STATE OF THE NATION ADDRESS 2011

BY

HE  Yoweri Kaguta Museveni President of the Republic of Uganda

At Parliament Kampala, June 8, 2011

HE The Vice President, Rt Hon Speaker, His Lordship the Chief Justice, Rt Hon Deputy Speaker, Rt Hon Prime Minister,  Rt Hon Leader of the Opposition, Hon Ministers, Hon Members of Parliament, Distinguished Guests, Ladies and Gentlemen

Madam Speaker, under Article 101 (1) of the Constitution of the Republic of Uganda, the President is required, at the beginning of each Session of Parliament, to deliver to Parliament an address on the State of the Nation.  This afternoon Madam Speaker, I am here to do two things.

First, I am here to fulfill the constitutional obligation by giving accountability of what has been done since the last address which I delivered on 2nd June 2010.

Secondly, I wish to apprise you Madam Speaker, Hon Members of Parliament and the country, of the plans and strategies of Government for the next twelve months.

Madam Speaker, permit me to congratulate all the Hon Members of Parliament upon being elected to the 9th Parliament. I congratulate you Madam Speaker and your Deputy upon your election to your respective prestigious positions.     I congratulate you, the Leader of the Opposition, upon your elevation to an essential office in democratic governance.    I congratulate all those who have been elected to various levels of responsibility.

[tab:Political Scene]

The Political Scene

Madam Speaker, on 18th February, 2011 we held Presidential and Parliamentary Elections.  These were followed by elections at various levels.  I congratulate all Ugandans upon their peaceful and active participation in the electoral process.  I also congratulate the Electoral

Commission for a job well done.  Where there was violence, it was the exception rather than the norm.  I thank all Ugandans who participated and contributed positively to the success of the elections.

I call upon the Electoral Commission and all stakeholders directly concerned, to study, in depth, the various reports that have come up on the electoral process.    The following must be of particular interest, among others:

• the management of the Voters’ Register, which I believe will be improved with the issuance of the National Identity Cards in the near future;

• the printing of Voters’ Cards and their security; and

• voter education in the light of a high percentage of spoilt votes.

Madam Speaker and Hon Members, we should congratulate ourselves upon funding fully both the Presidential and Parliamentary elections. We did not ask donors for a single coin for the 2011 elections.

Madam Speaker, while we congratulate the winners in these elections, I wish also to thank those who did not make it, for their participation. I implore them to continue to actively contribute to the development process of our nation as they prepare to try again in the next elections.

Those who feel strongly that they did not lose fairly, should seek redress in courts of law.

Madam Speaker and Hon Members, we must embrace all democratic principles within our respective political parties.  Discipline is as important for democracy as it is for the management of our political parties. Democracy and discipline should be enshrined in all our political parties’ constitutions and regulations.

[tab:Constitutionalism]

Constitutionalism and the Rule of Law

Madam Speaker and Honourable Members, I would like to re-affirm the National Resistance Movement Government’s total and firm commitment to the rule of law in the management of all public affairs of this country.

Let us all remind ourselves that while Chapter Four of our Constitution is elaborate on the Promotion and Protection of Fundamental and other Human Rights and Freedoms, those rights and freedoms are NOT

ABSOLUTE, hence the provisions of Article 43(1) that:

“In the enjoyment of the rights and freedoms prescribed in this Chapter, no person shall prejudice the fundamental or other human rights and freedoms of others or the public interest.”

Equally important, under Article 17 of the Constitution of the Republic of Uganda, duties of a citizen include, among others, the duty to respect the rights and freedoms of others; to protect and preserve public property; and the duty to co-operate with lawful agencies in the maintenance of law and order.

General limitations on fundamental and other human rights and freedoms are spelt out in Article 43 (1&2).  Let us all exercise and enjoy our rights and freedoms within the confines of law.

[tab:Economy]

State of the Economy

Madam Speaker and Honourable Members, on 8th June 2011, Uganda, like the other four partner states forming the East African Community, will be reading her Budget for the Financial Year 2011/2012.  The Budget Speech will give a detailed background to the economic outlook of our country.

Real Sector Performance

Uganda’s economy rebounded strongly in the first half of Financial Year 2010/11, recording a growth rate of 9% in the July – December 2010 period. Between July –September 2010 an annual growth rate of 5.1% was registered, while a 15.1% annual growth rate was registered in October – December 2010. The Industry and Services sectors grew by 17.6% and 13.6% respectively, in the two quarters. The month-on-month growth rate of economic activity in bricks and cement, saw-milling, paper and printing, as well as food processing was 8% in December 2010.

This overall economic performance of 9.1 % in the first half of the current financial year was better than that registered during the entire Financial Year 2009/10 which was estimated at 5.2%, as Uganda emerged from the global economic crisis.  The economic performance is still substantially higher than global and regional economic growth prospects estimated at 2.5% and 4.5% respectively.

The Ugandan economy was expected to grow by 6.6% for the whole of the Financial Year 2010/11, with Forecast for future years exceeding 7% per annum.

External Sector

Madam Speaker, Uganda’s balance of payments with the external world continued to be constrained as a result of slower growth of exports, tourism receipts and remittances in  the face of increased imports. This phenomenon is characteristic for exports given the on-going recovery from the global economic crisis by some of Uganda’s major trading partners.

Imports on the other hand, are structurally dependent on domestic needs, such as oil and petroleum products.   Though export receipts increased in January 2011 to US$ 211.6 million  from US$ 129 million in February 2010, imports were twice as much  at US$ 418.9 million, compared to export receipts of US$ 328.8 million in February, 2010.   Formal non coffee exports receipts that registered the largest increments include simsim, tea, cotton and fish.

Uganda’s National Foreign Exchange Reserves amounted to US $ 2.662 billion in January 2011 representing 4.6 months of import cover, compared to US$ 2.812 billion and  US$ 2.498 billion in December and June 2010, respectively representing 5.2 and 4.9 months of import cover.

The Inter-Bank Foreign Exchange mid-rate in February 2011 was Shs 2,341.9 per US Dollar compared to Shs 2,303.9 per US Dollar in December 2010 and Shs 2,257.3 per US Dollar in June 2010. The continued depreciation of the Uganda shilling is in line with increased import demand in the face of weak export performance that has not fully recovered from the global economic crisis.

[tab:Monetary sector]

Monetary Sector

Weighted average interest rates have remained stable over the period under consideration. The lending rates in January 2011 were at 20.1% compared to the same level in June 2010 and the savings rate remained at 2.4% during January 2011.

Treasury Bill rates exhibited increases between June 2010 and January 2011 as Bank of Uganda sought to stem excess liquidity. Consequently, the interest rate on the 91-day Treasury Bill rate increased to 9.1 % compared to 4.3%; the 182-day Treasury Bill interest rate rose to 9.4% compared to 5.3%; and the 364-day Treasury Bill increased to 9.8% compared to 6.2%. Private Sector Credit continued to grow at 35. 9% between July, 2010 and January, 2011 amounting to an average of Shs 689 billion per month, compared to Shs 438 billion per month between July, 2009 and January,2010.

