Museveni opens Kampala Serena Hotel, pledges faster growth
President Yoweri Museveni and the Ismailia Islamic sect leader, His Highness the Aga Khan, on Friday opened the newly-rebuilt Kampala Serena Hotel. Below is the President’s speech
Your Highness the Aga Khan, the Rt. Hon. Prime Minister, ladies and gentlemen. I have not sorted out the pronunciation of Serena with His Highness yet. I used to go to the Serena in Nairobi during the 1970’s but His Highness is not aware of that. When we were fighting Idi Amin I would come from Tanzania and take advantage of the hospitality of Serena while I waited for my contacts. I would not stay here because my pockets would not afford it at that time but I could hang around. There was very good coffee in the lobby and I would take that when I was there. His Highness will couch me about the right pronunciation of Serena.
The story of the Serena here today is the story of the recovery of Uganda. Finding such a world class hotel in Uganda is proof that Uganda is recovering. The Highness’s speech of which I need a copy should be mandatory reading for our ministers. He has provided you fees-free consultancy as to how we need to attract businesses-investments. It is all there.
During the colonial times not much was done. What the colonialists did was to maintain order and of course there was no democracy that time. They built little infrastructure here and there and allowed a small private sector to develop. That small private sector they set up was developing well until it was interfered with by the wrong policies initiated in 1970. As His Highness has pointed out in his speech, the shares of the private companies were sequestrated by the government — taken over by the government.
That was a very bad signal and that’s what His Highness was talking about because his and his own businesses suffered in different parts of East Africa. So this was a mistake, a wrong philosophy. A philosophy based on distributing poverty rather than production. It was a strategic mistake and it accounted for the lagging behind of Africa, behind the Asian countries. By 1970, Uganda was not very far behind Malaysia for instance or Singapore, it was actually ahead with due respect.
However because of these mistakes we fell behind.
Then Idi Amin comes in 1972 and goes a step further in making mistakes. I have just come from China where in the 1960’s, 70’s, 50’s there were two Chinese leaders one called Moa Chatom controlling the main land and the other one Chancy Icky controlling the small Island of Taiwan. Mao Chatom used to refer to Chancy Icky as ‘teacher by negative example.’ In the case of Uganda, our teachers by negative examples were the ones who were shaping policies in 1970 and 1972. In 1972 Amin went further in making mistakes. He actually uprooted physically part of the utopian class which had become autonomous here. Therefore the policies of nationalisation, expropriation, uprooting of communities were the cause of our stagnation and decline.
Our political organisation, the National Resistance Movement (NRM) spent many years in the resistance, the opposition. As we were in the opposition we were studying the mistakes that were being made by the people running countries in Africa. By the time we took over power, we had a clear view of the sort of strategic stimuli we needed to apply on the economy to make it grow and grow sustainably.
When we took over power, one of the issues we resolved was putting in place a policy of private sector-led growth. That became our central point, private sector-led growth. That’s why Uganda has recovered now, it has been realised that what we set out to do in 1987, our program of minimum economic recovery, we have achieved. Inflation is under control, the currency is convertible, both the current and the capital accounts are liberalised. As a consequence, the transport sector has grown very fast. That’s why the big problem in Kampala now is traffic jam. The service sectors have grown very fast, the consumer goods are plenty.
However our aim is not to just achieve minimum recovery. Our aim is to transition from third to first world. In fact we have sort of stagnated on this minimum recovery because by about 10 years ago we had achieved minimum recovery. We should have taken off; but there were a number of mistakes caused mainly by interference from outside and to some extent by the elements of the political class which maintained our GDP growth rate at a modest 6.5% per annum. We can achieve 10-11% of growth as we did in 1994. Or as China has been doing or as Vietnam is doing right now. Therefore, we have been discussing with leadership to identify those bottlenecks that have kept our rate of growth at a modest of 6.5% and we think we have identified those mistakes.
One of them was a mistake in the power sector lagging behind in the building of dams. This is because we listened to some confused ideas that Uganda was in a new danger of having too much electricity. You can’t believe it; you do not know how many hours I spent arguing about building more dams. It takes a long time to build a dam, about three years. You can’t build it in a very short time. How can they talk of too much electricity when the peasants are destroying 8bn cc of wood per annum in form of firewood which is equivalent to 1000mw of electricity? How can you talk of too much electricity? I am actually an epitome of patience because among the qualities of patience is to talk with people who are wrong but you must continue to respect. You can see somebody is totally confused but you should continue calling him “Sirâ€.
