State of the Nation Address: Why economy will be priority

ECONOMY

KAMPALA - When President Yoweri Museveni delivers the State of the Nation address on Thursday, all eyes will be on the economy. Unlike last year's, which focused mainly on security, this time almost everyone expects a grand pronouncement on the economy, especially the long-awaited stimulus package and how the country plans to move past the effects of COVID-19.

In his executive preview of events shaping the nation's trajectory last year, mandated by Article 101(1) of the Constitution, Museveni's accountability to the nation was largely saddled with the insecurity question.

The address came against a backdrop of the assassinations of former Buyende district Police commander Muhammad Kirumira, Arua Municipality MP Ibrahim Abiriga, among others.

Museveni had said before the State of the Nation address, that the crimes were largely political, pledging a raft of measures to curb them, including the procurement of closed-circuit television (CCTV) cameras to monitor the security gaps. He promised that the criminals would be defeated.

As he addresses the country on Thursday, the crime rate is low and the Police has attributed it to the curfew that Museveni rolled out as one of the measures to curb the spread of COVID-19.

Museveni's address also came at a time when Rwanda-Uganda tensions were in high gear, with the closure of the Katuna/Gatuna border crossing by the Rwandan authorities in February, 2019, one of the key highlights.

The tensions have largely fizzled out, given the intense backdoor talks between Museveni and his Rwandan counterpart, Paul Kagame, under the chairmanship of Angola's leadership.

The preparedness for the 2021 general elections will also be top of the agenda as the President clarifies on fears that the fate of the polls is largely in the hands of the scientists who shall decide whether the social distancing rules will enable the country go to the polls.
The Electoral Commission (EC) has already released bids for ballot box printing, saying the general election roadmap remains on course despite a few disruptions of the programme because of the coronavirus.

Some leaders of the NRM parliamentary caucus yesterday said the pandemic had actually reversed some of the Government's achievements vis-a-vis the promises Museveni highlighted during last year's address.

"The past two months have been bad. As a leader of the parliamentary caucus, we expect him to provide a path for the recovery of the economy and how we are going to prepare for elections in the face of the coronavirus," Bukooli Central MP, who is also the vice-chairperson of the NRM parliamentary caucus, Solomon Silwany, said, underscoring the fact that on security, the promises Museveni made last year have been largely fulfilled.

Last year, the economy was the second issue Museveni addressed. At the time, he looked at the past in order to predict the future of the economy.

"Between 1986 and 2015, the economy grew at an annual average rate of 6.92% while per capita income grew at an annual average rate of 3.6% over the same period. No European country, not even the US (except West Germany between 1950 and 1980 which did 3.8%) has grown its per capita income at the same rate as Uganda over a period of three decades.

"Only the East Asian Tigers sustained per capita income growth of 5.6% during their intense period of transformation between 1960 and 1990," he said.

Last year, the President said, the size of the economy had grown to sh109.7 trillion, the equivalent of about $29.5b.

"The income per person is now equivalent to $800. Although this is below the level required for the attainment of middle-income status, the renewed impetus of the economy and the large economic base being created will catapult the economy to prosperity within a short period in the future," Museveni said.

He explained that the Government would drive the expansion of the economic base through industrialisation, increased agricultural productivity, commencement of oil production, strengthening local content (Parliament recently passed the Local Content Act), harnessing regional integration benefits and the improvement of public investments and labour productivity in the next financial year.

According to previous presidential addresses on the impact of COVID-19, Museveni has insisted that the economy will boom, although some sectors such as tourism have been hard hit.

A recent report by the Uganda Revenue Authority on the impact of COVID-19 on tax collection indicated a 60% drop in revenue collections.

So, on Thursday, the President is expected to unveil a stimulus package for tourism and other sectors that are clutching at straws thanks to the coronavirus.

Museveni last year, said domestic revenue collections amounted to sh15.5 trillion. As he addresses the country, the revenue projections could be far from being realised.

On agriculture, Museveni last year, said irrigation and fertilisation would be the major focus of the Government as the country tries to secure agro-processing production to add value to produce and expand the marketing chain through the East African Community integration, the general African market and Europe/America.

He also pledged, among others, the procurement of over 100 tractors to mechanise agriculture.

The coronavirus pandemic has equally dampened exports and, therefore, hurt the market for farmers. There is no doubt this is also likely to be a focus of his address.