Revenue Performance Revenue collections amounted to Shs 3,281.2 billion against the target of Shs 3,277.4 billion at the end of February 2011, representing growth of 20.1% compared to the same period last financial year and a marginal surplus of Shs 24 billion between July 2010 and March 2011.

Inflation The annual headline inflation rate (all items) for the year ending April, 2011 rose to 14.1% from 11.1% in March, 2011. The main driver of price increases remained food price inflation, which increased by 39.3%. Fuel prices inflation stabilized remaining at 9.74% in April, 2011.

The recent increase in prices has been driven by a combination of domestic, regional and global factors, including poor rainfall and drought that affected food production and, consequently, food prices. The loss of value (depreciation) of the Uganda Shilling affected prices.  The depreciation of the Uganda Shilling in turn, has been caused by the following three factors:

i) speculative tendencies in the run-up to the 2011 General elections;

ii) slower growth of exports, tourism receipts and remittances, even while imports kept increasing; and by

iii) continued increase in imports that are necessities, such as oil and petroleum products.

The Uganda Shilling however, has been strengthening over the last few weeks as speculative pressures that emerged during the election period subside, giving relief for prices of imported goods and petroleum products. Government is committed to ensuring the stability of the Uganda Shilling, as was shown by the active intervention by Bank of Uganda to mitigate volatility in the foreign exchange market.

Madam Speaker and Hon Members of Parliament, the recent rise in prices can also be explained by imported global inflation.  On the regional and international scene, Uganda’s major trading partners have recently been facing a surge in commodity prices, particularly for oil and food prices.

Indeed, world food prices have risen by 36%, according to the World Bank.

In comparison, within the Eastern African Region, Kenya registered increases in overall inflation of 9.9% in March, 2011 with annual food and fuel-related inflation rising by 15.9% and 15.89% respectively. This followed a 6.5% annual inflation which Kenya registered in February, 2011. Tanzania registered an annual inflation rate of 7.5% in February, 2011 rising from 6.4% in January, 2011. Ethiopia’s annual inflation rate dipped to 16.5% in February from 17.7% in the January, 2011 as food prices rose more slowly. Food prices in Ethiopia rose by 12.8% during February, 2011, slightly down from an increase of 13.6% in January, 2011.

Zambia’s annual rate of inflation increased to 9.2% in March, 2011 on account of increases in prices of non-food items such as fuel and transportation, lighting and clothing, even though food prices declined as the harvest period commenced.

[tab:Inflation Measures]

Government Measures to Deal with Inflation

Madam Speaker, measures to mitigate current inflation trends are packaged into short-term, and medium- to- long term actions, including the provision of energy and road infrastructure.  In addition, critical measures that have a dampening impact on the rapid rise in both food and fuel prices have been put in place.   Furthermore, it must be recognized that Government does not impose any tax on food items produced and consumed in Uganda. The only taxes on food are taxes on rice and sugar.

These are meant to protect local production and, consequently, jobs.

[tab:Agriculture]

Agriculture

Madam Speaker and Honourable Members, agriculture remains the backbone of our economy.   The NRM Government’s goal has been to fundamentally transform the three million Ugandan households in subsistence agriculture to commercialized agriculture.  Structural transformation entails moving away from rain-fed agriculture to irrigation, from the hand-hoe to mechanized agriculture; and from production for household consumption to production for the market with associated value addition through agro-processing.

In the short, medium and long-term, the NRM Government continues to undertake pivotal actions in a number of critical areas which I will now point out to you.

In Production and Food Security, Government will focus on increasing farm production and productivity through use of fertilizer and improved planting seed variety and animal breeds. It will implement household food security programmes through the National Agricultural Advisory Services (NAADS) in order to ensure that households have enough food for themselves throughout the year. In the medium-term the NRM Government will reach 100 households in every parish.

The NAADS Programme  is currently covering all the 112 districts. NAADS activities are to be found in the country’s 1,041 sub-counties, in its 176 urban councils and in the five divisions of our capital city, Kampala.

In November 2010, Parliament approved the second phase of NAADS as a sub-programme under the Agricultural Technology and Agribusiness Advisory Services (ATAAS). Benefitting from the latest agricultural technology and agribusiness knowledge, NAADS is set to increase agricultural productivity and farm household incomes. To-date NAADS has delivered grants of assorted inputs, tools and equipment to selected farmers countrywide. It has developed and disseminated new implementation guidelines to all local governments and other stakeholders.

It has established Village Farmer Fora (VFF) in 112 Districts. The programme has put in place operational Village Community Procurement Committees (VCPG) throughout the  country. NAADS has recruited Subcounty NAADS Coordinators (SNCs), District NAADS Coordinators (DNCs) and Agricultural Advisory Service Providers (AASPs).

In order to supplement NAADS efforts, Government has put Shs 15 billion in financial institutions as Commercialization Partnership Challenge Fund.

In addition, and under the aegis of  NAADS, Government has developed a special intervention for the Acholi  Sub-region to demonstrate modern farming in partnership with the Assembly of Acholi Clan Chiefs (Kerkwaro).

Similar interventions for the youth have been initiated in the Teso subregion.   An ambitious National Rice Development Strategy (NRDS) aimed ultimately at self-reliance in rice production by 2013, but targeting to double rice production in the next five years, adds to initiatives to ensure food security for the country.

Irrigation and Water for Production

Government has advanced plans to support households with small-scale rain-harvesting and storage technology and large-scale water reservoirs to minimize reliance on rain-fed agriculture alone.   To this end, Government has  finalized designs to rehabilitate four irrigation schemes namely: Mobuku, Olweny, Doho and Agoro to be completed by December, 2012.

[tab:Agric finance]

Agricultural Finance

Support to modernise agriculture is backed by an Agricultural Credit Facility (ACF), which in the 2010/11 Financial Year stood at Shs 90 billion. This money can be accessed from participating commercial banks at an interest rate not exceeding  12% per annum. Once borrowed, the farmer must pay back the loan over a period not exceeding eight years.

Under Livestock, Government efforts to prevent, control and eradicate animal diseases and vectors are underway in areas affected by Foot and Mouth Disease (FMD), Contagious Bovine Pleuro-Pneumonia (CBPP) and Contagious Caprine Pleuro-Pneumonia (CCPP). Government has supported the development of the Uganda Meat Producers Co-operative Union.

Progress has been registered in the dairy subsector with increased volumes of milk produced at an annual growth rate of 8-10%.   With new investments in the sub-sector, our milk-processing capacity will increase from 463,000 litres to 710,000 litres per day.

