FULL STATEMENT: President Museveni speaks out on foreign aid and loans 

Statement

by

H.E. Yoweri Kaguta Museveni Tibuhaburwa

PRESIDENT OF THE REPUBLIC OF UGANDA

on 

FOREIGN AID AND LOANS

“They left undone what they ought to have done and did that, they ought not to have done and there is no truth in them.” The Book of Common Prayer 1662

at

STATE HOUSE – ENTEBBE

17th August, 2023

Ugandans and, especially the Bazukulu.

Further to my message of the 9th August, 2023, I would like to reiterate that foreign aid and loans are welcome and can be of some use if designed and executed by patriots (not neo-colonial agents), but are neither decisive nor indispensable elements for our desired social-economic transformation. On the contrary, those loans and aid packages, can be a source of distortion and stunted growth as you can see across Africa. If foreign aid and loans, are a source of social-economic transformation, why the present growing crisis of even security and stability in Africa? Look at Guinnea-Conakry, Mali, Burkina-Faso, Niger, Central African Republic, DRC, Boko Haram in Nigeria, Somalia, Mozambique, etc. Most of these Countries, have been getting those grants and loans.

Many of the loans and aid packages, are either of no value addition to the Country or are even anti-growth, all together. In the Ministry of Agriculture, Animal Industry and Fisheries, for instance, we discovered that a total of USD 800million had been borrowed over a period of ten years, but that Ministry did not have zonal diagnostic labs and Research centres, did not repair the mechanization centres and did not buy the mechanization equipment like combine harvesters or even tractors, no irrigation equipment for farmers, no value addition equipment, etc. Much of that money was spent on seminars etc.; yet, those are the basic requirements of that Ministry, if it is to assist in the struggle for Social- economic transformation. Therefore, most of the borrowing, has been having no value addition to our transformation journey. Besides, in some cases, the aid policies are directly against growth. Uganda has been manufacturing ARVs and other medical drugs at our Quality Chemicals factory in Kampala – Luzira. The Aid givers from abroad, for a long time, were not allowing us to use their money to buy the Ugandan manufactured drugs. To qualify for aid, we had to forget our own industrialization and jobs creation for our People and support, with our Kujanjabisa (getting treatment), the jobs creation for other people.

Who, then, permits the signing of such distortion causing agreements to our economy? It is the neo-colonial lobby in the Country behind my back. That is why, on the 19th of June, 2017, I wrote a directive forbidding the contracting of more loans without my express approval. The letter is quoted in full below:

Ever since the victory of the NRM Revolution in 1986, it has, therefore, been the struggle between the two lines Mao Tse-tung talked about － the struggle between the line of social-economic transformation and national Independence and the line of perpetual dependence and neo-colonialism. Africans as a whole and even the African revolutionaries like ourselves, are forgiving people. In the case of Uganda, ever since our student days, we have been ready to forgive the past crimes against Africa by the Imperialists and their local stooges – the slave trade, the colonialism, the massacres, the killing of Patrice Lumumba in Congo, the genocides in different African Countries, the mass killings in Uganda by Idi Amin and other mistake makers, supported by imperialism, etc. Unlike the American Red- Indians, on account of their strong agricultural economy and culture, the Africans survived and defeated colonialism- the last to be defeated being the South African White racists in 1994.

However, the only appropriate English adjective I can remember from my 14 years study of the English language (1952-1966), is: “insufferable”, that can describe some of these actors. Some of these imperialist actors, are insufferable. You have to work hard, to restrain yourself from exploding with anger. They are so shallow, they do not know when and where to stop. It is this shallowness in philosophy, ideology and strategy, that interferes with the global efforts to generate consensus for the good and even for the salvation of mankind from possible environmental and other man-made catastrophes. Hence, the recent provocation and arrogance by the World Bank Group on a subject of the homosexuals that we have so patiently discussed with so many of those elements. To dare think that the Ugandans, the brothers, the sisters and grandchildren of the Christian religious Martyrs of 1884 against our own tyrannical Kings, the Martyrs of the Luwero War (the 9th of June-Heroes), can be intimidated by the threat of withdrawal of loans and aid, that are, moreover, peripheral to our transformation efforts, is the epitome of mistake-making, to say the least.

It is, therefore, important for the Ugandans to know the state of the transformation journey and what elements are crucial for it. There are five strategic factors that are crucial for our unstoppable journey of social-economic transformation. These are:

1. The patriotic Ugandans rallied around the 4 principles of the NRM－Patriotism, Pan-Africanism, Social-economic transformation and democracy, that have been giving the NRM win on the first round ever since 1989, when indirect and direct elections, were re-introduced in Uganda;
2. A Powerful People’s Army, that led the armed resistance from 1971-1986 and has guaranteed peace in Uganda against all and sundry, ever since;
3. The Private Sector of the Ugandan farmers, the manufacturers (indegenous and expatriate), the investors in the Services Sector, the investors in the ICT － all now re-inforced by our Scientists that are bursting with innovations in all areas-  e-mobility, ICT, Pathogen economy, etc;
4. The core infrastructure such as some of the roads, the electricity, the railway, the piped water, the ICT backbone, the social infrastructure – education and health- that develops the capacity of the human resource and also lowers the costs of doing business in the economy to improve the profitability of the private and public sector enterprises, involved in money making;
5. The market to buy the goods and services produced in the economy by the private sector and also the profit-oriented parastatals, that includes the internal market of 46million Ugandans, the 300million EAC members, the 643 million COMESA citizens  and the 1.5billion Africans; we also have the market arrangements with the USA (AGOA), with the EU(EBA), with China, the Middle East, India, Russia, Japan, etc.

