 99.7 percent performance. Eligible projects that received financing included the following:-

• i. Wheat, Cotton, Coffee and Tea Processing Plant and Machinery
• ii. Farm Machinery and Equipment
• iii. Milk Processing Equipment
• iv. Warehouse construction and Storage

100. However, performance of the scheme declined significantly in 2010 with a utilization of only Shs. 3.7 billion or a performance of 12.3 percent. This follows the increased risk that was supposed to be carried by participating commercial banks, as they were required to contribute twice as much as Government. In addition, the increase in interest rate to 12 percent was equally not favourable for several eligible projects.

101. Madam Speaker, I am therefore maintaining the Agricultural Credit Facility for a third year running with Government contributing Shs. 30 billion, which will be matched equally by participating Commercial Banks. Eligible projects in the agricultural sector, including the construction of warehouses and silos to improve storage, will therefore be financed at a preferential interest rate of 10 percent per annum for a maximum period of eight years, following the depressed performance in the last year.

102. In order to increase sustained production, Shs. 133 billion has been allocated will to the National Agricultural Advisory Services (NAADs) to increase the commercialization of improved seeds and other planting materials. Seed and agro-genetic propagation companies will be contracted within a long term framework to multiply improved seeds and planting materials, which will be delivered in time for planting during successive seasons over the forthcoming five years. The Ministry of Agriculture, Animal Industry and Fisheries will also enter into long term framework contracts with certified animal breeders for the multiplication of improved breeds of livestock. NAADs will also continue to provide extension services across the country.

103. In light of the prevalence of animal diseases and crop pests that reduce production and productivity, I have allocated a total of Shs. 9.5 billion to strengthen disease and pest control.

104. Madam Speaker, I have allocated Shs 200 million to commence preparatory work for the restocking programme in Northern and North Eastern Uganda. I will provide the fund for restocking in the following financial year.

105. Madam Speaker, a major constraint to agricultural production is the availability of water. I have allocated Shs. 5 billion to the Ministry of Water and Environment to provide irrigation and water harvesting technologies in collaboration with the private sector.

106. Madam Speaker, the availability of storage for crops has been a major constraint leading to the destabilization of food and other commodity supplies to the market. This constraint also denies farmers from getting reasonable prices for their produce, especially when there has been a bumper harvest. I am allocating Shs. 2 billion for the rehabilitation of small-scale warehouses across the country at sub-country level. Furthermore, the private sector will be encouraged to access funding from the Agricultural Credit Facility to construct warehouses and silos to improve storage. In future, large warehouses and silos will be constructed by Government at regional level across the country.

[tab:Job Creation]

Job Creation and Employment Strategy

107. Madam Speaker, as a first step to address employment challenges, I have allocated Shs. 44.5 billion towards creating jobs in the next financial year. The following interventions shall be implemented:-

i. A Youth Entrepreneurship Venture Capital Fund will be established together with the DFCU Bank, for which I am proposing an allocation of Shs. 25 billion. This will be used to support youth starting or expanding their business enterprises.  The loan sizes will range between Shs 100,000 to Shs 5 million or 20% of injected equity for youth group investments.

ii. Enterprise Uganda, shall undertake Youth Entrepreneurial Training Programme to instill business management skills among the youth, to enable them join the job market or create their own enterprises. I have allocated a total of Shs 3.5 billion for this purpose.

iii. Enterprise Uganda shall also undertake Business Development Skills clinics in collaboration with the private sector and Uganda Small Scale Industries Association (USSIA), with special focus on imparting technical skills to youth, using non-formal vocational training programmes. I have allocated an additional Shs. 1 billion specifically for this purpose.

iv. Dedicated work spaces will be established in markets starting in Kampala, in which youth and other small scale manufacturers under the Job Stimulus programme will undertake manufacturing and other processing activity. I am proposing to allocate Shs 16.5 billion for this purpose.

108. Madam Speaker, the implementation of these measures will be closely monitored and fine tuned to achieve the required outcome of increased employment.

[tab:Human Resource Dev’t]

Human Resource Development

Education

109. Madam Speaker, I am allocating an additional Shs. 115.9 billion to the Education sector. Emphasis will be placed on building on the successes of Universal Primary and Secondary Education by giving priority to the following interventions in the next financial year:-

i. Extension of free Universal education to A-level and Business, Technical, Vocational and Education Training (BTVET) beginning in January 2012, for which I have allocated an additional Shs. 58.8 billion. In addition, there will be scaling up of Universal Secondary Education with an additional allocation of Shs. 20.3 billion for the capitation grant;

ii. Provision of Shs. 9.2 billion for the necessary physical infrastructure  and Shs. 12.9 billion for personnel cost to address quality constraints at all levels of the education sector as well as Shs. 1.8 billion for enhanced inspection of schools ;

iii. Support private sector vocational institutions with equipment, key staff and salaries as well as enhanced inspection of schools; and

iv. Development and retention of a pool of national expertise in the emerging mining, oil and gas industries. This will be done through undertaking quick skills mapping and supporting the existing vocational and tertiary institutions to start or expand programmes for the required skills.

110. Madam Speaker, the legal and institutional framework for the proposed Student Loan Scheme for University Education will be completed in the course of next financial year and will be implemented in the future.

Health

111. Madam Speaker, whereas we have registered substantial progress, our health care delivery system still face many challenges ranging from inadequate infrastructure, staff shortages and low remuneration and general mismanagement of facilities. To consolidate the progress towards the achievement of the Millennium Development Goals in the health sector, Government will prioritise the following interventions in the next financial year:

i. Increased funding for drugs worth Shs. 96 Billion;

ii. Increased attention to Maternal and Reproductive Health for which I am proposing to allocate a total of Shs. 24 billion;

iii. The rehabilitation of Mulago National Referral Hospital together with the construction of Maternal and Child Health centre; and the

iv. Construction of new District Hospitals in Kawempe and Makindye divisions of Kampala.

Water

112. Madam Speaker, in the water sector, emphasis will be put on provision of new water point sources in rural areas, rehabilitation of existing sources, and provision of small piped schemes for Rural Growth Centres. In particular, 750 shallow wells, 910 deep wells, 36 piped water systems and 45 valley tanks will be constructed at the Local Government level during the year. This is in addition to ongoing work on gravity flow systems and piped water systems in Kaabong, Namalu, Abim, Bukedea and Kapchorwa which have already begun.

113. Further emphasis will be placed on improving efficiency in the Water sector. This will involve increased monitoring of performance to ensure the delivery of agreed targets.

[tab:Government Effectiveness]

Improving Government Effectiveness in Service Delivery

114. Madam Speaker, I am proposing several measures to improve the effectiveness of Government in order to deliver quality services. In order to re-focus public service efforts for delivery of quality outputs there is need to reduce wastage, laxity, and limited responsiveness. I am proposing the following actions:-

i. Effect cuts of 50 percent on advertising budgets for all Ministries and Agencies;

ii. Effect cuts of 30% on the budget for allowances, workshops and seminars, travel inland and abroad, fuel and vehicle maintenance, printing and stationary, welfare and entertainment, books, periodicals and newspapers, special meals and the purchase of furniture for selected Ministries and Agencies; and

iii. Freeze the purchase of Government vehicles, except for critical areas such as hospitals, police and the security services.

iv. Conduct an immediate forensic audit of Government salaries, wages and pensions to establish credibility

115. Madam Speaker, an estimated Shs. 40 billion has been raised from the above measures and will be allocated to service delivery infrastructure.

116. In addition, the following measures will be implemented, in collaboration with the ministries of Public Service, Works and Transport and the Public Procurement and Disposal of Assets (PPDA) Authority to improve service delivery:-

i. Hold Accounting Officers, including Chief Administrative Officers personally responsible for the delivery of performance targets, once funding has been made available to them.

ii. Implement performance contracts for top civil servants up to the level of Heads of Departments to strengthen performance management and enhance transparency and accountability;

iii. Enforce use of unit costing for all government procurement, against which mis-procurement will occur if reserve prices are not met; and

iv. Enforce use of government-procured equipment in the maintenance of national district and community access roads, with operational financing from the Uganda Road Fund and Uganda National Road Authority. Any waivers to use private sector contractors will first have to be approved by the Treasury.

Constitutional Self Accounting Bodies

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

. Courts of Judicature

. Electoral Commission

. Inspectorate of Government

. Parliamentary Commission

. Uganda Law Reform Commission

. Uganda Human Rights Commission

. Uganda Aids Commission

. National Planning Authority

. Office of the Auditor General

118. 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.

119. 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.

[tab:Taxation & Revenue Measures]

Taxation and Revenue Measures

120. Madam Speaker, the objective for our tax system is twofold:

i. Stability and predictability: and

ii. Efficiency of the tax system

121. The technical amendments I will be proposing are accordingly meant to meet the objective of the tax system.

122. I will also announce decisions agreed upon at the East African Community Pre- Budget Meeting of Ministers of Finance held on 7th May 2011 in Kampala.

Income Tax

Application of royalty

123. Madam Speaker, payments made as consideration for internet broadcasting.  This has been necessitated by innovations in technology I am proposing to amend the definition of royalty to include  The details are contained in the Income Tax (Amendment) Bill, 2011

Transfer Pricing Regulations

124. Madam Speaker, as the Ugandan economy gets integrated in global economy including set up of multinationals, the issue of transfer pricing demands urgent attention.   I have therefore finalized transfer pricing regulations to ensure that prices charged between associated entities for the transfer of goods, services and intangible property are in line with the arm’s length principle. The Regulations will be gazetted and will be effective 1st July 2011.

[tab:VAT]

Value Added Tax

Treatment of Imported Services

125. Madam Speaker, Hon Members, I propose to make clear the VAT treatment on imported services VAT will apply to imported services where the recipient of the services is a taxable person. The details are contained in the Value Added Tax (Amendment) Bill.