Madam Speaker and Honourable Members of Parliament, the  Fisheries Sub-sector, with support from the Chinese Government, finished construction and handover of the Aquaculture Technology Demonstration Centre at Kajjansi  in December, 2010.  With an operational fish-feed mill and a hatchery completed, Government support to aquaculture means that the country can produce enough fish-fry (fish seed) to meet national and export  demand.  Government finalized the rehabilitation and equipping of four (4) Aquaculture Development Centres.

Also, under the Fisheries Development project supported by the African Development Bank, Government completed construction of the landing sites of Bwonda, Gorofa, Mwena, Kiyindi, Kitobo and Majanji on Lake Victoria; and of  Lwampanga and  Bukungu on Lake Kyoga. Butiaba landing site in Lake Albert is near completion while work will start this year on Namasale and Kagwara landing sites by Lake Kyoga.

Targeted Interventions

Government has re-engaged various communities into meaningful production under targeted interventions such as the Karamoja Integrated Disarmament and Development Programme; the Northern Peace Recovery and Development Plan PRDP) and the Luwero-Rwenzori Development Plan.

In the next five years, the NRM Government will implement pledges to the people of Uganda made in its 2010 Manifesto to specifically enhance production efforts country-wide. It will target three million households, approximately  180,000 model farmers, 90,000 commercial farmers and 550 nucleus  farmers. Interventions will include those aimed at increasing production of improved seed and breeding stock through support to research. Other planned interventions include support for six market-oriented model farmers in every parish every year.

Also included in the package of interventions is support for three commercial model farmers per parish annually. The operationalization of the Commercialization Challenge Fund (CCF), under NAADS will give a boost to agricultural rural finance. This money is meant to provide financial support to nucleus farmers under the public/private partnership arrangement.

Government will also intervene in order to increase agricultural production and productivity by promoting the use of both organic and inorganic fertilizers. It will soon address the pertinent matter of actualizing phosphate fertilizer production at Sukulu Hills in Tororo.

Other interventions include the construction of multipurpose water reservoirs in catchment areas for human consumption, irrigation farming and for livestock. Special focus will be made on war-ravaged and former conflict areas including the Teso and Karamoja sub-regions.

Finally, in order to fulfil its pledge to transform Uganda, Government will enhance the marketing and processing capacity of agricultural products in four different ways. First and foremost, it will provide agro-processing technologies to organized groups e.g.  hullers, milk cooling plants, maize mills, etc at sub-county and eventually parish levels. It will continue to fund the Makerere University Food Science and Technology Department in order to enable graduates set  up fruit, vegetable, and animal products and agro-processing enterprises. It will also fund the Uganda Industrial Research Institute (UIRI) so that it can continue to establish/support agro-processing ventures —  as was done for peanut butter production in Lira District, fruit juice processing in Mpigi District, meat processing in Busia District,  and mushroom processing in Kabale District. The fourth way to enhance agro-processing and the marketing of Ugandan products will be through improved post-harvest handling.

Government plans to build storage capacity for food and other commodities at the farm level and also at sub-county, district and regional levels.

Finally, Government will establish 18 regional trade information centres to undertake market information dissemination and to build linkages with grassroots agro-processing units at sub-county and district levels.

These will be at Arua, Gulu, Kitgum, Lira, Moroto, Soroti, Mbale, Jinja, Iganga, Hoima, Luwero, Masaka, Kasese, Tororo, Mubende, Mbarara, Kabale and  Fort Portal.

Above all, Government will guarantee national food security, while also enabling the people to move from subsistence to market-oriented farming   for both the local and international markets.

[tab:Energy & Minerals]

In the Energy and Minerals Sector, Madam Speaker and Hon Members of Parliament, I would like to report on the progress of some of the projects undertaken.

Work on the construction of the  Bujagali Hydropower Project  dam, power house and its associated transmission line is nearly completed.

The commissioning of its first turbine of 50 MW is still on course for October this year. Thereafter, the commissioning of the full 250 MW plant will be in April, 2012.   The delay in having the first Unit on line in June, 2010 with final commissioning in April, 2011 was as a result of unforeseen poor rock conditions at the gated spillway which had to be handled in a special way.   Construction of the Bujagali Interconnection Project is also progressing well.   This Project consists of a 220 KV transmission line from Bujagali to Kawanda and a 220/132 KV substation at Kawanda.  This transmission line will evacuate power from Bujagali Hydropower Project to the National Grid.

A detailed feasibility study and engineering design for the  600 MW Karuma Hydropower Project  has been concluded. The  procurement process, to acquire a contractor to undertake the construction, has started.  Construction works are expected to commence in July this year, with financing from local resources.

On Renewable Energy Projects, Madam Speaker, I would like to report that construction of Mpanga Mini Hydro (18 MW) in Kamwenge was completed and the project was commissioned in April this year.

Buseruka Mini Hydro (10 MW), Ishasha Mini Hydro (6.5 MW), Maziba (1 MW) and Nyagak (3.5 MW) will be commissioned before the end of this year.

Feasibility studies for Kikagati (10 MW) were completed and construction is to start before the end of July this year.  Detailed feasibility studies were also completed for Olewa I (0.6 MW) and Olewa II (0.6 MW). Procurement of a contractor for the rehabilitation of Maziba (1 MW) has started while procurement of consultants to undertake feasibility studies for Nshongezi (22 MW), Ntono (2.5 MW), Ndugutu (0.5 MW) and Musizi (20 MW) has been concluded.

A total of 30  Rural Electrification schemes will be commissioned in September this year, Madam Speaker.  Another 19 rural electrification schemes are under construction and will be commissioned in November, 2011.

[tab:Petrolium]

Petroleum Sector

Madam Speaker and Honourable Members, to date, a total of over (49) exploration and appraisal wells have been drilled in the country.  Out of those, 44 have encountered oil and/or gas in the subsurface.  It is estimated that the discoveries made  to-date can support production of over 100,000 barrels of oil per day for 25 years. This quantity of oil justifies large-scale refining in the country.

In the short-term however, the discovered gas resources together with the test crude produced during appraisal, will be used to generate electricity, thus contributing to the country’s electricity needs.  Plans are under way to develop a gas-to-power project utilizing the discovered gas at Nzizi in Hoima District.

I am further pleased to report that  exploration drilling was extended to Kihiihi-Kanungu areas in Exploration  Area 4B in 2010.  Currently, the appraisal of the fields in Exploration Areas 1 (Pakwach Basin) and Exploration Area 2 (Butiaba-Wanseko area) is in progress. A final evaluation of oil reserves using 3D seismic survey and appraisal drilling is in progress. Once completed,  the development phase of creating infrastructure, like pipelines and oil-processing plants, will follow and will in turn lead to the start of oil production in the country.

The feasibility study Government has undertaken for the development of a refinery in Uganda, has revealed  that the refinery project is both technically and financially viable.  Consequently, Government has commenced development of a refinery as a project of three to five years.