However, within Uganda now I think that confusion is finished. The people in Lugazi are now experts in electricity. They told me I should shut down all the thermo plants and concentrate all the money in the hydro. They know the difference between our electricity and that of diesel. The people in Lugazi give lectures to engineers now, minister of finance and the World Bank. Next time I will take people from Lugazi to negotiate with the World Bank. They stopped me and told me the thermo plants we have resorted to are a mistake so we should go back to the hydro. In that strategy those mistakes are being sorted out. In the next few years (36 months or so from May 2007) we shall have addressed this question of power.
The other issue that is important for Uganda to take off to become a modern country is the cost of transport to the sea. We must together with Kenya and Tanzania resolve the cost of transport to the sea. We must also look at the air freights, air port charges and all that but as far as the land transport is concerned we must deal with transport to the sea which means dealing with the railway.
Otherwise once we deal with electricity and transport to the sea, what then we need is private sector investment in value addition. The services sector like this one, engineering and so on. Given what we are doing in the social sector (because you should remember that we have introduced free education in the primary schools, secondary schools, our literacy level is now 70%) Uganda can take off in a very short time. Within 10 or so years we should have gone to a very different level.
Now this is where His Highness the Aga Khan comes in as a partner. I must salute His Highness the Aga Khan with his community which is in front of you Ugandans, they are very good partners.
As you had him say, the investment atmosphere in the 1960s was uncertain, created by our leaders. It was uncertain because they could confiscate people’s investment. There were also political upheavals because the regimes were weak. This was part of the colonial heritage but I have not had time to discuss this with His Highness. That instability was due to the structures left by colonialism. If you leave a country without an army, how can you have stability? An army is the pillar of state. Here in Uganda we had one battalion of militia — the first battalion of Kings African Rifles. This was the army of Uganda made of illiterate people. How could they avoid the problems we are dealing with? But fortunately in the case of Uganda and other African countries, especially the ones of East Africa, we have had time to build the pillars of the state. Nobody can bring instability in Uganda.
In spite of the worries of the 1960s, His Highness the Aga Khan, as you heard him, says he invested in the development sectors in education and health. They feared the money making ones so much. Even when he was doubtful of the future, he was a reliable friend of East Africa, of Uganda. And I like his candid documented position as he has told you in English, he did not speak French. So I give the salute to His Highness for what he has been doing in Uganda, in East Africa. But now for the sake of Uganda he has moved a little further to the commercial sector because this Serena is not a school, neither is it a hospital; it is a money making unit. And you heard him say, ‘I want to complete the circuit, I want to have upcountry lodges because you can not have half tourism. Somebody can not come to Kampala and stay there, he must move upcountry’. I am going to discuss with him tomorrow. We must give him all that he needs so that he completes the circuit he was talking about.
But I am also interesting him in value addition. There is documented proof that the internal rate of return in Africa, even if you adjust it to risks, its still high compared to the rate of return in other continents. If we are already making money from cotton, we have been exporting cotton for the last 100 years in raw form, why should it be impossible to make money from textile when if you add value to a kilogram of cotton the returns are 15 times higher than the raw cotton. The same with coffee.
Therefore I am inviting the business arm of the Aga Khan Foundation to come and participate with us in value addition in cotton, fruits, leather, although we had a problem with this because we were not protecting our local producers on the exportation of those hides and skins. I will discuss with His Highness to ensure that the business atmosphere is improved so that this long term partner of ours helps us with the battle for value addition.
We only need three things now to take off: electricity, cheap transport to the sea and value addition. The rest like human resource development, telecommunication we are already doing, controlling inflation we have already done, eventually lowering the interest rates is being done. We are aiding UK with every kilogram of coffee with about 12 or so dollars. They give us some money but the one we give them is much more than they give us. We also aid UK in the jobs that are exported.
When I was in China they asked for raw materials and I said ‘very sorry,’ I will not sell you raw materials, you will have to buy my finished products. We supplied raw materials to Europe for the last 400 years, including slaves; we can not now supply China. There are very few bottlenecks but we shall deal with them because these days we are very serious.