Supply of Solar Energy:

126. Madam Speaker, to promote clean and alternative energy, I propose to make the supply of solar energy VAT exempt. This policy is to encourage supply of solar power to consumers in rural areas by commercial solar producers. The details are contained in the Value Added Tax (Amendment) Bill, 2011

Supply of Ambulances:

127. I propose to remove VAT on ambulances to facilitate the transportation of patients to hospitals and other health facilities. The details are contained in the Value Added Tax (Amendment) Bill, 2011

Stamps Act

128. Madam Speaker, I propose to remove the stamp duty applicable on securities given in procuring small loans in order to lessen the burden of  borrowing to small income earners whose threshold shall not exceed 2 million shillings. Details will be contained in the stamp duty (Amendment) Bill, 2011

[tab:Excise Duty]

Excise Tariff Act

Excise Duty on sugar:

129. Madam Speaker, I propose to reduce the excise duty on sugar by 50 percent given that sugar is a key welfare item in many households in Uganda. This will lead to revenue loss of about Shs 8.5 billion. The details are contained in the Excise Tariff (Amendment) Bill 2011

Excise Duty on Kerosene:

130. Madam Speaker, to provide relief to households from the burden of increased kerosene prices, I propose to repeal the excise duty on kerosene. This will lead to a revenue loss of about Shs 12 billion. The details are contained in the Excise Duty (amendment) Bill 2011

Levy on Hides and Skins

131. Madam Speaker, Government introduced a levy on the export of raw hides and skins. The levy was intended to support and encourage value addition in Uganda. To achieve Government’s objective the levy is being revised from US Dollars 0.4 per kilo to US Dollars 0.8 per kilo On exports and outward processing of raw hides and skins

[tab:Investment & Trade Regulations]

Investment Trader Regulations

132. As part of the effort to streamline and improve tax administration I am terminating the Investment trader facility.

Reform of Tax laws

133. Madam Speaker, Government plans to reform the tax laws to ensure consistence with the current economic reality, best practice, regional integration and provide a taxpayer friendly regime. According Government has drafted a Tax Procedure code which will be introduced into Parliament next financial year.  Government is also in advanced stages of reviewing the Excise Law, stamp duty law Lotteries and Gaming and Pool Betting Laws.

[tab:EAC Pre-budget considerations]

Decisions Made at the EAC Pre-Budget Consultations by the Ministers of Finance:

134. Madam Speaker, I now turn to the decisions agreed upon during the pre-Budget meeting of the East African Community Ministers of Finance, details of which will be contained in the East African Community (EAC) Gazette:

Remission of Duty on Uganda’s Inputs and Raw Materials:

135. In recognition of the regional economic situation, the Ministers for Finance decided to grant the extension of duty remission to Uganda’s list of raw materials and industrial inputs for another one year.

Road Trucks and Semi-Trailers

136. The Ministers for Finance extended remission of import duty for a period of one year for road tractors for semi-trailers and trucks of carrying capacity of over 20 tonnes. Details are in the East African gazette.

Inputs for Assemblers of Refrigerators and Freezers:

137. In order to encourage value addition and assembling by local entrepreneurs, import taxes on components parts and inputs for assembly of refrigerators and freezers were remitted from 25 percent to 10 percent.

Hoes used in Agriculture

138. To augment local production and encourage food security, import duty on hoes was remitted from 10 percent to 0 percent.

Food Supplements:

139. In order to reduce nutritional deficiencies through use of food supplements, the Ministers reduced the import duty on food supplements from 25 percent to 10 percent.

Premixes

140. To support the Agricultural Sector through reduction of the price of feeds the Ministers decided to remove import duty on premixes used in the manufacture of animal and poultry feeds.

Motor-Cycle Ambulances

141. To encourage use of appropriate and affordable technology in rural areas the Ministers agreed to waive taxes on motor-cycle ambulances.

Double Tax Treaty

142. The Double Taxation Agreement among the East African Community (EAC) Partner States was concluded.  In accordance with the Ratification of Treaties Act I am laying before Parliament, the East African Community (EAC) Double Taxation Agreement to conclude the ratification process. The Double Taxation Agreement will promote cross-border investments among East African Community (EAC) Partner States..

[tab:Cotonou Agreement]

Ratification of the Revised Cotonou Agreement

143. ​Madam Speaker, the Cotonou Agreement which sets out the development, trade and political cooperation framework between the European Union and the African, Caribbean and Pacific States was concluded on 23rd June, 2000 in Cotonou,  Benin.  The Agreement first revised in 2005, was again revised in 2010.  It provides the framework for the European Union’s development funding to Uganda.  The Government of Uganda is required under the Ratification of Treaties Act, to table before Cabinet for approval and lay the Revised Agreement before Parliament.  I am therefore laying before you, the Revised Agreement for ratification in accordance with the Act.

[tab:Waived Taxes]

Report of Tax Expenditure for Financial Year 2010/11

144. 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 have exercised powers conferred by the Income Tax Act and Value Added Tax Act and waived shillings Three Billion One Hundred Ninety Five Million Nine Hundred Seventy Three Thousand and Five Hundred Forty Seven Only (Shs. 3,195,973,547/=).

145. Madam  Speaker, Government has also paid shillings fifteen billion four hundred ninety five million nine hundred forty seven thousand one hundred and twenty five  only (Shs 15,495,947,125/=) for Hotel, some Hospitals  and Tertiary Institutions inputs and materials and procurement of Non Government Organizations with tax exemption clauses in their agreement.

. Schedule of Indebtedness

Schedule Of Indebtedness

146. Madam Speaker, in accordance with the provision of Section 13 (1) and (2) of the Budget Act 2001, I hereby lay before the House the Statement on:

i. Government’s total external indebtedness as at 31st March, 2011; and

ii. the grants that Government received during financial year 2010/11.

147. With respect to Section 13 (3) of the same Act, Government did not guarantee any new loan during financial year 2010/11.

[tab:Conclusion]

Conclusion

148. The Budget strategy and priorities I have presented today seek to stimulate enhanced economic growth by creating an environment for increased economic activity for more Ugandans. A specific focus in the forthcoming year has been placed on the creation of the necessary environment for employment generation. The proposed interventions aim at building lifetime skills for the youth making them not only employable but also entrepreneurs and job creators themselves.

149. Addressing constraints in transport, energy and health and education and improving service delivery, will accord Ugandans a better quality of life. I commend this budget to the people of Uganda and especially the youth, who are our beacon of hope for the future

150. Madam Speaker, I beg to move.

FOR GOD AND MY COUNTRY

[tab:END]

Also see

Uganda 2011/2012 budget speech as Word Doc

Live Coverage of Uganda 2011/2012 Budget speech reading

President Museveni speech at reading of 2011/2012 budget

Uganda State of the Nation Address 2011

Uganda 2010/2011 budget speech in full

Uganda National Development Plan

Highlights of Uganda 2011/2012 Budget

The post Uganda National Budget 2011/2012 speech in full as read by Finance Minister Maria Kiwanuka first appeared on Uganda Multimedia News & Information.

BY

HE  Yoweri Kaguta Museveni President of the Republic of Uganda

At Parliament Kampala, June 8, 2011

HE The Vice President, Rt Hon Speaker, His Lordship the Chief Justice, Rt Hon Deputy Speaker, Rt Hon Prime Minister,  Rt Hon Leader of the Opposition, Hon Ministers, Hon Members of Parliament, Distinguished Guests, Ladies and Gentlemen

Madam Speaker, under Article 101 (1) of the Constitution of the Republic of Uganda, the President is required, at the beginning of each Session of Parliament, to deliver to Parliament an address on the State of the Nation.  This afternoon Madam Speaker, I am here to do two things.

First, I am here to fulfill the constitutional obligation by giving accountability of what has been done since the last address which I delivered on 2nd June 2010.

Secondly, I wish to apprise you Madam Speaker, Hon Members of Parliament and the country, of the plans and strategies of Government for the next twelve months.

Madam Speaker, permit me to congratulate all the Hon Members of Parliament upon being elected to the 9th Parliament. I congratulate you Madam Speaker and your Deputy upon your election to your respective prestigious positions.     I congratulate you, the Leader of the Opposition, upon your elevation to an essential office in democratic governance.    I congratulate all those who have been elected to various levels of responsibility.

[tab:Political Scene]

The Political Scene

Madam Speaker, on 18th February, 2011 we held Presidential and Parliamentary Elections.  These were followed by elections at various levels.  I congratulate all Ugandans upon their peaceful and active participation in the electoral process.  I also congratulate the Electoral

Commission for a job well done.  Where there was violence, it was the exception rather than the norm.  I thank all Ugandans who participated and contributed positively to the success of the elections.

I call upon the Electoral Commission and all stakeholders directly concerned, to study, in depth, the various reports that have come up on the electoral process.    The following must be of particular interest, among others:

• the management of the Voters’ Register, which I believe will be improved with the issuance of the National Identity Cards in the near future;

• the printing of Voters’ Cards and their security; and

• voter education in the light of a high percentage of spoilt votes.

Madam Speaker and Hon Members, we should congratulate ourselves upon funding fully both the Presidential and Parliamentary elections. We did not ask donors for a single coin for the 2011 elections.

Madam Speaker, while we congratulate the winners in these elections, I wish also to thank those who did not make it, for their participation. I implore them to continue to actively contribute to the development process of our nation as they prepare to try again in the next elections.

Those who feel strongly that they did not lose fairly, should seek redress in courts of law.

Madam Speaker and Hon Members, we must embrace all democratic principles within our respective political parties.  Discipline is as important for democracy as it is for the management of our political parties. Democracy and discipline should be enshrined in all our political parties’ constitutions and regulations.

[tab:Constitutionalism]

Constitutionalism and the Rule of Law

Madam Speaker and Honourable Members, I would like to re-affirm the National Resistance Movement Government’s total and firm commitment to the rule of law in the management of all public affairs of this country.

Let us all remind ourselves that while Chapter Four of our Constitution is elaborate on the Promotion and Protection of Fundamental and other Human Rights and Freedoms, those rights and freedoms are NOT

ABSOLUTE, hence the provisions of Article 43(1) that:

“In the enjoyment of the rights and freedoms prescribed in this Chapter, no person shall prejudice the fundamental or other human rights and freedoms of others or the public interest.”

Equally important, under Article 17 of the Constitution of the Republic of Uganda, duties of a citizen include, among others, the duty to respect the rights and freedoms of others; to protect and preserve public property; and the duty to co-operate with lawful agencies in the maintenance of law and order.