Government is fast-tracking the construction of the refinery to process crude oil from the Albertine Graben. While this is a medium-term measure, it will ensure that the vagaries arising from being supplied with fuel from far afield are mitigated. It will also allow the building of larger fuel reserves than those held by oil companies today; to deal with any shocks that may arise in supply.

Madam Speaker and Honourable Members, in 2010 petroleum and other fuel products supply was generally smooth, except for the month of September when erratic supplies of petrol were experienced.  However, the situation has significantly changed since the beginning of this year, mainly because the demand for oil internationally, regionally and locally has continued to grow, surpassing supply.

As an illustration, here at home, statistical data from the Ministry of Energy and Mineral Development for February and March, 2011 indicates that while PMS (Petrol) requirements for the month of March, 2011 were 32,832,900 litres, only 22,381,247 litres were supplied, leaving a deficit of 32%.  Projected AGO (Diesel) requirements for March 2011 were 76,556,500 litres but only 40,722,383 litres  were supplied, leaving a deficit of 47%.

Madam Speaker,  it is irresponsible and unpatriotic for some leaders to mislead the public that  fuel prices in Uganda are the highest in the Region.  In our Region, comparable fuel prices in the month of April were as follows:

Petrol Diesel

Uganda  Shs. 3,500 Shs. 3,000

Kenya  K. Shs. 112

(Ug. Shs. 3,192)

K.Shs 110

(Ug. Shs.3,135)

Rwanda  R. Fr. 1015

(Ug. Shs 3,857)

R. Fr. 1015

(Ug. Shs. 3,857)

Tanzania  T. Shs. 2006

(Ug. Shs. 3,210)

T. Shs. 2000

(Ug. Shs. 3,200)

Southern

Sudan

S. Pound 4.5

(Ug. Shs. 3063)

S. Pound 3

(Ug. Shs. 2040)

Notwithstanding the discomforting prices, the following positive developments are worth mentioning. First, the Jinja Storage Tanks with a capacity of 30 million litres as national strategic fuel reserves, are being refurbished and restocked under a Public-Private Partnership initiative.  Furthermore, in order to ensure availability of petroleum products in the country, all oil marketing companies are required to maintain stocks of up to 10 working days.

Secondly, in line with the Petroleum Supply General Regulations, 2009, Government issued new guidelines for licensing of operators in the petroleum sector regarding compliance with Health, Safety and Environmental Regulations. These ensure the systematic development of petroleum marketing facilities in the country. Last but not least, as a result of efforts towards quality and standards monitoring, noncompliance levels reduced from 29% in 2009 to 4.2% in 2010.

In the Mining sector,  Madam Speaker and Honourable Members, the following are worth noting, among other developments. During 2010, 123 Prospecting Licenses, 133 Exploration Licenses, 18 Location Licenses, 2 Mining Leases, 51 Mineral Dealers’ Licenses and one Goldsmith’s License were granted.  This is attributed to the dissemination of the results of the airborne geophysical survey.

In 2010, Government realized revenue to the tune of  Shs 3.631 billion as Non Taxable Revenue (NTR) accruing  from royalties and mineral license fees.  Royalties alone contributed Shs 2.795 billion of the total revenue generated, shared or to be shared at a rate of 80% for the Central Government, 17% for Local Governments of the mining districts and 3% to the lawful land owner.  The major contributors to the revenue earned in 2010 were Tororo Cement Ltd,  Hima Cement Ltd and Kasese Cobalt Company Ltd.

[tab:Education]

Madam Speaker, Hon Members of Parliament, I now turn to the SOCIAL

SECTOR.  In Education,  among the interventions  undertaken under the Primary Education sector in Financial Year 2010/2011 were:

i) the procurement of P4 and P5 curriculum;

ii) the construction of teachers houses in 80 schools in Arua and Nebbi;

iii) the admission of more pupils in schools in war-affected areas e.g Laroo school;

iv) the signing of customized performance targets contracts by  95% of headteachers and their deputies in all quality enhancement initiative districts; and

v) the payment of hardship allowances to teachers in hard-to- reach areas.

In the year 2011/12, the  sector aims to achieve a pupil-teacher ratio of 56:1 in all Government schools. This will be attained by deployment of teachers across all districts. The sector plans to strengthen routine inspection and head-teacher training  in leadership management in all Government-aided schools.

Under Secondary Education, the year under review witnessed  the payment of capital grants for both private and universal secondary education and the disbursement of funds for completion of 16 administration blocks for seed schools and for rehabilitation and expansion of 11 traditional schools.  It also witnessed the rehabilitation and commissioning of Sir Samuel Baker school; and the aiding of 66 private community secondary schools.

Future prospects for  FY 2011/12 in Secondary Schools A major intervention in 2012 is the extension of universal secondary education to cover “A” level. Other prospects include the provision of grant aid for private community secondary schools. In addition, it is in plan to construct teachers’ houses for specific seed secondary schools.

Additional teachers’ houses as well as classrooms, science laboratories, libraries and hostels in island or mountainous and other hard-to-reach areas are to be constructed under the Universal Post-Primary Education and Training (UPPET) World Bank funded project. It is also in plan to provide management training to all Board Members and Parent-Teacher Association members in all schools in the country.

Madam Speaker and Honourable Members, the Commission of Inquiry on the mismanagement of UPE/USE funds started its work in January, 2011.    Under  Business, Technical, Vocational Education and Training (BTVET),  capitation grants have been paid in Health Training Institutions Teachers’ Colleges, Technical Institutions and Colleges of Commerce, among others. Libraries have been equipped while dormitories and classrooms have  been constructed in several institutions. The popularization of the BTVET Act 2008 will be continued, as will the rehabilitation and construction of physical infrastructure. All these activities will continue in districts that are still in need.

Success has been registered in  some of the following areas in  Higher Education, Madam Speaker. There has been  transfer of funds to Kumi University, West Nile University and to Kigumba Petroleum College. Topup allowances to students on Government-to-Government scholarships in foreign countries have been provided. Some 60,000 students have been admitted to Universities and other tertiary institutions in the Academic Year 2010/2011. Last but not least, another University is in the offing with the acquisition of 130.05 acres of land at Muni Hill for Muni University.

Plans for the Financial Year 2011/2012  include, among others, ensuring  that internship and field attachments are undertaken by all public universities. Government will continue with construction work at Uganda Petroleum Institute, Kigumba and expand the admission of students. It also plans to set up a Task-Force to look into the establishment of the Open University of Uganda. Government will continue the construction of infrastructure at Muni University in readiness to open its gates in August 2012. As a special consideration for students from the North, Government will, in the next financial year, support students from Acholi and Lango sub-regions who do not qualify for Government sponsorship but qualify to join University.

Teacher Instructor and Education Training

Notable achievements here were the commissioning of Shimoni Core Primary Teachers’ College in 2011, teacher participation in harmonization of East African Teacher Education Curricular, as well as completion of construction of teachers’ colleges and tutors’ houses.