Coming to the Serena where we are, this is a first class world facility because I have moved around and also travelled around the world quite a bit although I came from the bush. I have caught up with all parts of the world. I thank the prince, the one who followed this up and his people for the imagination they put in. You can see they are very good at product tailoring. Hotels are not just about building walls and lifts and things like that, they have put in more to the product. I was helped to appreciate the art they put in. This is a fantastic thing and we shall use it fully with the help of His Highness so that we have more conferences here to maximize the facilities.
With those few words it’s my pleasure to congratulate His Highness for the magnificent piece of investment in the form of Serena Kampala. Thank you very much.
Ends
The story of the Serena here today is the story of the recovery of Uganda. Finding such a world class hotel in Uganda is proof that Uganda is recovering. The Highness’s speech of which I need a copy should be mandatory reading for our ministers. He has provided you fees-free consultancy as to how we need to attract businesses-investments. It is all there.
During the colonial times not much was done. What the colonialists did was to maintain order and of course there was no democracy that time. They built little infrastructure here and there and allowed a small private sector to develop. That small private sector they set up was developing well until it was interfered with by the wrong policies initiated in 1970. As His Highness has pointed out in his speech, the shares of the private companies were sequestrated by the government — taken over by the government.
That was a very bad signal and that’s what His Highness was talking about because his and his own businesses suffered in different parts of East Africa. So this was a mistake, a wrong philosophy. A philosophy based on distributing poverty rather than production. It was a strategic mistake and it accounted for the lagging behind of Africa, behind the Asian countries. By 1970, Uganda was not very far behind Malaysia for instance or Singapore, it was actually ahead with due respect.
However because of these mistakes we fell behind.
Then Idi Amin comes in 1972 and goes a step further in making mistakes. I have just come from China where in the 1960’s, 70’s, 50’s there were two Chinese leaders one called Moa Chatom controlling the main land and the other one Chancy Icky controlling the small Island of Taiwan. Mao Chatom used to refer to Chancy Icky as ‘teacher by negative example.’ In the case of Uganda, our teachers by negative examples were the ones who were shaping policies in 1970 and 1972. In 1972 Amin went further in making mistakes. He actually uprooted physically part of the utopian class which had become autonomous here. Therefore the policies of nationalisation, expropriation, uprooting of communities were the cause of our stagnation and decline.
Our political organisation, the National Resistance Movement (NRM) spent many years in the resistance, the opposition. As we were in the opposition we were studying the mistakes that were being made by the people running countries in Africa. By the time we took over power, we had a clear view of the sort of strategic stimuli we needed to apply on the economy to make it grow and grow sustainably.
When we took over power, one of the issues we resolved was putting in place a policy of private sector-led growth. That became our central point, private sector-led growth. That’s why Uganda has recovered now, it has been realised that what we set out to do in 1987, our program of minimum economic recovery, we have achieved. Inflation is under control, the currency is convertible, both the current and the capital accounts are liberalised. As a consequence, the transport sector has grown very fast. That’s why the big problem in Kampala now is traffic jam. The service sectors have grown very fast, the consumer goods are plenty.
However our aim is not to just achieve minimum recovery. Our aim is to transition from third to first world. In fact we have sort of stagnated on this minimum recovery because by about 10 years ago we had achieved minimum recovery. We should have taken off; but there were a number of mistakes caused mainly by interference from outside and to some extent by the elements of the political class which maintained our GDP growth rate at a modest 6.5% per annum. We can achieve 10-11% of growth as we did in 1994. Or as China has been doing or as Vietnam is doing right now. Therefore, we have been discussing with leadership to identify those bottlenecks that have kept our rate of growth at a modest of 6.5% and we think we have identified those mistakes.
One of them was a mistake in the power sector lagging behind in the building of dams. This is because we listened to some confused ideas that Uganda was in a new danger of having too much electricity. You can’t believe it; you do not know how many hours I spent arguing about building more dams. It takes a long time to build a dam, about three years. You can’t build it in a very short time. How can they talk of too much electricity when the peasants are destroying 8bn cc of wood per annum in form of firewood which is equivalent to 1000mw of electricity? How can you talk of too much electricity? I am actually an epitome of patience because among the qualities of patience is to talk with people who are wrong but you must continue to respect. You can see somebody is totally confused but you should continue calling him “Sirâ€.
However, within Uganda now I think that confusion is finished. The people in Lugazi are now experts in electricity. They told me I should shut down all the thermo plants and concentrate all the money in the hydro. They know the difference between our electricity and that of diesel. The people in Lugazi give lectures to engineers now, minister of finance and the World Bank. Next time I will take people from Lugazi to negotiate with the World Bank. They stopped me and told me the thermo plants we have resorted to are a mistake so we should go back to the hydro. In that strategy those mistakes are being sorted out. In the next few years (36 months or so from May 2007) we shall have addressed this question of power.