General limitations on fundamental and other human rights and freedoms are spelt out in Article 43 (1&2).  Let us all exercise and enjoy our rights and freedoms within the confines of law.

[tab:Economy]

State of the Economy

Madam Speaker and Honourable Members, on 8th June 2011, Uganda, like the other four partner states forming the East African Community, will be reading her Budget for the Financial Year 2011/2012.  The Budget Speech will give a detailed background to the economic outlook of our country.

Real Sector Performance

Uganda’s economy rebounded strongly in the first half of Financial Year 2010/11, recording a growth rate of 9% in the July – December 2010 period. Between July –September 2010 an annual growth rate of 5.1% was registered, while a 15.1% annual growth rate was registered in October – December 2010. The Industry and Services sectors grew by 17.6% and 13.6% respectively, in the two quarters. The month-on-month growth rate of economic activity in bricks and cement, saw-milling, paper and printing, as well as food processing was 8% in December 2010.

This overall economic performance of 9.1 % in the first half of the current financial year was better than that registered during the entire Financial Year 2009/10 which was estimated at 5.2%, as Uganda emerged from the global economic crisis.  The economic performance is still substantially higher than global and regional economic growth prospects estimated at 2.5% and 4.5% respectively.

The Ugandan economy was expected to grow by 6.6% for the whole of the Financial Year 2010/11, with Forecast for future years exceeding 7% per annum.

External Sector

Madam Speaker, Uganda’s balance of payments with the external world continued to be constrained as a result of slower growth of exports, tourism receipts and remittances in  the face of increased imports. This phenomenon is characteristic for exports given the on-going recovery from the global economic crisis by some of Uganda’s major trading partners.

Imports on the other hand, are structurally dependent on domestic needs, such as oil and petroleum products.   Though export receipts increased in January 2011 to US$ 211.6 million  from US$ 129 million in February 2010, imports were twice as much  at US$ 418.9 million, compared to export receipts of US$ 328.8 million in February, 2010.   Formal non coffee exports receipts that registered the largest increments include simsim, tea, cotton and fish.

Uganda’s National Foreign Exchange Reserves amounted to US $ 2.662 billion in January 2011 representing 4.6 months of import cover, compared to US$ 2.812 billion and  US$ 2.498 billion in December and June 2010, respectively representing 5.2 and 4.9 months of import cover.

The Inter-Bank Foreign Exchange mid-rate in February 2011 was Shs 2,341.9 per US Dollar compared to Shs 2,303.9 per US Dollar in December 2010 and Shs 2,257.3 per US Dollar in June 2010. The continued depreciation of the Uganda shilling is in line with increased import demand in the face of weak export performance that has not fully recovered from the global economic crisis.

[tab:Monetary sector]

Monetary Sector

Weighted average interest rates have remained stable over the period under consideration. The lending rates in January 2011 were at 20.1% compared to the same level in June 2010 and the savings rate remained at 2.4% during January 2011.

Treasury Bill rates exhibited increases between June 2010 and January 2011 as Bank of Uganda sought to stem excess liquidity. Consequently, the interest rate on the 91-day Treasury Bill rate increased to 9.1 % compared to 4.3%; the 182-day Treasury Bill interest rate rose to 9.4% compared to 5.3%; and the 364-day Treasury Bill increased to 9.8% compared to 6.2%. Private Sector Credit continued to grow at 35. 9% between July, 2010 and January, 2011 amounting to an average of Shs 689 billion per month, compared to Shs 438 billion per month between July, 2009 and January,2010.

Revenue Performance Revenue collections amounted to Shs 3,281.2 billion against the target of Shs 3,277.4 billion at the end of February 2011, representing growth of 20.1% compared to the same period last financial year and a marginal surplus of Shs 24 billion between July 2010 and March 2011.

Inflation The annual headline inflation rate (all items) for the year ending April, 2011 rose to 14.1% from 11.1% in March, 2011. The main driver of price increases remained food price inflation, which increased by 39.3%. Fuel prices inflation stabilized remaining at 9.74% in April, 2011.

The recent increase in prices has been driven by a combination of domestic, regional and global factors, including poor rainfall and drought that affected food production and, consequently, food prices. The loss of value (depreciation) of the Uganda Shilling affected prices.  The depreciation of the Uganda Shilling in turn, has been caused by the following three factors:

i) speculative tendencies in the run-up to the 2011 General elections;

ii) slower growth of exports, tourism receipts and remittances, even while imports kept increasing; and by

iii) continued increase in imports that are necessities, such as oil and petroleum products.

The Uganda Shilling however, has been strengthening over the last few weeks as speculative pressures that emerged during the election period subside, giving relief for prices of imported goods and petroleum products. Government is committed to ensuring the stability of the Uganda Shilling, as was shown by the active intervention by Bank of Uganda to mitigate volatility in the foreign exchange market.

Madam Speaker and Hon Members of Parliament, the recent rise in prices can also be explained by imported global inflation.  On the regional and international scene, Uganda’s major trading partners have recently been facing a surge in commodity prices, particularly for oil and food prices.

Indeed, world food prices have risen by 36%, according to the World Bank.

In comparison, within the Eastern African Region, Kenya registered increases in overall inflation of 9.9% in March, 2011 with annual food and fuel-related inflation rising by 15.9% and 15.89% respectively. This followed a 6.5% annual inflation which Kenya registered in February, 2011. Tanzania registered an annual inflation rate of 7.5% in February, 2011 rising from 6.4% in January, 2011. Ethiopia’s annual inflation rate dipped to 16.5% in February from 17.7% in the January, 2011 as food prices rose more slowly. Food prices in Ethiopia rose by 12.8% during February, 2011, slightly down from an increase of 13.6% in January, 2011.

Zambia’s annual rate of inflation increased to 9.2% in March, 2011 on account of increases in prices of non-food items such as fuel and transportation, lighting and clothing, even though food prices declined as the harvest period commenced.

[tab:Inflation Measures]

Government Measures to Deal with Inflation

Madam Speaker, measures to mitigate current inflation trends are packaged into short-term, and medium- to- long term actions, including the provision of energy and road infrastructure.  In addition, critical measures that have a dampening impact on the rapid rise in both food and fuel prices have been put in place.   Furthermore, it must be recognized that Government does not impose any tax on food items produced and consumed in Uganda. The only taxes on food are taxes on rice and sugar.

These are meant to protect local production and, consequently, jobs.

[tab:Agriculture]

Agriculture

Madam Speaker and Honourable Members, agriculture remains the backbone of our economy.   The NRM Government’s goal has been to fundamentally transform the three million Ugandan households in subsistence agriculture to commercialized agriculture.  Structural transformation entails moving away from rain-fed agriculture to irrigation, from the hand-hoe to mechanized agriculture; and from production for household consumption to production for the market with associated value addition through agro-processing.

In the short, medium and long-term, the NRM Government continues to undertake pivotal actions in a number of critical areas which I will now point out to you.

In Production and Food Security, Government will focus on increasing farm production and productivity through use of fertilizer and improved planting seed variety and animal breeds. It will implement household food security programmes through the National Agricultural Advisory Services (NAADS) in order to ensure that households have enough food for themselves throughout the year. In the medium-term the NRM Government will reach 100 households in every parish.

The NAADS Programme  is currently covering all the 112 districts. NAADS activities are to be found in the country’s 1,041 sub-counties, in its 176 urban councils and in the five divisions of our capital city, Kampala.

In November 2010, Parliament approved the second phase of NAADS as a sub-programme under the Agricultural Technology and Agribusiness Advisory Services (ATAAS). Benefitting from the latest agricultural technology and agribusiness knowledge, NAADS is set to increase agricultural productivity and farm household incomes. To-date NAADS has delivered grants of assorted inputs, tools and equipment to selected farmers countrywide. It has developed and disseminated new implementation guidelines to all local governments and other stakeholders.

It has established Village Farmer Fora (VFF) in 112 Districts. The programme has put in place operational Village Community Procurement Committees (VCPG) throughout the  country. NAADS has recruited Subcounty NAADS Coordinators (SNCs), District NAADS Coordinators (DNCs) and Agricultural Advisory Service Providers (AASPs).

In order to supplement NAADS efforts, Government has put Shs 15 billion in financial institutions as Commercialization Partnership Challenge Fund.

In addition, and under the aegis of  NAADS, Government has developed a special intervention for the Acholi  Sub-region to demonstrate modern farming in partnership with the Assembly of Acholi Clan Chiefs (Kerkwaro).

Similar interventions for the youth have been initiated in the Teso subregion.   An ambitious National Rice Development Strategy (NRDS) aimed ultimately at self-reliance in rice production by 2013, but targeting to double rice production in the next five years, adds to initiatives to ensure food security for the country.

Irrigation and Water for Production

Government has advanced plans to support households with small-scale rain-harvesting and storage technology and large-scale water reservoirs to minimize reliance on rain-fed agriculture alone.   To this end, Government has  finalized designs to rehabilitate four irrigation schemes namely: Mobuku, Olweny, Doho and Agoro to be completed by December, 2012.

[tab:Agric finance]

Agricultural Finance

Support to modernise agriculture is backed by an Agricultural Credit Facility (ACF), which in the 2010/11 Financial Year stood at Shs 90 billion. This money can be accessed from participating commercial banks at an interest rate not exceeding  12% per annum. Once borrowed, the farmer must pay back the loan over a period not exceeding eight years.

Under Livestock, Government efforts to prevent, control and eradicate animal diseases and vectors are underway in areas affected by Foot and Mouth Disease (FMD), Contagious Bovine Pleuro-Pneumonia (CBPP) and Contagious Caprine Pleuro-Pneumonia (CCPP). Government has supported the development of the Uganda Meat Producers Co-operative Union.

Progress has been registered in the dairy subsector with increased volumes of milk produced at an annual growth rate of 8-10%.   With new investments in the sub-sector, our milk-processing capacity will increase from 463,000 litres to 710,000 litres per day.