These are the five factors that have enabled the economy of Uganda to grow from USD1.5billion to USD55billion by the end of this financial year, or $156.954 by the PPP method. It is these factors, that we are using through aggressive value-addition, full monetization of the economy, expanding the services sector and building the knowledge economy, to qualitatively catapult our economy to the size of USD550billion, in the next few years.

Most of these factors, have been independently worked on by the Ugandan Revolution in the last 63years- ever since 1960 － the Student Movement, the Armed resistance (1971-86) and causing the recovery of the Ugandan economy ever since. 

You can audit each factor and see who did what: the unity politics Vs the sectarianism of the reactionaries; a strong Army; the growth of the private sector-liberalization, privatization, the return of the Indians, the support to our scientists, etc; the building of the infrastructure – the roads, the railway, electricity, social infrastructure, etc; and market integration in Africa.

It is in the area of some elements of infrastructure- roads and social infrastructure (schools and health Centres), that the World Bank and some of the Western partners, contribute with a lot of conditionalities, frivolity, erraticness and paternalism, as if they are dealing with kindergarten goers. One time, one group said they were going to reconstruct Masaka- Mbarara etc., road, but not the Kampala-Masaka-portion!! When I was told, my reaction was: “Etajugirwe nyoko, kwobona ekireengye, oti nariire”-(A cow that is not part of your Mother’s bride price, even if they give you its hoof, you congratulate yourself as having had a good meal.” We used Uganda Government money, to do that portion － Shs.440billion. Another actor, abandoned doing Kampala- Mityana portion at the last minute  (kokonyo, kunegura), an act that is very offensive among the communities of this area. We did it with Uganda Government money. Some group was funding Kamwengye –  Fort-Portal road and the work was being done by a Chinese Company and a Chinese man slept with a local girl in some circumstances. The project was stopped !! We funded it and the road was finished. If you really want the country to under-go transformation, you must support the lowering of the costs of electricity, transport (the railway and water transport) and the cost of money in banks for the private sector and commercial operators to have good profits. 

Baroness Lynda Chalker helped me with Nalubaale and I saluted her. The Chinese have helped us with Isimba, Karuma and they had offered to help with the Standard Gauge Railway. It is these areas that can quickly help to transform the economy. We salute the World Bank and some other actors for supporting the social infrastructure (health and education), inspite of the erraticness and frivolity. However, there is  a fundamental disequilibrium here. If you support the social sectors, but you do not support the railway, the electricity and the cost of borrowing, how will money making enterprises grow? If the money-making enterprises (factories, hotels, etc.), do not grow, who will employ the school leavers? Hence, the problem of unemployed graduates. That is why the Uganda Government, creates funds like the Youth Fund, the Women Fund, the emyooga, the PDM, funding UDB, the Innovation Fund etc. 

Therefore, all along, we move with some partners even when we are not fully aligned on the basis of: “Entajugirwe nyoko, kwobona ekirengye, oti nariire” － “a hoof of a cow that is not your Mother’s bride price  is good enough.” In any case, it is us to develop our country and that is why most of the 5factors have been put in place by us. “Enyongyeserezo, teba mbi” – “Any addition to what you have, is not bad.”

Therefore, the World Bank and other external actors, have no capacity to interrupt our transformation journey. It is actually the internal weaknesses, that delay our forward march and that must and will be crushed. The internal weaknesses are two: the neo-colonial misplanners that have been historically manning the civil service and also present in the political class on account of the neo-colonial social sciences taught in the educational system; and the corrupt parasites in the same groups that delay the operations of the private sector or demand bribes from them. The mis-planners who see no problem with Africa, Uganda included, only producing raw materials. Yet, in Economics, we used to learn about the concept of Opportunity Cost – meaning what you lose by not doing or doing something. What is the opportunity cost of Africa only producing raw-materials? This is why the performance of Africa economies, is miserable. 

