Analysis: Museveni State of Nation Speech Must Address Economy


view geneva;”>While Bank of Uganda governor Emmanuel Tumusiime Mutebile contends the output gap has narrowed, in part boosted by the reduction in the Commercial bank lending rates from 23 percent in February 2012 to an average of 12 for the better part of 2013 and also assured the “underlying economic momentum is expected to remain positive over the medium term,” businesses continue to grapple with high interest rates on bank loans.

Recently, Mutebile confessed that “a lot of loans are going bad because of high interest rates.”

And despite insisting that “there are now signs that economic growth has picked up slightly and will continue to do so in 2013,” Mutebile confirmed the Central Bank had “found out that 4.2 percent of loans have been declared bad.”

He quickly adds “the situation isn’t as bad as some would have us believe.”

Mutebile said the “recovery of shilling-based commercial loans remains muted and there was no significant change in the lending situation.”

Before Parliament today, Museveni is also expected to address the thorny issues such as deeply entrenched corruption, regional integration and clashes between the executive and the media.


The President has been conspicuously silent on the recent closure of Red Pepper and Daily Monitor and its sister radio stations, a move that was hugely condemned by majority Ugandans, international community, donors and foreign media.

The media houses lost billions of shillings in advertising revenue during the closure.

Observers say the closure of media houses following the publication of Coordinator of Intelligence Organs, Gen David Tinyefuza’s controversial letter should not have come as a surprise considering that the President had earlier threatened to “show them.”

During the 2012 State of the Nation Address, Museveni said: “The media is also another corrupt, irresponsible and unprofessional group. Some of my supporters have been asking me for money to bribe characters that are called DJs so as to get favourable coverage in the media. I told my supporters that I would never give them that money. It is the duty of every Media House (radio, TV or news paper) to ensure that they give balanced and objective coverage of any story. It is an obligation on them and not a favour to the public.”

He added: “Any Media House that does not do it will lose out. I will show you how if they continue. We do not have to bribe anybody. The power of licensing belongs to the State. The State of Uganda has got a historical mission: Nationalism, Pan-Africanism, Socio-economic transformation and Democracy. It is the duty of every Media House to further these aims. I hope they will listen to my advice.”


In the same address, Museveni said the country is peaceful. “The UPDF is much stronger than ever before. There are only a few gaps in our overall defence, which will be closed in the coming years’ budgets,” he noted.

However, Tinyefuza’s letter in which he called for an investigation into reports that some officers were targeted for assassination and the wrangling between Police boss Gen Kale Kayihura and the exiled Coordinator of Intelligence organs, has exposed the army leadership as incoherent.

During the recent decoration ceremony of promoted army officers, State Minister for Defence, Jeje Odongo, warned army bosses against intrigue.

“Pulling down colleagues won’t make you succeed. It is temporary. Time will come when you will fall and this is dangerous for the institution you work for.”

He also admitted that UPDF was facing “significant challenges,” adding, “We should not hide our heads in the sand like the proverbial ostrich. The new leadership should spare no effort to address these challenges.”

Gen Elly Tumwiine warned that bickering army officers were not only a threat to the survival of the UPDF institution but also a betrayal to “our departed comrades who shed blood to liberate this country.”

“As we celebrate what we are today, we are standing on the shoulders of our late comrades. Success will take care of itself if we are moving forward together. Better is good but best is better,” said Tumwiine.


With a relatively stable country, Museveni should now elaborate on steps being taken in stamping out corruption in government.

He promised in his last address that he would reserve enough time to present a paper before Parliament on how he has been dealing with graft.

Museveni will further give an insight on government’s priorities and planned expenditures for the financial year 2013/2014.

Morrison Rwakakamba, Chief Executive Officer, Agency for Transformation, says government should allocate more funds to the agricultural sector.

“The agriculture sector remains among the lowest ranked sectors in the national budget. Agriculture sector has not received more than 5 percent share of the national budget since 2009/10,” says Rwakakamba.

The total budget allocation for the agriculture sector for Financial Year 2012/13 was Shs 379.04 billion which is 3.5 percent of the total national budget.

The 2013/2014 projection is 3.2 percent – even if we stretch to the total direct and indirect allocation to the sector, the total allocation will not exceed 5 percent of the total national budget.

“Either way, the allocation to the sector is way below the Maputo / Comprehensive Africa Agriculture Development Program (CAADP) declaration (target) of at least 10% of the national budget- that Uganda committed to implement,” says Rwakakamba.

“Due to low funding, the agriculture sector is facing challenges, among them are: lack of implementation of the Shs 1.4 trillion national action plan on poverty reduction and enterprise selection; recruitment of staff at district Local governments; lack of non-wage budget to implement the MAAIF structure at headquarters; failure to provide water for agriculture production facilities; lack of continuous funding for technology development; and inability to fund 100 farmers per parish under NAADS and evident struggle to manage devastating wilts like banana bacterial wilt and coffee wilt.”


Museveni is also expected to expound on government’s new strategy that will see the gradual phasing out of National Agriculture Advisory Services (NAADS) programme.

According to Finance Minister, Maria Kiwanuka, under the agricultural sector, the budget for the financial year 2013/14, will focus on “re-prioritizing the available resources to accelerate the implementation of the Commodity Based Approach placing emphasis on 10 key identified commodities that are strategic for household food security and income generation.”

Presenting the National Budget Framework Paper for the 2013/14 financial year before Parliament recently, Kiwanuka noted: “In order to address the challenges encountered in the implementation of the National Agricultural Advisory Services (NAADS), Government has taken a decision to create a Single Spine Extension system to properly link all the agricultural sector functions.”

President Yoweri Museveni recently said government is considering dissolving NAADS since it has not lived to its expectation.


In his speech today, Museveni will move to allay fears that government is indifferent about the civil servants plight by promising a salary increment in the not-too-distant future.

According to the 2013/2014 budget estimates, teachers, doctors, UPDF personnel and other lower cadre Civil Servants will not get a salary increment as they had demanded.

To meet the demands of the civil servants, Kiwanuka needs Shs365bn.

Kiwanuka maintains the “critical requirements have remained unfunded in the financial year due to lack of resources.”

In the 2012 State of the Nation Address, Museveni demanded that in the meantime, “the clamour for more pay and allowances by public servants and political leaders must stop so that we concentrate on the roads and power. The only public servants that deserve pay rise are the scientists because they contribute decisively to the economy and their contribution is unique. It is not easy to replicate.”

He further observed: “The promise we had made to the teachers and other public servants of 250 billion will go ahead for at least this Financial Year. I feel very bad to see this 6,169 billion shillings we have succeeded in generating being used in a manner that does not build a higher threshold for our economy.”

“Once we build a road, it will be there for 20 years. Salaries are monthly. Increment of salaries should wait until we have dealt with infrastructure or until our oil and gas are operational so that we can use the proceedings to fund infrastructure. Then, we can start moving again on wages,” said the President.

He acknowledged that “salaries are also a challenge to the families of public servants,” but quickly added, “Uganda, however, is not like Europe.”

“Many of the public servants have land at home and can grow food to supplement the yet small salaries until the situation improves. When we build the base of our economy, we shall all be better off. “


The President is hugely expected to address the blood shortage in the country, which has put lives of thousands, especially in emergency cases such as road accidents, at risk.

The Ministry of Health has admitted that there is a shortage of blood throughout the country and regretted the situation.

Primary Health Care State Minister, Sarah Opendi noted that the shortage was caused by the interruptions in the supply of the kits and other testing reagents.


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