Madam Speaker and Honourable Members of Parliament, the  Fisheries Sub-sector, with support from the Chinese Government, finished construction and handover of the Aquaculture Technology Demonstration Centre at Kajjansi  in December, 2010.  With an operational fish-feed mill and a hatchery completed, Government support to aquaculture means that the country can produce enough fish-fry (fish seed) to meet national and export  demand.  Government finalized the rehabilitation and equipping of four (4) Aquaculture Development Centres.

Also, under the Fisheries Development project supported by the African Development Bank, Government completed construction of the landing sites of Bwonda, Gorofa, Mwena, Kiyindi, Kitobo and Majanji on Lake Victoria; and of  Lwampanga and  Bukungu on Lake Kyoga. Butiaba landing site in Lake Albert is near completion while work will start this year on Namasale and Kagwara landing sites by Lake Kyoga.

Targeted Interventions

Government has re-engaged various communities into meaningful production under targeted interventions such as the Karamoja Integrated Disarmament and Development Programme; the Northern Peace Recovery and Development Plan PRDP) and the Luwero-Rwenzori Development Plan.

In the next five years, the NRM Government will implement pledges to the people of Uganda made in its 2010 Manifesto to specifically enhance production efforts country-wide. It will target three million households, approximately  180,000 model farmers, 90,000 commercial farmers and 550 nucleus  farmers. Interventions will include those aimed at increasing production of improved seed and breeding stock through support to research. Other planned interventions include support for six market-oriented model farmers in every parish every year.

Also included in the package of interventions is support for three commercial model farmers per parish annually. The operationalization of the Commercialization Challenge Fund (CCF), under NAADS will give a boost to agricultural rural finance. This money is meant to provide financial support to nucleus farmers under the public/private partnership arrangement.

Government will also intervene in order to increase agricultural production and productivity by promoting the use of both organic and inorganic fertilizers. It will soon address the pertinent matter of actualizing phosphate fertilizer production at Sukulu Hills in Tororo.

Other interventions include the construction of multipurpose water reservoirs in catchment areas for human consumption, irrigation farming and for livestock. Special focus will be made on war-ravaged and former conflict areas including the Teso and Karamoja sub-regions.

Finally, in order to fulfil its pledge to transform Uganda, Government will enhance the marketing and processing capacity of agricultural products in four different ways. First and foremost, it will provide agro-processing technologies to organized groups e.g.  hullers, milk cooling plants, maize mills, etc at sub-county and eventually parish levels. It will continue to fund the Makerere University Food Science and Technology Department in order to enable graduates set  up fruit, vegetable, and animal products and agro-processing enterprises. It will also fund the Uganda Industrial Research Institute (UIRI) so that it can continue to establish/support agro-processing ventures —  as was done for peanut butter production in Lira District, fruit juice processing in Mpigi District, meat processing in Busia District,  and mushroom processing in Kabale District. The fourth way to enhance agro-processing and the marketing of Ugandan products will be through improved post-harvest handling.

Government plans to build storage capacity for food and other commodities at the farm level and also at sub-county, district and regional levels.

Finally, Government will establish 18 regional trade information centres to undertake market information dissemination and to build linkages with grassroots agro-processing units at sub-county and district levels.

These will be at Arua, Gulu, Kitgum, Lira, Moroto, Soroti, Mbale, Jinja, Iganga, Hoima, Luwero, Masaka, Kasese, Tororo, Mubende, Mbarara, Kabale and  Fort Portal.

Above all, Government will guarantee national food security, while also enabling the people to move from subsistence to market-oriented farming   for both the local and international markets.

[tab:Energy & Minerals]

In the Energy and Minerals Sector, Madam Speaker and Hon Members of Parliament, I would like to report on the progress of some of the projects undertaken.

Work on the construction of the  Bujagali Hydropower Project  dam, power house and its associated transmission line is nearly completed.

The commissioning of its first turbine of 50 MW is still on course for October this year. Thereafter, the commissioning of the full 250 MW plant will be in April, 2012.   The delay in having the first Unit on line in June, 2010 with final commissioning in April, 2011 was as a result of unforeseen poor rock conditions at the gated spillway which had to be handled in a special way.   Construction of the Bujagali Interconnection Project is also progressing well.   This Project consists of a 220 KV transmission line from Bujagali to Kawanda and a 220/132 KV substation at Kawanda.  This transmission line will evacuate power from Bujagali Hydropower Project to the National Grid.

A detailed feasibility study and engineering design for the  600 MW Karuma Hydropower Project  has been concluded. The  procurement process, to acquire a contractor to undertake the construction, has started.  Construction works are expected to commence in July this year, with financing from local resources.

On Renewable Energy Projects, Madam Speaker, I would like to report that construction of Mpanga Mini Hydro (18 MW) in Kamwenge was completed and the project was commissioned in April this year.

Buseruka Mini Hydro (10 MW), Ishasha Mini Hydro (6.5 MW), Maziba (1 MW) and Nyagak (3.5 MW) will be commissioned before the end of this year.

Feasibility studies for Kikagati (10 MW) were completed and construction is to start before the end of July this year.  Detailed feasibility studies were also completed for Olewa I (0.6 MW) and Olewa II (0.6 MW). Procurement of a contractor for the rehabilitation of Maziba (1 MW) has started while procurement of consultants to undertake feasibility studies for Nshongezi (22 MW), Ntono (2.5 MW), Ndugutu (0.5 MW) and Musizi (20 MW) has been concluded.

A total of 30  Rural Electrification schemes will be commissioned in September this year, Madam Speaker.  Another 19 rural electrification schemes are under construction and will be commissioned in November, 2011.

[tab:Petrolium]

Petroleum Sector

Madam Speaker and Honourable Members, to date, a total of over (49) exploration and appraisal wells have been drilled in the country.  Out of those, 44 have encountered oil and/or gas in the subsurface.  It is estimated that the discoveries made  to-date can support production of over 100,000 barrels of oil per day for 25 years. This quantity of oil justifies large-scale refining in the country.

In the short-term however, the discovered gas resources together with the test crude produced during appraisal, will be used to generate electricity, thus contributing to the country’s electricity needs.  Plans are under way to develop a gas-to-power project utilizing the discovered gas at Nzizi in Hoima District.

I am further pleased to report that  exploration drilling was extended to Kihiihi-Kanungu areas in Exploration  Area 4B in 2010.  Currently, the appraisal of the fields in Exploration Areas 1 (Pakwach Basin) and Exploration Area 2 (Butiaba-Wanseko area) is in progress. A final evaluation of oil reserves using 3D seismic survey and appraisal drilling is in progress. Once completed,  the development phase of creating infrastructure, like pipelines and oil-processing plants, will follow and will in turn lead to the start of oil production in the country.

The feasibility study Government has undertaken for the development of a refinery in Uganda, has revealed  that the refinery project is both technically and financially viable.  Consequently, Government has commenced development of a refinery as a project of three to five years.

Government is fast-tracking the construction of the refinery to process crude oil from the Albertine Graben. While this is a medium-term measure, it will ensure that the vagaries arising from being supplied with fuel from far afield are mitigated. It will also allow the building of larger fuel reserves than those held by oil companies today; to deal with any shocks that may arise in supply.

Madam Speaker and Honourable Members, in 2010 petroleum and other fuel products supply was generally smooth, except for the month of September when erratic supplies of petrol were experienced.  However, the situation has significantly changed since the beginning of this year, mainly because the demand for oil internationally, regionally and locally has continued to grow, surpassing supply.

As an illustration, here at home, statistical data from the Ministry of Energy and Mineral Development for February and March, 2011 indicates that while PMS (Petrol) requirements for the month of March, 2011 were 32,832,900 litres, only 22,381,247 litres were supplied, leaving a deficit of 32%.  Projected AGO (Diesel) requirements for March 2011 were 76,556,500 litres but only 40,722,383 litres  were supplied, leaving a deficit of 47%.

Madam Speaker,  it is irresponsible and unpatriotic for some leaders to mislead the public that  fuel prices in Uganda are the highest in the Region.  In our Region, comparable fuel prices in the month of April were as follows:

Petrol Diesel

Uganda  Shs. 3,500 Shs. 3,000

Kenya  K. Shs. 112

(Ug. Shs. 3,192)

K.Shs 110

(Ug. Shs.3,135)

Rwanda  R. Fr. 1015

(Ug. Shs 3,857)

R. Fr. 1015

(Ug. Shs. 3,857)

Tanzania  T. Shs. 2006

(Ug. Shs. 3,210)

T. Shs. 2000

(Ug. Shs. 3,200)

Southern

Sudan

S. Pound 4.5

(Ug. Shs. 3063)

S. Pound 3

(Ug. Shs. 2040)

Notwithstanding the discomforting prices, the following positive developments are worth mentioning. First, the Jinja Storage Tanks with a capacity of 30 million litres as national strategic fuel reserves, are being refurbished and restocked under a Public-Private Partnership initiative.  Furthermore, in order to ensure availability of petroleum products in the country, all oil marketing companies are required to maintain stocks of up to 10 working days.

Secondly, in line with the Petroleum Supply General Regulations, 2009, Government issued new guidelines for licensing of operators in the petroleum sector regarding compliance with Health, Safety and Environmental Regulations. These ensure the systematic development of petroleum marketing facilities in the country. Last but not least, as a result of efforts towards quality and standards monitoring, noncompliance levels reduced from 29% in 2009 to 4.2% in 2010.

In the Mining sector,  Madam Speaker and Honourable Members, the following are worth noting, among other developments. During 2010, 123 Prospecting Licenses, 133 Exploration Licenses, 18 Location Licenses, 2 Mining Leases, 51 Mineral Dealers’ Licenses and one Goldsmith’s License were granted.  This is attributed to the dissemination of the results of the airborne geophysical survey.

In 2010, Government realized revenue to the tune of  Shs 3.631 billion as Non Taxable Revenue (NTR) accruing  from royalties and mineral license fees.  Royalties alone contributed Shs 2.795 billion of the total revenue generated, shared or to be shared at a rate of 80% for the Central Government, 17% for Local Governments of the mining districts and 3% to the lawful land owner.  The major contributors to the revenue earned in 2010 were Tororo Cement Ltd,  Hima Cement Ltd and Kasese Cobalt Company Ltd.

