Oil cash will not be wasted, says M7

By Cyprian Musoke

PRESIDENT Yoweri Museveni promised that oil revenues will not be squandered on luxuries like wine and cosmetics.

“I want to assure all of you that the National Resistance Movement government will not allow the unique heritage of the people of Uganda in the form of ready money from oil be misused to import wines and cosmetics, as has happened in some countries in the world,” he told Parliament yesterday.

In a speech delivered by Vice-President Gilbert Bukenya, Museveni stressed: “The Ugandan oil will be for the present and future generations of Ugandans.”

To achieve this, he said the Government would apply the ‘most enlightened oil utilisation policy.’

“In particular, apart from the good knowledge of our petroleum scientists, economists and lawyers, we are exchanging experiences with the Norwegian government that turned their petroleum, a finite, exhaustible resource into eternal wealth for their people for all ages,” the President revealed.

He said the Government had created a petroleum unit in the Ministry of Energy in 1986, comprised of Ugandan scientists.

“We shall, using a minimum refinery, produce diesel, kerosene, aviation fuel and heavy oil for generating electricity by 2009. These discoveries have only been in 6% of the potential area in Uganda. The exploration is continuing in the rest of the area.”

Repeating his warning to corrupt government officials, Museveni dismissed people who claimed that the NRM had no political will to fight corruption.

“I am always amused and dismiss as unserious, those who spend a lot of calories pontificating that NRM has no political will to fight corruption. Those are mere charlatans if they are not the bona-fide uninformed types.”

He said the NRM had stopped extra-judicial killings, extortion on roadblocks and poaching in national parks, while establishing anti-corruption legislations and institutions like the IGG and the Leadership Code.

“How can we, then, fail to fight corrupt public officials pilfering state funds?” he asked. The long tenure of NRM had enabled the training of a large force of anti-corruption fighters who were educated, professional and patriotic, he noted.

He added that the UPDF’s capacity to guarantee peace had been enhanced, the Police was being restructured, the URA re-organised, and the Government was now providing appropriate manpower to anti-corruption agencies.

“Therefore, the corrupt, the non-patriotic, the non-dedicated or the careless are in for accountability,” he warned. He lauded this year’s budget for showing resilience of the economy.

“To score a GDP rate of 6.5% per annum, contain inflation at 7.8%, surpass the tax collection target for the financial year 2006/2007 by sh2,566b, the electricity shortages and very high oil prices notwithstanding, is remarkable,” he noted.

He also highlighted the appreciation of the Uganda shilling against the dollar, which he attributed to increased regional exports to eastern Congo, South Sudan and countries of the East African Community.

“Our foreign exchange reserves stand at $1,808.7m. Compare this figure with the reserves of $12m in 1986!” he exclaimed.

He noted that this year, the country expected to collect sh3,000b in taxes. “Compare this figure with the 1987 figure of sh44b!”

If Uganda was to increase its GDP tax collection to Kenya’s 20.6%, it would not need any more aid, he observed.

“As matters stand currently, it is gratifying that the donor contribution to our budget will be only 38%. This is a harbinger of better things to come.”

Kenyans were collecting more taxes because their economies were commercialised, while Uganda’s was still largely subsistence, he further observed.

He predicted that with the Bonna Bagaggawale (prosperity for all) programme, households would become more commercialised and taxes would go up.

“Now that we have secured tariff-free, quota-free markets in the United States, EU, China and Japan, the successful implementation of Bonna Bagaggawale in the next three or so years could lead Uganda to becoming a middle-income country in the not too distant future.”

But agriculture should be accompanied with industrialisation to trigger off development, he stressed.

“I have, therefore, directed that five industrial estates should be established in the towns of Mbale, Gulu Soroti, Kaseses and Mbarara. All these are far apart from Kampala and Jinja. Factories in these industrial estates will process much of what is produced by agriculture.” He noted that the budget had also introduced far-reaching incentives for exporters of finished goods.