Plans for Financial Year 2011/2012 include the completion and relocation of Shimoni demonstration school infrastructure. Also at hand is the expansion, rehabilitation and construction of infrastructure for teachers colleges. Targeted are core Primary Teachers’ Colleges, National Teachers’ Colleges, Instructors’ Colleges and Mulago Health Tutors’ College.

Under  Special needs education, career guidance and counseling, teacher training and orientation of administrators on specialized guidance and counseling was done in selected districts and Institutions.

Future plans include the development of guidance and counseling policy, as well as its five-year strategic plan. Also in plan is the construction of special schools for both the blind and the deaf in West Nile and Kibaale respectively; and the placement of school leavers.

Among the notable achievements under the National Curriculum Development Centre was the completion of the drafting of the Kiswahili Curriculum for pre-primary and primary schools. The translation of the Early Childhood Development Care Givers Guide in 16 languages was another major achievement; as was the development of Supplementary Readers for lower primary.

Plans for 2011/2012 Financial Year include the piloting of the Kiswahili Primary School Curriculum and the development of educational materials for special needs deaf and blind children. A new “A” level

Secondary School Syllabus featuring 19-subjects will be brought on board this year. The completion of the National Curriculum Development Centre Buildings is in prospect for the next financial year.

[tab:Health]

Health

Madam Speaker, Government is totally committed to the improvement of health service delivery all over the country. Government plans to achieve this through the implementation of the five-year Year Health Sector Strategic and Investment Plan that focuses on interventions in priority areas aimed at reducing morbidity and mortality.  Emphasis is laid on the delivery of a minimum health-care package consisting of the following elements:

(i)  health promotion, disease prevention and community health initiatives, including epidemic  and disaster preparedness and response;

(ii) maternal and child health;

(iii) nutrition;  and

(iv) prevention, management and control of communicable diseases.

Significant achievements have been registered in malaria control through special interventions, including distribution of mosquito nets and improvement in the referral system.

Health Infrastructure

Government has embarked on the rehabilitation and the re-equipping of all existing medical facilities. It is also embarking on the construction of new structures such as staff houses. A number of projects attest to this.

The following hospitals underwent partial rehabilitation during the year under review: Nebbi, Apac, Tororo, Bududa, Kambuga, Rushere and Itojo. The Health Centres of Lyantonde, Masafu, Bukwe, Kyenjojo, Katakwi and Buwenge are being upgraded to general hospitals.

Government has constructed Mental Health Units of 45-bed capacity each at seven Regional Referral levels.  Conversion of Mbarara Referral Hospital to a 608-bed National Referral Hospital is in advanced stages.

Plans to de-congest Mulago National Referral Hospital through construction of three satellite hospitals at Naguru in Nakawa Division, Kawempe in Kawempe Division and Kiruddu in Makindye Division have been concluded. Construction of staff accommodation in Health Centre IIs and Health Centre IIIs in Karamoja region with support from the Italian Government has commenced.  The Rehabilitation and reequipping of two Regional Referral Hospitals (Moroto and Mubende Hospitals), 17 General Hospitals and 27 Health Centre IVs, using a loan from the World Bank is under way.

Supervision and Monitoring

A system of intensified supervision and inspection is addressing the issues of staff absenteeism, pilferage of drugs, staff and quality of care, among others.  The Medicines and Health Services Monitoring Unit established in State House, to further strengthen inspection, has done a commendable job especially in exposing drug thieves, a number of whom are already being prosecuted.

[tab:Social Protection]

Social Protection Programme

Madam Speaker and Hon Members of Parliament, in September,  2010, Government launched the expanded Social Protection Programme whose aim is to provide a mechanism for  reducing chronic poverty; and for  enabling vulnerable groups to benefit from the opportunities of economic growth by engaging in productive activities.

The special grant for programmes for persons with disabilities was increased from Shs 1.5 billion covering 48 districts in the Financial Year 2009/2010 to Shs 3.0 billion for all districts in the Financial Year 2010/2011.    The grant has been used to support the creation of employment opportunities for persons with disabilities through entrepreneurship training and provision of seed capital.

Labour and Employment In November 2010, Cabinet approved the country’s National Employment Policy which I officially launched on Labour Day, 1st May, 2011.  The Policy identifies priorities and strategies for increasing employment opportunities for Uganda’s labour force and improving roductivity of the workers.

Under the Externalization of Labour Programme, by December 2010, a total of 9,960 Ugandans had secured employment outside the country through recruitment agencies licensed by Government.  In December, 2010 those workers remitted a total of US$ 5,478,000.

To address the problem of unemployment and underemployment, Government through the Ministry of Gender, Labour and Social Development, provided non-formal vocational and entrepreneurial skills training to 334 youths; and seed capital grants to 167 youth groups in 19 districts.

During the next Financial Year,  emphasis will be put on building capacity of Labour Market Information Systems to produce accurate and timely information on jobs, desired skills and job seekers, among others.

Availability of labour information will enable the labour force to access employment opportunities within Uganda, in the East African Region and beyond.

[tab:Roads]

Transport

Road Sector

Madam Speaker and Hon Members, the  Shs 283.9  billion passed by   Parliament as the Uganda Road Fund for road maintenance, has been disbursed to the Uganda National Roads Authority (UNRA) and to the District, Urban and Community Access Roads agencies respectively, for road maintenance.

By December 2010, the percentage of paved national road networks in fair-to-good condition was 75% against the annual target of 80%. The achievement of routine mechanized maintenance of paved roads was 1,716 km out of the annual target of 2,000 km.  The achievement of periodic maintenance of paved roads  (re-sealing) was 86 km out of the annual target of 127 km.

Madam Speaker, the detailed design of the Second Nile Bridge at Jinja commenced, along with the construction and rehabilitation of Aswa Bridge on Gulu-Kitgum  road.  Rehabilitation was also undertaken on the Awoja Bridge on Mbale-Soroti road.

The following, among others, are planned for the Financial Year 2011/2012:

(i) Tarmacking of a total of 150 km of gravel national roads, along with the rehabilitation of 150 km of paved national roads.

(ii) Dualling of Kibuye-Busega-Mpigi, Kampala-Northern bypass and Kampala-Jinja will commence along with a Design Review for the proposed Kampala-Entebbe Express Highway.

(iii) Under the District, Urban and Community Access Roads (DUCAR) Network, apart from routine maintenance, 3.5 km of roads in Kampala Capital City will be upgraded to paved standard along with 15 km of  low-cost seals elsewhere. One hundred and fifty (150) km of district and tourism roads will be rehabilitated.  Contractors, labour-based societies and district non-engineering staff will be trained.

Madam Speaker, the enactment of the Kampala Capital City Authority Act means that the Central Government is now fully responsible for roads in the City.  Government will, therefore, in due course start a three-year programme to address road and traffic improvements within Kampala City.