[tab:Education]

Madam Speaker, Hon Members of Parliament, I now turn to the SOCIAL

SECTOR.  In Education,  among the interventions  undertaken under the Primary Education sector in Financial Year 2010/2011 were:

i) the procurement of P4 and P5 curriculum;

ii) the construction of teachers houses in 80 schools in Arua and Nebbi;

iii) the admission of more pupils in schools in war-affected areas e.g Laroo school;

iv) the signing of customized performance targets contracts by  95% of headteachers and their deputies in all quality enhancement initiative districts; and

v) the payment of hardship allowances to teachers in hard-to- reach areas.

In the year 2011/12, the  sector aims to achieve a pupil-teacher ratio of 56:1 in all Government schools. This will be attained by deployment of teachers across all districts. The sector plans to strengthen routine inspection and head-teacher training  in leadership management in all Government-aided schools.

Under Secondary Education, the year under review witnessed  the payment of capital grants for both private and universal secondary education and the disbursement of funds for completion of 16 administration blocks for seed schools and for rehabilitation and expansion of 11 traditional schools.  It also witnessed the rehabilitation and commissioning of Sir Samuel Baker school; and the aiding of 66 private community secondary schools.

Future prospects for  FY 2011/12 in Secondary Schools A major intervention in 2012 is the extension of universal secondary education to cover “A” level. Other prospects include the provision of grant aid for private community secondary schools. In addition, it is in plan to construct teachers’ houses for specific seed secondary schools.

Additional teachers’ houses as well as classrooms, science laboratories, libraries and hostels in island or mountainous and other hard-to-reach areas are to be constructed under the Universal Post-Primary Education and Training (UPPET) World Bank funded project. It is also in plan to provide management training to all Board Members and Parent-Teacher Association members in all schools in the country.

Madam Speaker and Honourable Members, the Commission of Inquiry on the mismanagement of UPE/USE funds started its work in January, 2011.    Under  Business, Technical, Vocational Education and Training (BTVET),  capitation grants have been paid in Health Training Institutions Teachers’ Colleges, Technical Institutions and Colleges of Commerce, among others. Libraries have been equipped while dormitories and classrooms have  been constructed in several institutions. The popularization of the BTVET Act 2008 will be continued, as will the rehabilitation and construction of physical infrastructure. All these activities will continue in districts that are still in need.

Success has been registered in  some of the following areas in  Higher Education, Madam Speaker. There has been  transfer of funds to Kumi University, West Nile University and to Kigumba Petroleum College. Topup allowances to students on Government-to-Government scholarships in foreign countries have been provided. Some 60,000 students have been admitted to Universities and other tertiary institutions in the Academic Year 2010/2011. Last but not least, another University is in the offing with the acquisition of 130.05 acres of land at Muni Hill for Muni University.

Plans for the Financial Year 2011/2012  include, among others, ensuring  that internship and field attachments are undertaken by all public universities. Government will continue with construction work at Uganda Petroleum Institute, Kigumba and expand the admission of students. It also plans to set up a Task-Force to look into the establishment of the Open University of Uganda. Government will continue the construction of infrastructure at Muni University in readiness to open its gates in August 2012. As a special consideration for students from the North, Government will, in the next financial year, support students from Acholi and Lango sub-regions who do not qualify for Government sponsorship but qualify to join University.

Teacher Instructor and Education Training

Notable achievements here were the commissioning of Shimoni Core Primary Teachers’ College in 2011, teacher participation in harmonization of East African Teacher Education Curricular, as well as completion of construction of teachers’ colleges and tutors’ houses.

Plans for Financial Year 2011/2012 include the completion and relocation of Shimoni demonstration school infrastructure. Also at hand is the expansion, rehabilitation and construction of infrastructure for teachers colleges. Targeted are core Primary Teachers’ Colleges, National Teachers’ Colleges, Instructors’ Colleges and Mulago Health Tutors’ College.

Under  Special needs education, career guidance and counseling, teacher training and orientation of administrators on specialized guidance and counseling was done in selected districts and Institutions.

Future plans include the development of guidance and counseling policy, as well as its five-year strategic plan. Also in plan is the construction of special schools for both the blind and the deaf in West Nile and Kibaale respectively; and the placement of school leavers.

Among the notable achievements under the National Curriculum Development Centre was the completion of the drafting of the Kiswahili Curriculum for pre-primary and primary schools. The translation of the Early Childhood Development Care Givers Guide in 16 languages was another major achievement; as was the development of Supplementary Readers for lower primary.

Plans for 2011/2012 Financial Year include the piloting of the Kiswahili Primary School Curriculum and the development of educational materials for special needs deaf and blind children. A new “A” level

Secondary School Syllabus featuring 19-subjects will be brought on board this year. The completion of the National Curriculum Development Centre Buildings is in prospect for the next financial year.

[tab:Health]

Health

Madam Speaker, Government is totally committed to the improvement of health service delivery all over the country. Government plans to achieve this through the implementation of the five-year Year Health Sector Strategic and Investment Plan that focuses on interventions in priority areas aimed at reducing morbidity and mortality.  Emphasis is laid on the delivery of a minimum health-care package consisting of the following elements:

(i)  health promotion, disease prevention and community health initiatives, including epidemic  and disaster preparedness and response;

(ii) maternal and child health;

(iii) nutrition;  and

(iv) prevention, management and control of communicable diseases.

Significant achievements have been registered in malaria control through special interventions, including distribution of mosquito nets and improvement in the referral system.

Health Infrastructure

Government has embarked on the rehabilitation and the re-equipping of all existing medical facilities. It is also embarking on the construction of new structures such as staff houses. A number of projects attest to this.

The following hospitals underwent partial rehabilitation during the year under review: Nebbi, Apac, Tororo, Bududa, Kambuga, Rushere and Itojo. The Health Centres of Lyantonde, Masafu, Bukwe, Kyenjojo, Katakwi and Buwenge are being upgraded to general hospitals.

Government has constructed Mental Health Units of 45-bed capacity each at seven Regional Referral levels.  Conversion of Mbarara Referral Hospital to a 608-bed National Referral Hospital is in advanced stages.

Plans to de-congest Mulago National Referral Hospital through construction of three satellite hospitals at Naguru in Nakawa Division, Kawempe in Kawempe Division and Kiruddu in Makindye Division have been concluded. Construction of staff accommodation in Health Centre IIs and Health Centre IIIs in Karamoja region with support from the Italian Government has commenced.  The Rehabilitation and reequipping of two Regional Referral Hospitals (Moroto and Mubende Hospitals), 17 General Hospitals and 27 Health Centre IVs, using a loan from the World Bank is under way.

Supervision and Monitoring

A system of intensified supervision and inspection is addressing the issues of staff absenteeism, pilferage of drugs, staff and quality of care, among others.  The Medicines and Health Services Monitoring Unit established in State House, to further strengthen inspection, has done a commendable job especially in exposing drug thieves, a number of whom are already being prosecuted.

[tab:Social Protection]

Social Protection Programme

Madam Speaker and Hon Members of Parliament, in September,  2010, Government launched the expanded Social Protection Programme whose aim is to provide a mechanism for  reducing chronic poverty; and for  enabling vulnerable groups to benefit from the opportunities of economic growth by engaging in productive activities.

The special grant for programmes for persons with disabilities was increased from Shs 1.5 billion covering 48 districts in the Financial Year 2009/2010 to Shs 3.0 billion for all districts in the Financial Year 2010/2011.    The grant has been used to support the creation of employment opportunities for persons with disabilities through entrepreneurship training and provision of seed capital.

Labour and Employment In November 2010, Cabinet approved the country’s National Employment Policy which I officially launched on Labour Day, 1st May, 2011.  The Policy identifies priorities and strategies for increasing employment opportunities for Uganda’s labour force and improving roductivity of the workers.

Under the Externalization of Labour Programme, by December 2010, a total of 9,960 Ugandans had secured employment outside the country through recruitment agencies licensed by Government.  In December, 2010 those workers remitted a total of US$ 5,478,000.

To address the problem of unemployment and underemployment, Government through the Ministry of Gender, Labour and Social Development, provided non-formal vocational and entrepreneurial skills training to 334 youths; and seed capital grants to 167 youth groups in 19 districts.

During the next Financial Year,  emphasis will be put on building capacity of Labour Market Information Systems to produce accurate and timely information on jobs, desired skills and job seekers, among others.

Availability of labour information will enable the labour force to access employment opportunities within Uganda, in the East African Region and beyond.

[tab:Roads]

Transport

Road Sector

Madam Speaker and Hon Members, the  Shs 283.9  billion passed by   Parliament as the Uganda Road Fund for road maintenance, has been disbursed to the Uganda National Roads Authority (UNRA) and to the District, Urban and Community Access Roads agencies respectively, for road maintenance.

By December 2010, the percentage of paved national road networks in fair-to-good condition was 75% against the annual target of 80%. The achievement of routine mechanized maintenance of paved roads was 1,716 km out of the annual target of 2,000 km.  The achievement of periodic maintenance of paved roads  (re-sealing) was 86 km out of the annual target of 127 km.

Madam Speaker, the detailed design of the Second Nile Bridge at Jinja commenced, along with the construction and rehabilitation of Aswa Bridge on Gulu-Kitgum  road.  Rehabilitation was also undertaken on the Awoja Bridge on Mbale-Soroti road.

The following, among others, are planned for the Financial Year 2011/2012:

(i) Tarmacking of a total of 150 km of gravel national roads, along with the rehabilitation of 150 km of paved national roads.

(ii) Dualling of Kibuye-Busega-Mpigi, Kampala-Northern bypass and Kampala-Jinja will commence along with a Design Review for the proposed Kampala-Entebbe Express Highway.

(iii) Under the District, Urban and Community Access Roads (DUCAR) Network, apart from routine maintenance, 3.5 km of roads in Kampala Capital City will be upgraded to paved standard along with 15 km of  low-cost seals elsewhere. One hundred and fifty (150) km of district and tourism roads will be rehabilitated.  Contractors, labour-based societies and district non-engineering staff will be trained.

Madam Speaker, the enactment of the Kampala Capital City Authority Act means that the Central Government is now fully responsible for roads in the City.  Government will, therefore, in due course start a three-year programme to address road and traffic improvements within Kampala City.