The other issue that is important for Uganda to take off to become a modern country is the cost of transport to the sea. We must together with Kenya and Tanzania resolve the cost of transport to the sea. We must also look at the air freights, air port charges and all that but as far as the land transport is concerned we must deal with transport to the sea which means dealing with the railway.
Otherwise once we deal with electricity and transport to the sea, what then we need is private sector investment in value addition. The services sector like this one, engineering and so on. Given what we are doing in the social sector (because you should remember that we have introduced free education in the primary schools, secondary schools, our literacy level is now 70%) Uganda can take off in a very short time. Within 10 or so years we should have gone to a very different level.
Now this is where His Highness the Aga Khan comes in as a partner. I must salute His Highness the Aga Khan with his community which is in front of you Ugandans, they are very good partners.
As you had him say, the investment atmosphere in the 1960s was uncertain, created by our leaders. It was uncertain because they could confiscate people’s investment. There were also political upheavals because the regimes were weak. This was part of the colonial heritage but I have not had time to discuss this with His Highness. That instability was due to the structures left by colonialism. If you leave a country without an army, how can you have stability? An army is the pillar of state. Here in Uganda we had one battalion of militia — the first battalion of Kings African Rifles. This was the army of Uganda made of illiterate people. How could they avoid the problems we are dealing with? But fortunately in the case of Uganda and other African countries, especially the ones of East Africa, we have had time to build the pillars of the state. Nobody can bring instability in Uganda.
In spite of the worries of the 1960s, His Highness the Aga Khan, as you heard him, says he invested in the development sectors in education and health. They feared the money making ones so much. Even when he was doubtful of the future, he was a reliable friend of East Africa, of Uganda. And I like his candid documented position as he has told you in English, he did not speak French. So I give the salute to His Highness for what he has been doing in Uganda, in East Africa. But now for the sake of Uganda he has moved a little further to the commercial sector because this Serena is not a school, neither is it a hospital; it is a money making unit. And you heard him say, ‘I want to complete the circuit, I want to have upcountry lodges because you can not have half tourism. Somebody can not come to Kampala and stay there, he must move upcountry’. I am going to discuss with him tomorrow. We must give him all that he needs so that he completes the circuit he was talking about.
But I am also interesting him in value addition. There is documented proof that the internal rate of return in Africa, even if you adjust it to risks, its still high compared to the rate of return in other continents. If we are already making money from cotton, we have been exporting cotton for the last 100 years in raw form, why should it be impossible to make money from textile when if you add value to a kilogram of cotton the returns are 15 times higher than the raw cotton. The same with coffee.
Therefore I am inviting the business arm of the Aga Khan Foundation to come and participate with us in value addition in cotton, fruits, leather, although we had a problem with this because we were not protecting our local producers on the exportation of those hides and skins. I will discuss with His Highness to ensure that the business atmosphere is improved so that this long term partner of ours helps us with the battle for value addition.
We only need three things now to take off: electricity, cheap transport to the sea and value addition. The rest like human resource development, telecommunication we are already doing, controlling inflation we have already done, eventually lowering the interest rates is being done. We are aiding UK with every kilogram of coffee with about 12 or so dollars. They give us some money but the one we give them is much more than they give us. We also aid UK in the jobs that are exported.
When I was in China they asked for raw materials and I said ‘very sorry,’ I will not sell you raw materials, you will have to buy my finished products. We supplied raw materials to Europe for the last 400 years, including slaves; we can not now supply China. There are very few bottlenecks but we shall deal with them because these days we are very serious.
Coming to the Serena where we are, this is a first class world facility because I have moved around and also travelled around the world quite a bit although I came from the bush. I have caught up with all parts of the world. I thank the prince, the one who followed this up and his people for the imagination they put in. You can see they are very good at product tailoring. Hotels are not just about building walls and lifts and things like that, they have put in more to the product. I was helped to appreciate the art they put in. This is a fantastic thing and we shall use it fully with the help of His Highness so that we have more conferences here to maximize the facilities.
With those few words it’s my pleasure to congratulate His Highness for the magnificent piece of investment in the form of Serena Kampala. Thank you very much.
Ends