I appeal to all Kampala residents especially those in Bwaise, Kalerwe, Kawempe, Ndeeba, Nateete, Nalukolongo, Kisenyi and Kyebando to stop dumping garbage in the drainage system. Garbage blocks the smooth flow of water resulting into floods in the City.

[tab:Rail & Water]

Rail and Water Transport

Repair of MV Kaawa and dry dock was started.  Design  for MV Kabalega II, Port Bell and Jinja piers is to start later this year. The ferry for Lwampanga-Namasale will commence operations. Procurement of a new ferry to replace the old  one at Laropi will commence.   Socio-economic surveys on Lake Victoria, Albert and Kyoga were conducted.

The feasibility study for repairing  and upgrading the Tororo-Pakwach railway line was completed and the study for Kampala-Kasese railway line is on-going.

During the Financial Year 2011/2012  the feasibility study for upgrading the Kampala-Kasese railway line will be completed and the study for the Kenya-Uganda standard gauge railway line will commence.

Under Air transport, the second phase of construction for the terminal building at Arua is currently being carried out. So is the perimeter wallfencing of Gulu Airport.  In the coming Financial Year, works on Kasese Airport development project will start almost simultaneously with work on the terminal building at Masindi  aerodrome.  A bilateral air service agreement between Uganda and the Democratic Republic of Congo will be finalized.

With regard to Road safety, Madam Speaker and Hon Members, the increasing number of road traffic accidents have been attributed mostly to over-speeding on the improved  roads, as well as to carelessness and inconsiderate use of the roads.    I appeal to all motorists and other road users to  avoid  over-speeding,  drunken-driving and use of drugs which have been major contributors to the occurrence of accidents.  All road users must observe traffic rules.  The Police must step up the enforcement of the Traffic and Road Safety Act as well as the Regulations made under it.

[tab:ICTs]

Information and Communications Technology (ICT)

Madam Speaker and Hon Members,   indicators of the ICT sector’s contribution to Uganda’s economic growth in terms of GDP, investment, employment and  tax revenue have all improved, as highlighted below.

(i) Investment from the private sector for the Financial Year 2010/2011 is estimated to be  US$ 300 million compared to US$ 270 million in 2009.  Most of the investment has been in the form of infrastructure and network improvement by new and existing service providers.

(ii) Gross turnover sales from the communication sector for 2010/11 is estimated at US$ 936 million.  The revenue is predominantly from the telecommunications subsector driven by increased competition, the landing of the undersea cable  systems in the coast of East

Africa and the national terrestrial fibre rings starting to reach various parts of the country.  New services such as mobile banking are also taking root.

(iii) In terms of Government revenue, it is estimated that the communications sector generated  close to Shs 300 billion during 2010/11, an increase of close to 20% from the previous year.

(iv) The ICT sector has become  one of the leading sources of employment, with close to 14,000 persons directly employed by both service providers and Government by December 2010; and more than 800,000 indirectly employed.

(v) By December 2010, the estimated number of fixed and mobile voice telephony customers was more than 12.8 million compared to 9.6 million in December 2009.

(vi) The increase in competition, coupled with the announcement of reduced interconnection rates by the Regulator in July, 2010, triggered what is now being referred to as “price wars” in the telecommunications market, leading to reduced call prices.

(vii) Data and Internet   Like the voice market, the internet market was very vibrant during 2010/11.  By the end of September 2010, international bandwidth uplink stood at 3,433 mbps compared to a mere 850 mbps in December 2009, an increase of more than 300%.

The improvement is attributed to the increased competition  since the landing of the three cable systems (Seacom, TEAMS and Easssy) on the East African coastline;  and to increased competition and infrastructure at the national level.

Mobile Broadband Access  By the end of 2010, it was estimated that there were more than 600,000  mobile internet subscriptions compared to 310,000 in December 2009. This monumental growth is attributed to price drops for both bandwidth and mobile modems.

(viii)  Broadcasting and Multimedia Subsector By December 2010, the number of private FM frequencies issued had risen from 202 to 210, of which 156 are operational.  Fifty-four (54) FM stations were assigned frequencies but are yet to get on air.  Of the 46 TV stations assigned frequencies, 26 are on air.

Madam Speaker and Honourable Members, it is essential that we put in place effective measures to prevent and fight cyber crime.  For the Financial Year 2011/2012 the following will be undertaken, among others:

(a) Expansion of Tetra Communications System;

(b) Digital Television and Data  casting (Migration from analogue to digital);

(c) Investment in new business ventures in Posta especially in ITled initiatives including setting up information centres to enhance electronic communications, instant money transfer and counter automation;

(d) Setting up a National Data  Centre to provide centralized storage and security of all Government Information.

(e) Operationalization of ICT Security and cyber laws. Land

Government is committed to sustainable land use and land tenure security.  The following have been achieved, among others:

(i) Enactment of the Land (Amendment) Act, 2010 which has enhanced the security of occupants on registered land in accordance with Article 237 of the Constitution.  The Act has been translated into 19 local languages and distributed widely.

(ii) Eighty District Land Boards  have been given training on the determination of annual nominal ground rent (busuulu).

(iii) The School of Survey and Land Management at Entebbe, which had been closed for over ten years, was re-opened to build human resource capacity in the land sector.

(iv) Construction of the National Land Information System Centre on Plot 9 Lourdel Road commenced, and will be completed before the end of this year.  When the Centre becomes operational, it will be a

One-Stop-Centre on land information in the country.

(v) Construction/renovation of Regional Land offices covering the  districts of  Arua, Gulu, Lira, Masindi, Kabarole, Masaka, Mukono, Kibaale, Mbarara and Wakiso was completed.

(vi) The Uganda National Land Policy, which provides a framework for land management and administration, will soon be discussed by Cabinet.

During the coming Financial Year,  the following will be undertaken, among others:

(i) Implementation of the Uganda National Land Policy.

(ii) Implementation of the Land Information System in the initial six land offices of Kampala, Mukono, Jinja, Masaka, Wakiso and Mbarara.

(iii) Legislation for operationalization of  the Uganda Land Commission as a statutory body.

[tab:International issues]

Regional and International Matters

Madam Speaker and Honourable Members, Uganda has continued to enjoy excellent relations with her neighbours and has continued to play a constructive role on matters of regional and international peace and security.  Within the East African Community the following were achieved:

(i) Since July 2010, the East African Community has become the first common market in the whole of Africa, making it a big milestone.

(ii) In November last year, the East African Community Summit agreed to embark on negotiating the East African Community Monetary Union.  This process is now underway and is expected to culminate into an East African Community Monetary Union Protocol by 2012.

(iii) The East African Community has continued to place great emphasis on Food Security in the region and the need to address the impact of climate change.

(iv) Uganda continues to participate in the negotiations under the COMESA-EAC-SADC Tripartite Free Trade Area Agreement, to boost trade in the Eastern and Southern Africa region.