I appeal to all Kampala residents especially those in Bwaise, Kalerwe, Kawempe, Ndeeba, Nateete, Nalukolongo, Kisenyi and Kyebando to stop dumping garbage in the drainage system. Garbage blocks the smooth flow of water resulting into floods in the City.

[tab:Rail & Water]

Rail and Water Transport

Repair of MV Kaawa and dry dock was started.  Design  for MV Kabalega II, Port Bell and Jinja piers is to start later this year. The ferry for Lwampanga-Namasale will commence operations. Procurement of a new ferry to replace the old  one at Laropi will commence.   Socio-economic surveys on Lake Victoria, Albert and Kyoga were conducted.

The feasibility study for repairing  and upgrading the Tororo-Pakwach railway line was completed and the study for Kampala-Kasese railway line is on-going.

During the Financial Year 2011/2012  the feasibility study for upgrading the Kampala-Kasese railway line will be completed and the study for the Kenya-Uganda standard gauge railway line will commence.

Under Air transport, the second phase of construction for the terminal building at Arua is currently being carried out. So is the perimeter wallfencing of Gulu Airport.  In the coming Financial Year, works on Kasese Airport development project will start almost simultaneously with work on the terminal building at Masindi  aerodrome.  A bilateral air service agreement between Uganda and the Democratic Republic of Congo will be finalized.

With regard to Road safety, Madam Speaker and Hon Members, the increasing number of road traffic accidents have been attributed mostly to over-speeding on the improved  roads, as well as to carelessness and inconsiderate use of the roads.    I appeal to all motorists and other road users to  avoid  over-speeding,  drunken-driving and use of drugs which have been major contributors to the occurrence of accidents.  All road users must observe traffic rules.  The Police must step up the enforcement of the Traffic and Road Safety Act as well as the Regulations made under it.

[tab:ICTs]

Information and Communications Technology (ICT)

Madam Speaker and Hon Members,   indicators of the ICT sector’s contribution to Uganda’s economic growth in terms of GDP, investment, employment and  tax revenue have all improved, as highlighted below.

(i) Investment from the private sector for the Financial Year 2010/2011 is estimated to be  US$ 300 million compared to US$ 270 million in 2009.  Most of the investment has been in the form of infrastructure and network improvement by new and existing service providers.

(ii) Gross turnover sales from the communication sector for 2010/11 is estimated at US$ 936 million.  The revenue is predominantly from the telecommunications subsector driven by increased competition, the landing of the undersea cable  systems in the coast of East

Africa and the national terrestrial fibre rings starting to reach various parts of the country.  New services such as mobile banking are also taking root.

(iii) In terms of Government revenue, it is estimated that the communications sector generated  close to Shs 300 billion during 2010/11, an increase of close to 20% from the previous year.

(iv) The ICT sector has become  one of the leading sources of employment, with close to 14,000 persons directly employed by both service providers and Government by December 2010; and more than 800,000 indirectly employed.

(v) By December 2010, the estimated number of fixed and mobile voice telephony customers was more than 12.8 million compared to 9.6 million in December 2009.

(vi) The increase in competition, coupled with the announcement of reduced interconnection rates by the Regulator in July, 2010, triggered what is now being referred to as “price wars” in the telecommunications market, leading to reduced call prices.

(vii) Data and Internet   Like the voice market, the internet market was very vibrant during 2010/11.  By the end of September 2010, international bandwidth uplink stood at 3,433 mbps compared to a mere 850 mbps in December 2009, an increase of more than 300%.

The improvement is attributed to the increased competition  since the landing of the three cable systems (Seacom, TEAMS and Easssy) on the East African coastline;  and to increased competition and infrastructure at the national level.

Mobile Broadband Access  By the end of 2010, it was estimated that there were more than 600,000  mobile internet subscriptions compared to 310,000 in December 2009. This monumental growth is attributed to price drops for both bandwidth and mobile modems.

(viii)  Broadcasting and Multimedia Subsector By December 2010, the number of private FM frequencies issued had risen from 202 to 210, of which 156 are operational.  Fifty-four (54) FM stations were assigned frequencies but are yet to get on air.  Of the 46 TV stations assigned frequencies, 26 are on air.

Madam Speaker and Honourable Members, it is essential that we put in place effective measures to prevent and fight cyber crime.  For the Financial Year 2011/2012 the following will be undertaken, among others:

(a) Expansion of Tetra Communications System;

(b) Digital Television and Data  casting (Migration from analogue to digital);

(c) Investment in new business ventures in Posta especially in ITled initiatives including setting up information centres to enhance electronic communications, instant money transfer and counter automation;

(d) Setting up a National Data  Centre to provide centralized storage and security of all Government Information.

(e) Operationalization of ICT Security and cyber laws. Land

Government is committed to sustainable land use and land tenure security.  The following have been achieved, among others:

(i) Enactment of the Land (Amendment) Act, 2010 which has enhanced the security of occupants on registered land in accordance with Article 237 of the Constitution.  The Act has been translated into 19 local languages and distributed widely.

(ii) Eighty District Land Boards  have been given training on the determination of annual nominal ground rent (busuulu).

(iii) The School of Survey and Land Management at Entebbe, which had been closed for over ten years, was re-opened to build human resource capacity in the land sector.

(iv) Construction of the National Land Information System Centre on Plot 9 Lourdel Road commenced, and will be completed before the end of this year.  When the Centre becomes operational, it will be a

One-Stop-Centre on land information in the country.

(v) Construction/renovation of Regional Land offices covering the  districts of  Arua, Gulu, Lira, Masindi, Kabarole, Masaka, Mukono, Kibaale, Mbarara and Wakiso was completed.

(vi) The Uganda National Land Policy, which provides a framework for land management and administration, will soon be discussed by Cabinet.

During the coming Financial Year,  the following will be undertaken, among others:

(i) Implementation of the Uganda National Land Policy.

(ii) Implementation of the Land Information System in the initial six land offices of Kampala, Mukono, Jinja, Masaka, Wakiso and Mbarara.

(iii) Legislation for operationalization of  the Uganda Land Commission as a statutory body.

[tab:International issues]

Regional and International Matters

Madam Speaker and Honourable Members, Uganda has continued to enjoy excellent relations with her neighbours and has continued to play a constructive role on matters of regional and international peace and security.  Within the East African Community the following were achieved:

(i) Since July 2010, the East African Community has become the first common market in the whole of Africa, making it a big milestone.

(ii) In November last year, the East African Community Summit agreed to embark on negotiating the East African Community Monetary Union.  This process is now underway and is expected to culminate into an East African Community Monetary Union Protocol by 2012.

(iii) The East African Community has continued to place great emphasis on Food Security in the region and the need to address the impact of climate change.

(iv) Uganda continues to participate in the negotiations under the COMESA-EAC-SADC Tripartite Free Trade Area Agreement, to boost trade in the Eastern and Southern Africa region.

(v) The East African Community partner states concluded a Protocol on Foreign Policy Coordination, aimed at strengthening regional collaboration and harmonization  through multilateral diplomacy, economic and social activities, as well as in diplomatic and consular matters.

(vi) Uganda hosted both Regional and International conferences during the year under review. Most prominent among these were the International Criminal Court Review Conference in June, 2010 and the 2010 AU Ordinary Summit.

(vii) Madam Speaker, Uganda will strengthen our relationship with the new State of Southern Sudan in terms of both security and trade.

(viii) In recognition of the meaningful contribution Uganda is making in the area of maintenance of international peace and security, the United Nations decided to expand its operations at Entebbe

International Airport by establishing a Regional Service Centre for UN peace-support missions deployed in the Region.  With the establishment of this Centre, a number of peace support functions hitherto carried out elsewhere in the region such as in the Democratic Republic of Congo,  Burundi and Sudan are being relocated to Entebbe.   Uganda is consequently benefitting a lot from this development in terms of procurements, employment, investment and tourism opportunities.

All the foregoing possible developments have been achieved because of the peace and stability the country has continued to enjoy.  It is therefore incumbent on all of us, to ensure that we do not carry out any activity that would tarnish Uganda’s image, thereby sending wrong signals to the regional and international community.

[tab:Police & Prisons]

Justice, Law and Order

Madam Speaker and Honourable Members, I wish to reaffirm Government’s total commitment to  the promotion and maintenance of the rule of law and order.  In order to strengthen the rule of law and order, Government has undertaken to carry out a number of activities, whose outcomes I share with you below.

Government’s  strengthening of the Police  has seen a drop in the national crime rate.  A total of 19 District Police Stations, 34 blocks of residential accommodation, eight (8) Anti-Stock Theft Unit Zonal Offices, in addition to the Police Training School at Kabalye, were constructed during the year under review.

Within the Police, the following specialized units have been established:

(i) Very Important Persons Protection Unit (VIPPU);

(ii) Field Force Unit;

(iii) Environment Police;

(iv) Aviation Police;

(v) Land Protection Unit; and

(vi) Integrated Highway Patrol Unit.

The Uganda Police Force has adopted Community Policing as a pro-active approach aimed at prevention and detection of crimes  such as terrorism, murders, iron bar attacks and child kidnaps.  Every Ugandan is a  stakeholder in fighting crime. Therefore each one of us should cooperate with the Police in this endeavour.

In addition to the operationalization of Mbale Regional Forensic Laboratory, as well as the near-completion of Gulu Regional Laboratory, construction of the Mbarara Regional Forensic Laboratory will soon commence.

Case disposal in courts   Over the past year, out of the 25,077 cases filed in the Courts at all levels country-wide, 23,683 were disposed of.  The launch and implementation  of the pilot CASE BACKLOG QUICK WINS PROGRAMME has resulted into a drastic reduction in the average length of stay on remand from 27  months in 2009 to 15 months in 2010/11.    The ratio of convicts to remands has increased from 44.4% to 47% countrywide; and in some cases, like Luzira Upper Prison, there are more convicts than remands for the first time in 28 years.

In order to address the challenge of  staff numbers in the Judiciary, the following actions stand out, among others:

(a) appointment of 10 Judges;

(b) recruitment of 700 prison warders and 45 cadets now undergoing training; and

(c) recruitment of 5,000 Police  Constables and 500 Officer  Cadets now undergoing training.