Here below, are the economies of some of the countries compared to that of the massive continent of ours:

United States of America – $26.9 trillion

China – $19.4 trillion

Japan – $4.4   trillion

Germany – $4.3   trillion

India – 3.7     trillion

Africa – 2.9     trillion                               (source IMF 2023)

This is big shame and the cause of the chaos in Africa: wars, hunger, African children dying in the Mediterranean Sea, our children going for kyeyo jobs etc. In the case of Uganda, we rejected this formula from the student days of our Movement, but we have been having the internal opposition from the two groups and we also started from a very low base.  Nevertheless, using a realistic approach, we have been co-operating with the neo-colonial actors within our Public Service while, at the same time, using the growing capacity of Uganda’s economy in promoting our own  patriotic agenda and we have succeeded in the following sectors:

1. Fisheries – 12 factories, they had  gone up to 22 but bad fishing undermined some;
2. The Maize sector – 5 million tonnes from 500,000 in 1986;
3. Cotton – 2 factories, processing 20million metres of fabric per annum.
4. Milk – 5.4billion litres per annum from 200million in 1986 and 145 factories.
5. Tea –     23 factories processing 82 million kgs                             of tea per annum;
6. Coffee –     8million, 60kgs from 2million;
7. Cement – 6  factories, processing 4.6 million tonnes;
8. Steel – 19 factories processing MT510,700tonnes per year from scrap -now going for vertical integration with our iron ore (obutare) to produce fresh steel;
9. Ceramics factories – 2 factories; 
10. Commercial explosive factories;
11. Wood products factories – furniture, ceiling boards, etc.;
12. Military Industries;
13. Pharmaceutical industries;
14. Gold refinery; etc, etc.

Then, food production supported by our Research Institutions for seeds development and development of breeding materials. That is why our inflation is now 3.9% inspite of the global turbulence. If you now scrutinize carefully, you will find that these success areas and the ones I have not listed, are, mainly, on account of the other 5factors of growth and transformation promotion, that I have mentioned above that are, mainly, endogenous and not exogenous. Therefore, the illusion that external aid can cause or prevent social economic transformation, is, indeed an illusion. 

The Bretton Woods aligned Ugandans (Mutebile, Muhakanizi, etc.), somehow contributed to our recovery by emphasizing the use of market forces such as liberalizing the foreign exchange rate to find its own level instead of the mistake of the Bank of Uganda arbitrarily fixing the rate, allowing prices for consumer and producer goods to rise and fall according to the laws of demand and supply instead of the Government fixing prices or using subsidies, etc. 

These free market stimuli, brought discipline and realism to the small enclave colonial economy of the 3Cs and 3Ts (Coffee, Cotton, Copper and Tourism, Tea, Tobacco) of 1962 that, moreover, Idi Amin had destroyed. These free-market stimuli, help those who are already in the money economy to act realistically. It does not, however, address the three big strategic bottlenecks that confront under- developed economies. These are: confining one selves to producing only raw materials and being import agents of foreign products; neglecting the crucial economic infrastructure that could lower costs in the economy by not building the railway and electricity and only partially and with a lot of frivolity working on  the social infrastructure (health and education); and ignoring the huge populations that were in the non-money economy (68% by 2013) that are not aware and cannot respond to the market forces stimuli. When I was commercializing the fish sector, I had no support from the system. When I was mobilizing the traditional pastoralists in the Cattle Corridor into the Commercial Dairy Industry, the system was either indifferent or even hostile to my efforts. 

The Hon. Victoria Ssekitoleko, helped me with the maize. With the banana flour, the vaccines, etc., I am always in fights with the neo-colonial system. I first saw Prof. Muranga’s banana innovation at Lugogo show ground in 1997. It is only recently, that I have been able to force the powers that –be, to fully and, finally, fund that project. How about my battle for the value addition for Coffee? See my letter to Hon. Mayanja Nkangi on the value addition to our produce dated 12th November, 1997 on this issue.

Our innovation and wealth creation funds, have been from our money. I do not remember any external funding for them. The market stimuli our Bretton Woods group rely on so much and erroneously, are known as “macro-economic stabilization”. They also exaggerate and refer to that formula as “structural adjustment”. There is nothing automatically “structural”  in that macro – economic stabilization. You can actually become stagnant and, eventually, decline and collapse as so many clients of this formula have done in Africa. This is where the NRM firm philosophical, ideological and strategic position, saved Uganda. We said: “yes, macro – economic stabilization is useful provided you also work on the qualitative leap from raw – materials to finished goods and you also use mobilization to get the by – standers of the traditional, non – money economy, into the money economy.”

That is why Uganda under the NRM is an unsinkable ship in the stormy global sea of the World economy. It may be useful to remember the words of Dr. Mutharika, himself a former worker of some of those international bodies, when he became President of Malawi. 

He said that he wanted “a Malawi economic plan supported by the World Bank” and not “a World Bank programme for Malawi”. The Ugandans should not waste time on it. Instead, we should launch a merciless war on the two internal inhibitors of our own: the corrupt and the neo-colonial planners. It is high time,  the two got off the scene completely. They have delayed us enough.

Finally, the provocations by the World Bank and the thought － less homo-sexual lobby, should not provoke us into being, automatically, anti-Western. Even in the colonial times, we had supporters in the west in our anti-colonial struggle: Sir Dingle Foot,  Lord Fenner Brockway, Olof Palme, etc. Even today, there are many friendly forces in the West, but they are intimidated by these  disoriented lobbies. Our firm resistance to the wrong doers, assists them. Our Western partners, however, should also know that the reckless actions by some of these elements, could interfere with the fundamental interests of the citizens of the World in, for instance, fighting against terrorism and chauvinisms of different types (religious,etc.). We have been co-operating in fighting terrorists in Somalia, Eastern Congo, on the Sudan border in the past, etc.