(v) The East African Community partner states concluded a Protocol on Foreign Policy Coordination, aimed at strengthening regional collaboration and harmonization  through multilateral diplomacy, economic and social activities, as well as in diplomatic and consular matters.

(vi) Uganda hosted both Regional and International conferences during the year under review. Most prominent among these were the International Criminal Court Review Conference in June, 2010 and the 2010 AU Ordinary Summit.

(vii) Madam Speaker, Uganda will strengthen our relationship with the new State of Southern Sudan in terms of both security and trade.

(viii) In recognition of the meaningful contribution Uganda is making in the area of maintenance of international peace and security, the United Nations decided to expand its operations at Entebbe

International Airport by establishing a Regional Service Centre for UN peace-support missions deployed in the Region.  With the establishment of this Centre, a number of peace support functions hitherto carried out elsewhere in the region such as in the Democratic Republic of Congo,  Burundi and Sudan are being relocated to Entebbe.   Uganda is consequently benefitting a lot from this development in terms of procurements, employment, investment and tourism opportunities.

All the foregoing possible developments have been achieved because of the peace and stability the country has continued to enjoy.  It is therefore incumbent on all of us, to ensure that we do not carry out any activity that would tarnish Uganda’s image, thereby sending wrong signals to the regional and international community.

[tab:Police & Prisons]

Justice, Law and Order

Madam Speaker and Honourable Members, I wish to reaffirm Government’s total commitment to  the promotion and maintenance of the rule of law and order.  In order to strengthen the rule of law and order, Government has undertaken to carry out a number of activities, whose outcomes I share with you below.

Government’s  strengthening of the Police  has seen a drop in the national crime rate.  A total of 19 District Police Stations, 34 blocks of residential accommodation, eight (8) Anti-Stock Theft Unit Zonal Offices, in addition to the Police Training School at Kabalye, were constructed during the year under review.

Within the Police, the following specialized units have been established:

(i) Very Important Persons Protection Unit (VIPPU);

(ii) Field Force Unit;

(iii) Environment Police;

(iv) Aviation Police;

(v) Land Protection Unit; and

(vi) Integrated Highway Patrol Unit.

The Uganda Police Force has adopted Community Policing as a pro-active approach aimed at prevention and detection of crimes  such as terrorism, murders, iron bar attacks and child kidnaps.  Every Ugandan is a  stakeholder in fighting crime. Therefore each one of us should cooperate with the Police in this endeavour.

In addition to the operationalization of Mbale Regional Forensic Laboratory, as well as the near-completion of Gulu Regional Laboratory, construction of the Mbarara Regional Forensic Laboratory will soon commence.

Case disposal in courts   Over the past year, out of the 25,077 cases filed in the Courts at all levels country-wide, 23,683 were disposed of.  The launch and implementation  of the pilot CASE BACKLOG QUICK WINS PROGRAMME has resulted into a drastic reduction in the average length of stay on remand from 27  months in 2009 to 15 months in 2010/11.    The ratio of convicts to remands has increased from 44.4% to 47% countrywide; and in some cases, like Luzira Upper Prison, there are more convicts than remands for the first time in 28 years.

In order to address the challenge of  staff numbers in the Judiciary, the following actions stand out, among others:

(a) appointment of 10 Judges;

(b) recruitment of 700 prison warders and 45 cadets now undergoing training; and

(c) recruitment of 5,000 Police  Constables and 500 Officer  Cadets now undergoing training.

These recruitments will improve the warder-prisoner ratio to 1:4 from 1:5 previously, and the Police-population ratio to 1:709 from 1:786 in the previous year.

The establishment of Duty Free Shops  in both the Uganda Police Force and the Uganda Prisons Service has and continues to improve the welfare of the staff, especially those who want to put up houses for themselves. From the prisons farms, Government was able to save Shs 2.4 billion on feeding prisoners.

Under the settlement of statutory obligations, by the end of this Financial Year, a total of  Shs 52.9 billion will be paid in respect of Court Awards, Uganda Human Rights Commission Awards and Compensation (Exgratia Awards).

[tab:Immigration]

Another significant achievement is to do with increased efficiency in the Immigration Department. The acquisition of a passport now takes ten working days compared to 30 days previously.

During the coming Financial Year, Government will continue to build on the successes so far registered with a view to improving further the capacity and professionalization of both the Uganda Police Force and the Uganda Prisons Service.

The recommendation of the Judiciary to Parliament to increase the number of Judges of the High Court from 50 to 82; those of the Court of Appeal from eight to 15 inclusive of the Deputy Chief Justice; and of the  Supreme Court from seven to 11, will be considered.

[tab:Peace & Security]

Peace and Security

Madam Speaker and Honourable Members, while peace and security have been maintained, the country was faced with two unfortunate incidents last year:  the burning of the Kasubi Royal Tombs and the 11^th July terrorist attack on people who were watching and enjoying the finals of the World Football Cup.  The burning of the Royal Tombs destroyed a very important national and international cultural site; while the heinous attack by the terrorists left 76 people dead and 116 injured.

Madam Speaker and Honourable Members, I request you to stand up and observe a minute of silence in  memory of all those who lost their lives during those attacks.  May the  Almighty God rest their souls in eternal peace.

Government offered a moderate contribution towards the burial expenses of those who died and those who underwent treatment in the various hospitals in and around Kampala.   The suspects who were apprehended in connection with the terrorist attacks will be subjected to the due process of the law.

Government, in consultation with the Mengo establishment, agreed to set up a Commission of Inquiry to investigate and probe the evil act of the burning of the Kasubi Tombs.  The Judicial Commission of Inquiry under the Chairmanship of Justice Stephen Engwau  completed its work and has already submitted its Report.  The Report is going to be thoroughly studied to enable Government to decide on the next course of action. It will also be made public in due course.   I would like to express gratitude to UNESCO for its support in rebuilding this world heritage site.

The Uganda People’s Defence Forces (UPDF) has been equipped to reasonable levels, to enhance its fighting, mobility and deployability capabilities.    Besides the fact that the UPDF is currently a bi-service

Force, comprising of Land and Air Forces, with a higher Defence Headquarters, other specialized elements namely, the Marines and the Special Forces, have been created.  It is also worth appreciating that for some time now, the UPDF has built capacity to help the Police deal with internal riots and national disasters.

Madam Speaker and Honourable Members, I would like to advise those championing  riots in the name of protesting against high fuel prices and other commodity prices to stop.  The ulterior motives behind those riots are already known by all the concerned agencies of Government.

Consequently, any riots will be handled firmly and decisively, basing on the provisions of Article 43 of the  Constitution on the enjoyment of  fundamental and other human rights and freedoms.

Madam Speaker, I am happy to inform this August House that apart from the continued support to peace and security, the UPDF in its Five- Year Development Plan, will renovate  and rehabilitate the dilapidated national railway network.

[tab:Corruption]

Corruption

Madam Speaker and Honourable  Members, the NRM Government’s commitment to zero-tolerance of corruption remains strong and resolute.