These recruitments will improve the warder-prisoner ratio to 1:4 from 1:5 previously, and the Police-population ratio to 1:709 from 1:786 in the previous year.

The establishment of Duty Free Shops  in both the Uganda Police Force and the Uganda Prisons Service has and continues to improve the welfare of the staff, especially those who want to put up houses for themselves. From the prisons farms, Government was able to save Shs 2.4 billion on feeding prisoners.

Under the settlement of statutory obligations, by the end of this Financial Year, a total of  Shs 52.9 billion will be paid in respect of Court Awards, Uganda Human Rights Commission Awards and Compensation (Exgratia Awards).

[tab:Immigration]

Another significant achievement is to do with increased efficiency in the Immigration Department. The acquisition of a passport now takes ten working days compared to 30 days previously.

During the coming Financial Year, Government will continue to build on the successes so far registered with a view to improving further the capacity and professionalization of both the Uganda Police Force and the Uganda Prisons Service.

The recommendation of the Judiciary to Parliament to increase the number of Judges of the High Court from 50 to 82; those of the Court of Appeal from eight to 15 inclusive of the Deputy Chief Justice; and of the  Supreme Court from seven to 11, will be considered.

[tab:Peace & Security]

Peace and Security

Madam Speaker and Honourable Members, while peace and security have been maintained, the country was faced with two unfortunate incidents last year:  the burning of the Kasubi Royal Tombs and the 11^th July terrorist attack on people who were watching and enjoying the finals of the World Football Cup.  The burning of the Royal Tombs destroyed a very important national and international cultural site; while the heinous attack by the terrorists left 76 people dead and 116 injured.

Madam Speaker and Honourable Members, I request you to stand up and observe a minute of silence in  memory of all those who lost their lives during those attacks.  May the  Almighty God rest their souls in eternal peace.

Government offered a moderate contribution towards the burial expenses of those who died and those who underwent treatment in the various hospitals in and around Kampala.   The suspects who were apprehended in connection with the terrorist attacks will be subjected to the due process of the law.

Government, in consultation with the Mengo establishment, agreed to set up a Commission of Inquiry to investigate and probe the evil act of the burning of the Kasubi Tombs.  The Judicial Commission of Inquiry under the Chairmanship of Justice Stephen Engwau  completed its work and has already submitted its Report.  The Report is going to be thoroughly studied to enable Government to decide on the next course of action. It will also be made public in due course.   I would like to express gratitude to UNESCO for its support in rebuilding this world heritage site.

The Uganda People’s Defence Forces (UPDF) has been equipped to reasonable levels, to enhance its fighting, mobility and deployability capabilities.    Besides the fact that the UPDF is currently a bi-service

Force, comprising of Land and Air Forces, with a higher Defence Headquarters, other specialized elements namely, the Marines and the Special Forces, have been created.  It is also worth appreciating that for some time now, the UPDF has built capacity to help the Police deal with internal riots and national disasters.

Madam Speaker and Honourable Members, I would like to advise those championing  riots in the name of protesting against high fuel prices and other commodity prices to stop.  The ulterior motives behind those riots are already known by all the concerned agencies of Government.

Consequently, any riots will be handled firmly and decisively, basing on the provisions of Article 43 of the  Constitution on the enjoyment of  fundamental and other human rights and freedoms.

Madam Speaker, I am happy to inform this August House that apart from the continued support to peace and security, the UPDF in its Five- Year Development Plan, will renovate  and rehabilitate the dilapidated national railway network.

[tab:Corruption]

Corruption

Madam Speaker and Honourable  Members, the NRM Government’s commitment to zero-tolerance of corruption remains strong and resolute.

The legislation and institutions that  have been put in place to fight it underline this resolve. The following achievements in fighting corruption are brought to your attention.

The Leadership Code Act, 2002 has been amended.  The Amendment Bill, which also makes provision for an Independent Tribunal as spelt out in the Constitution, will soon be discussed by Cabinet.

The Whistleblowers Protection Act, aimed at protecting those who volunteer information in corruption cases, was enacted last year.  The outcome of this legislation has been a great encouragement to the public in the fight against corruption.

The Anti-Corruption Court has been doing very well in handling corruption cases expeditiously.

Corruption being rampant in the procurement processes, the Public Procurement and Disposal of Public Assets Act is under amendment with a view to plugging the loopholes which have been used by the corrupt.

In the forthcoming Financial Year, the following will be undertaken:

(i) Intensification of awareness of the  public so as to enable it to participate effectively in the fight against corruption.

(ii) Enactment of the Anti-Money Laundering Legislation.

(iii) Passing of the Proceeds of Crime Legislation, to empower Government to confiscate the assets of the corrupt.

(iv) I will constitute a Committee to investigate political leaders and senior public officers implicated in corruption-related scandals.

(v) The IGG, DPP and CID will conclude all the investigations related to CHOGM funds. Where evidence has been compiled, prosecution of the culprits will be undertaken expeditiously.

[tab:Parliament]

Madam Speaker, I now report on the Work of Parliament. As it may be recalled, the 5th

Session of the 8th Parliament was convened on 4th June 2010.  It ended on 13th

May 2011.  During that period, Parliament was able to transact business as follows:

(i) Bills passed …………………………………………………………..22

(ii) Motions for Resolutions………………….……………………………34

(iii) Sessional Committee Reports presented ………………………….. 13

(iv) Ministerial Statements presented and debated …………………. 23

(v) Other Statements presented ………………………………………….. 06

(vi) Papers presented ……………………………………..…………………42

(vii) Questions for Oral Answer responded to ………………….………13

(viii) Other Business ………………………… ………………………………..02

The Bills passed included, among others:

(a) The Regulation of Interception of Communications Bill,

(b) The Kampala Capital City Bill,

(c) The Electronic Signatures Bill,

(d) The Public Procurement and Disposal of Public Assets (Amendment) Bill,

(e) The Institution of Traditional or Cultural Leaders Bill,

(f) The Emoluments and Benefits of the President, Vice President and Prime Ministers’ Bill.

I thank the 8th Parliament for what it was  able to accomplish.  Since there are quite a number of Bills still pending, my request is that the Business Committee looks at them with a view to sorting out the most urgent ones for prompt handling.

[tab:Public Service]

The Public Service

Madam Speaker and Hon Members of Parliament, the people of Uganda expect, and are indeed entitled to,  the best service delivery from public servants who are paid from public coffers.

With our policy of decentralization, most of the service delivery is by local governments.  Presently, the total amount of money allocated to local governments through Central Government transfers stands at Shs 1.47 trillion, which is about 26% of the total National Budget.  Ministries and local leaders must ensure that there is enough guidance, supervision and inspection so that there is  value for every shilling sent to local governments.  Honourable Members  of Parliament should take keen interest in what is going on in their constituencies as far as service delivery is concerned.

I have already sent specific instructions to the Rt Hon Prime Minister aimed at putting in place measures  for improved service delivery.  Coupled with this is the ongoing review of  Ministerial Structures, aimed at not only rationalizing the present structures, but at plugging any loopholes that have been undermining service delivery.

Madam Speaker and Honourable Members, one of the outstanding achievements in this area, is the payment of the massive pension arrears. These arose from the revision of pensions, to make them more meaningful, following the currency reforms of the late 1980s. Pension arrears also arose from non-payment  of dues to Ugandans formerly employed by the then East African Community when it collapsed in 1977.   Whereas Kenya and Tanzania paid their nationals, Uganda did not.  All those pensions have now been paid. Another source of pension arrears was the non-payment of pensions and gratuities to members who retired from the former armies or the families of those who have passed away. Finally, pension arrears accumulated from non-payment of pensions to those who were employees of various local governments in the country. Paying such pensioners should rightly have been the responsibility of those local governments.  Government took over the responsibility in response to the  outcry of the people concerned whose strong belief is that they worked for Government. They pleaded that the technical distinction between Central Government and local governments should not jeopardize what they believed was genuinely due to them.

Having cleared the bulk of those pension arrears, Government continues to receive and deal with residual cases as they come.  I have decided to bring out all these facts, in order to dispel rumours that have been peddled around, especially by those  in the Opposition, that the NRM Government does not care about pensioners because it had refused or had stopped paying pensions.  How odd! Rather than being blamed, the National Resistance Movement Government should be commended, not only for revising the pensions which had been negatively affected by the currency reforms, but also for taking over all pension obligations left by previous governments.

Government is conscious of the concerns about the low salaries and wages paid to public servants.  In due course Government, through the Ministry of Public Service, will come up with a Revised Pay Reform Policy which should address all issues related to pay which, among others, include:

(i) attraction and retention of scarce skills;

ii) unjustifiable pay differentials among persons with the same skills and doing similar jobs; and

(iii) special allowances for those working in hard-to-reach,  hard-to-stay areas.

Government will finalize the establishment of a Contributory Pensions Scheme to replace the present one which is non-contributory.

Government will also decide on the appeal by local governments to make the payment of pensions to employees of local governments a responsibility of Central Government.

[tab:END]

Conclusion

As I conclude this year’s State of the Nation Address, Madam Speaker and Hon Members of Parliament, I wish to reiterate that on February 18^th 2011, Ugandans gave the National Resistance Movement the mandate to run the affairs of this country for another five years.    The NRM Election Manifesto, which is in consonance with what is spelt out in Uganda’s National Development Plan (2010/11 – 2014/15), is now the principal agreement between the NRM Government and the people of Uganda.   It will be translated into policies and programmes for implementation every financial year.

The National Resistance Movement, the vanguard in restoring constitutionalism, democracy and  peace in this country, shall not support any schemes, which some individuals or groups would like to design, to get to power outside the constitutional framework.

Let us remind ourselves of the following provisions of the Constitution:

(i) Article 3 (i) “It is prohibited for  any person or group of persons to take or retain control of the  Government of Uganda, except in accordance with the provisions of this Constitution.”