The legislation and institutions that  have been put in place to fight it underline this resolve. The following achievements in fighting corruption are brought to your attention.

The Leadership Code Act, 2002 has been amended.  The Amendment Bill, which also makes provision for an Independent Tribunal as spelt out in the Constitution, will soon be discussed by Cabinet.

The Whistleblowers Protection Act, aimed at protecting those who volunteer information in corruption cases, was enacted last year.  The outcome of this legislation has been a great encouragement to the public in the fight against corruption.

The Anti-Corruption Court has been doing very well in handling corruption cases expeditiously.

Corruption being rampant in the procurement processes, the Public Procurement and Disposal of Public Assets Act is under amendment with a view to plugging the loopholes which have been used by the corrupt.

In the forthcoming Financial Year, the following will be undertaken:

(i) Intensification of awareness of the  public so as to enable it to participate effectively in the fight against corruption.

(ii) Enactment of the Anti-Money Laundering Legislation.

(iii) Passing of the Proceeds of Crime Legislation, to empower Government to confiscate the assets of the corrupt.

(iv) I will constitute a Committee to investigate political leaders and senior public officers implicated in corruption-related scandals.

(v) The IGG, DPP and CID will conclude all the investigations related to CHOGM funds. Where evidence has been compiled, prosecution of the culprits will be undertaken expeditiously.

[tab:Parliament]

Madam Speaker, I now report on the Work of Parliament. As it may be recalled, the 5th

Session of the 8th Parliament was convened on 4th June 2010.  It ended on 13th

May 2011.  During that period, Parliament was able to transact business as follows:

(i) Bills passed …………………………………………………………..22

(ii) Motions for Resolutions………………….……………………………34

(iii) Sessional Committee Reports presented ………………………….. 13

(iv) Ministerial Statements presented and debated …………………. 23

(v) Other Statements presented ………………………………………….. 06

(vi) Papers presented ……………………………………..…………………42

(vii) Questions for Oral Answer responded to ………………….………13

(viii) Other Business ………………………… ………………………………..02

The Bills passed included, among others:

(a) The Regulation of Interception of Communications Bill,

(b) The Kampala Capital City Bill,

(c) The Electronic Signatures Bill,

(d) The Public Procurement and Disposal of Public Assets (Amendment) Bill,

(e) The Institution of Traditional or Cultural Leaders Bill,

(f) The Emoluments and Benefits of the President, Vice President and Prime Ministers’ Bill.

I thank the 8th Parliament for what it was  able to accomplish.  Since there are quite a number of Bills still pending, my request is that the Business Committee looks at them with a view to sorting out the most urgent ones for prompt handling.

[tab:Public Service]

The Public Service

Madam Speaker and Hon Members of Parliament, the people of Uganda expect, and are indeed entitled to,  the best service delivery from public servants who are paid from public coffers.

With our policy of decentralization, most of the service delivery is by local governments.  Presently, the total amount of money allocated to local governments through Central Government transfers stands at Shs 1.47 trillion, which is about 26% of the total National Budget.  Ministries and local leaders must ensure that there is enough guidance, supervision and inspection so that there is  value for every shilling sent to local governments.  Honourable Members  of Parliament should take keen interest in what is going on in their constituencies as far as service delivery is concerned.

I have already sent specific instructions to the Rt Hon Prime Minister aimed at putting in place measures  for improved service delivery.  Coupled with this is the ongoing review of  Ministerial Structures, aimed at not only rationalizing the present structures, but at plugging any loopholes that have been undermining service delivery.

Madam Speaker and Honourable Members, one of the outstanding achievements in this area, is the payment of the massive pension arrears. These arose from the revision of pensions, to make them more meaningful, following the currency reforms of the late 1980s. Pension arrears also arose from non-payment  of dues to Ugandans formerly employed by the then East African Community when it collapsed in 1977.   Whereas Kenya and Tanzania paid their nationals, Uganda did not.  All those pensions have now been paid. Another source of pension arrears was the non-payment of pensions and gratuities to members who retired from the former armies or the families of those who have passed away. Finally, pension arrears accumulated from non-payment of pensions to those who were employees of various local governments in the country. Paying such pensioners should rightly have been the responsibility of those local governments.  Government took over the responsibility in response to the  outcry of the people concerned whose strong belief is that they worked for Government. They pleaded that the technical distinction between Central Government and local governments should not jeopardize what they believed was genuinely due to them.

Having cleared the bulk of those pension arrears, Government continues to receive and deal with residual cases as they come.  I have decided to bring out all these facts, in order to dispel rumours that have been peddled around, especially by those  in the Opposition, that the NRM Government does not care about pensioners because it had refused or had stopped paying pensions.  How odd! Rather than being blamed, the National Resistance Movement Government should be commended, not only for revising the pensions which had been negatively affected by the currency reforms, but also for taking over all pension obligations left by previous governments.

Government is conscious of the concerns about the low salaries and wages paid to public servants.  In due course Government, through the Ministry of Public Service, will come up with a Revised Pay Reform Policy which should address all issues related to pay which, among others, include:

(i) attraction and retention of scarce skills;

ii) unjustifiable pay differentials among persons with the same skills and doing similar jobs; and

(iii) special allowances for those working in hard-to-reach,  hard-to-stay areas.

Government will finalize the establishment of a Contributory Pensions Scheme to replace the present one which is non-contributory.

Government will also decide on the appeal by local governments to make the payment of pensions to employees of local governments a responsibility of Central Government.

[tab:END]

Conclusion

As I conclude this year’s State of the Nation Address, Madam Speaker and Hon Members of Parliament, I wish to reiterate that on February 18^th 2011, Ugandans gave the National Resistance Movement the mandate to run the affairs of this country for another five years.    The NRM Election Manifesto, which is in consonance with what is spelt out in Uganda’s National Development Plan (2010/11 – 2014/15), is now the principal agreement between the NRM Government and the people of Uganda.   It will be translated into policies and programmes for implementation every financial year.

The National Resistance Movement, the vanguard in restoring constitutionalism, democracy and  peace in this country, shall not support any schemes, which some individuals or groups would like to design, to get to power outside the constitutional framework.

Let us remind ourselves of the following provisions of the Constitution:

(i) Article 3 (i) “It is prohibited for  any person or group of persons to take or retain control of the  Government of Uganda, except in accordance with the provisions of this Constitution.”

(ii) Article 3 (4) “All citizens of Uganda shall have the right and duty at all times – (a) to defend this Constitution and, in particular to resist any person or group of persons seeking to overthrow the established constitutional order …”

Every Ugandan should always be conscious of the fact that nobody owes us a living.  Madam Speaker and Honourable Members, every Ugandan has the responsibility to actively participate in the socio-economic transformation process of Uganda; an  irreversible process that the NRM has set in motion.

For God and My Country.

Thank you.