(ii) Article 3 (4) “All citizens of Uganda shall have the right and duty at all times – (a) to defend this Constitution and, in particular to resist any person or group of persons seeking to overthrow the established constitutional order …”

Every Ugandan should always be conscious of the fact that nobody owes us a living.  Madam Speaker and Honourable Members, every Ugandan has the responsibility to actively participate in the socio-economic transformation process of Uganda; an  irreversible process that the NRM has set in motion.

For God and My Country.

Thank you.

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The Parliament of The United Republic of Tanzania and the Chamber of Deputies of Rwanda already have female Speakers. This is a clear indication of transformation because considering that Uganda has never in its 49 years of independence had a female Speaker.

This transformation has partially been expedited by the NRM Government ably led by President Yoweri Museveni, global impetus spearheading advocacy for women’s rights; and most significantly increased access to education which has opened doors at all levels for women. Education and globalisation apart, character and attitude play a significant role.

Kadaga is an extremely intelligent, hard -working and tenacious person who has worked tirelessly for justice and equal opportunities for all. This placed at the right place, at the right time. Her tenure, like that of the other East African female speakers will no doubt change the politics of the region in unprecedented ways.

The unique advantage of women’s participation in politics has many attributes, some of these include the fact that women bring to the fore practical issues such as food, shelter, clothing and the well-being of the family.

Women also bring to the fore issues unique to them as a group such as infant and maternal health, cervical and breast cancer. They bring natural attributes as nurturers which include patience, perseverance and courage to name but a few.

Dora Byamukama

At the East African Community level, the East African Legislative Assembly is currently in the process of debating the EAC Annual Budget Estimates for the Financial Year 2011/2012.

The theme of this year’s budget is: Implementation of the Common Market and laying the foundation for the Monetary Union. The year 2011/2012 will be a momentous one as the Community implements the Common Market and energises the process of establishment of an East African Monetary Union. The Budget Speech presented to the Assembly on May 19, 2011 recognised that: “the Gross Domestic Product of the region has increased from $46.5b to $74.5b over the period 2005 to 2009 while per capita income has gone from $402 to $571 over the same period.

This is great news considering that next phase of integration, which is the Monetary Union, will enable the East African Community to increase intra-regional trade since we shall all be using one monetary system.

It means that increasing per capita income from $571 to $1,000 will take an even shorter period and thus has capacity to spiral the East African Community into a middle income region in record time.

The Assembly approved a Budget of $77, 664,443 for the Financial Year 2010/2011. The Council this year requests for the approval of $109,680,319 for the Financial Year 2011/2012. This marked increase of over 41% which reflects the fact that with the deepening and widening of the integration process, more and more resources need to be committed to the EAC Budget.

One of the issues of concern is that out of the $109,680,319 for which approval is sought, $ 33,666, 700 will be contributed by Partner States while $75,307,769 will be contributed by Development Partners and other income amounting to $205,850.

This obviously means that our Development Partners are putting in almost twice as much into the EAC than the Partner States and yet all Partner States acknowledge that integration is a top priority in the development of the region. This state of affairs calls for more coordinated and consistent action. Whereas the contribution of Development Partners is appreciated, it is imperative for EAC Partner States to prioritise funding for the EAC integration in their respective budgets.

This calls for increase of contribution to the EAC Budget and more significantly for the EAC to expedite the process of establishing sustainable ways of financing the integration process such as taxing revenue. The fact that all the EAC Partner States have enjoyed benefits accruing from the operations of the Community and that so far, no economic imbalances have arisen out the integration process re-affirms the need for heightened commitment to integration.

In addition to this, the fact that all programs to be financed in the Financial Year 2011/2012 will result into increased revenue for the Community justifies more consistent support from Partner States. Priority programs that the EAC will focus on in 2011/2012 are:

• Implementation of the Common Market Protocol;
• Conclusion of the EAC Monetary Union Protocol;
• Deepening Cooperation in Defense, Security and Political matters;
• Implementation of EAC Institutional Review Recommendations;
• Promotion of Agriculture and Food Security and Implementation of Climate Change Action Plan;
• Promotion of regional multilateral trade;
• Expansion of regional Infrastructural facilities;
• Implementation of EAC Industrialisation;
• Investment promotion and Private Sector Development Strategies;
• Promotion of sustainable use of Environment and Natural Resources, Tourism and Wildlife Conservation;

·  Enhancing EAC visibility and operationalisation of the EAC Development Fund.

One of the operational principles of the Community that govern the practical achievement of the objectives of the Community is – the EAC integration process must be people centered and market driven co-operation.

Each of us has a role to play right from the farmer who yearns to sell potatoes cassava across the boarder of Katuna and Gatuna right up to those who transact business via the Securities Exchange. Increased support of EAC integration will no doubt transform the EAC region into a middle income. This will in turn address political, economic and social challenges such as poverty, poor health, and conflict over scarce resources; more effectively.

By By Dora Byamukama, Uganda’s reprehensive in the East African Legislative Assembly

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A Lecturer at Makerere University, Prof Augustus Nuwagaba has criticized the government for always making what he called highly theoretical budgets.

Prof. Augustus Nuwagaba

This comes hardly a month after the reading of the National Budget of Uganda for the financial year 2010/2011 by Finance Minister Syda Bbumba, which though revealed that Uganda’s economic growth had continued to improve steadily to over 8%.

Nuwagaba has told journalists in Kampala that the budgets read by the Uganda government are mere documents that do not reflect the true picture of what is happening on the ground in Uganda.

He says many times the yardstick of economic growth used by the government in budgets to measure the economic status of Uganda is not a good measure because in determining economic growth little attention is paid to the standards of living of most Ugandans.

The professor says what is important to the people of Ugandans is their standard of living and that is why the public can never appreciates when the government talks of the economy of Uganda as improving steadily.

Nuwagaba says that despite the government’s claims of Uganda’s economy growing every year, the people of Uganda fail to see any tangible improvements in their standards of living.

See other Uganda budget related stories

By Zacharia Tiberindwa, Ultimate Media

The post Makerere’s Augustus Nuwagaba says Uganda 2010/2011 budget theoretical first appeared on Uganda Multimedia News & Information.

The Ministry of Tourism, Trade and Industry has today defended Uganda National Bureau of Standard’s proposal to levy a pre import tax on goods coming into Uganda from USA, UK, Canada and China among other countries.

Fr. Simon Lokodo

In September last year, the Uganda National Bureau of Stands introduced the new tax scheme that requires importers to have all their goods inspected from their countries of origin to rid the Ugandan market of counterfeit products.

This was however angrily protested against by the members of business community in Uganda who claim they had been left in the planning process.

During the budget speech for 2010/2011, Finance Minister, Syda Bbumba revealed that the tax would be stayed pending consultation with different stakeholders.

However, the Trade minister, Fr. Simon Lokodo says that the tax should stay in a move to protect Ugandan consumers against counterfeits or substandard goods.

Ultimate Media

The post Uganda National Bureau of Standards backed to levy pre import tax first appeared on Uganda Multimedia News & Information.

MP Dennis Obua

The Uganda Minister of Finance, Planning and Economic development, Hon. Syda Bumba while reading the Uganda 2010/11 Uganda budget at Kampala Serena Hotel indicated that government has allocated money to fund school leavers to help in training and provide capital to start businesses.

The minister indicated that the government has already allocated 4 billion Uganda shillings for the loan scheme to graduates and Uganda shillings 2 billion to pay companies train graduates.

Bbumba said the fund to be managed by Uganda Directorate of industrial training will also help graduates set up businesses and train graduates to prepare them for job market.

Obua says the initiative is a good way to help Uganda youth become self reliant since it will help them get through the job market and promote the culture of entrepreneurship.

According to a 2008 World Bank report, Uganda has the highest youth unemployment rate and the youngest population in the world.

Ultimate Media

More on the Uganda 2010/2011 Budget Speech delivered by Finance Minister Syda Bbumba

The post Uganda youth MP hails government on 2010/11 budget first appeared on Uganda Multimedia News & Information.

Hussein Kyanjo MP Makindye West

Members of Parliament have expressed mixed reactions over the budget read by the Minister of Finance Planning and Economic Development Syda Bbumba with other viewing it as a substantially well thought out budget while other viewed it as one failed to address certain fundamental concerns of Uganda.

Bbumba has just read the budget which reveals that Uganda’s dependence continues to go down as this years Uganda will finance 75% of its budget.

Hardly two years ago, Uganda had a budget where it depended on donors to finance almost half its budget.

The Member of Parliament for Erute South, John Odit says the budget was read but he nothing said on addressing the challenge of corruption yet it continues to be one of the aspects the challenges that require immediate attention of the government.

The MP for Makindye West Hussein Kyanjo says he is happy this budget has more money allocated to the agricultural sector and increases salaries of teachers which he says is a positive aspect about this budget.

The State Minister for Primary Health, James Kakooza says what delighted him about this budget is the fact that Uganda will be able to fund 75% of its budget which is good for the country.

See full budget speech

By Zacharia Tiberindwa Ultimate Media

The post Members of Parliament express mixed reactions over Uganda 2010/2011 budget first appeared on Uganda Multimedia News & Information.

Uganda National Budget case

In the budget which the Minister of Finance, Planning and Economic Development, Syda Bbumba, under the theme “Strategic priorities to accelerate prosperity for all” Uganda will have an expenditure of over 77 trillion shillings which expenditure will largely be funded by Uganda’s own generated income.

The Syda Bbumba has told delegates that attended the budget speech at Serena Hotel that the key priority areas of next year’s budget will include the infrastructural development, enhancement of Information, communication and technology sector, improvement of agricultural production and private sector development.

Bbumba says next year the government will establish an industrial training fund for the youths and over 2 billion shillings has been put in this fund as one of the ways of addressing the looming unemployment problem amongst the youths in Uganda.

Bbumba says this budget is the first to directly address the concern of  the youths, so they should see this as a unique opportunity and use it to get themselves out of unemployment and poverty.

The President of Uganda Yoweri Kaguta Museveni says he is delighted over the establishment of this fund because it will give the unemployed youths with entrepreneur skills to begin projects borrow from the fund at a very low interest rate of only 5% to begin such projects that they may wish to begin.

By Ultimate Media

The post Uganda to fund 75% of its budget in 2010/2011 first appeared on Uganda Multimedia News & Information.