{UAH} H.E Gen. Y. K. Museveni's speech at 17th COMESA summit in Kinshasa DRC

STATEMENT

BY

HIS EXCELLENCY YOWERI KAGUTA MUSEVENI
PRESIDENT OF THE REPUBLIC OF UGANDA
AND OUTGOING CHAIRPERSON OF THE COMESA AUTHORITY

AT
THE 17TH SUMMIT OF THE COMMON MARKET FOR EASTERN AND SOUTHERN AFRICA
HEADS OF STATE AND GOVERNMENT

Theme:
Consolidating Intra-COMESA Trade through Micro Small and Medium
Enterprise Development


KINSHASA, CONGO
26TH FEBRUARY, 2014

Your Excellency, President Joseph Kabila Kabange, incoming Chairperson
of the COMESA Authority
Your Excellencies, Fellow Heads of State and Government
Your Excellency, Deputy Prime Minister and Minister of Foreign Affairs of Kuwait
Your Excellency, Dr. Nkosazana Dlamini-Zuma, Chairperson of the
African Union Commission
Your Excellency, Dr. Donald Kaberuka, President of the African
Development Bank Group
Your Excellencies Ambassadors and High Commissioners
Distinguished Guests
Ladies and Gentlemen,

A modern economy is based on commercialized agriculture, industry,
services, ICT and an efficient public service. However, these cannot
thrive if you do not have a skilled workforce, a big market to buy
what you produce and good infrastructure, among other requirements.
This is where COMESA comes in. Following the Lagos Plan of Action in
1980, our leaders realized that the fragmented African markets could
not stimulate and sustain production on account of the political
balkanization of Africa. While the continent of North America has got
only 3 countries (the USA, Canada and Mexico), the African Continent
has got no less than 54 states. COMESA, ECOWAS, the Central African
States, SADEC and the EAC are the therapy for this problem. The
regional trading blocs, seen as a precursor to the continental trading
bloc, were a correct historical answer to this problem.

COMESA has done well. While in 2000 the volume of trade in COMESA was
US$3.3 billions, it is now US$19 billions. These initial good results
were in spite of the civil wars that were going on in some of our
states, poor infrastructure, especially inadequate electricity supply
and a myriad of Non-tariff barriers. In spite of these bottlenecks,
some of the rapidly growing countries in the world are in Africa. The
6 fastest growing economies in the world, according to IMF are: DRC,
Mozambique, Tanzania, Angola, Rwanda, Ethiopia, Zambia etc.

This is in spite of the bottlenecks mentioned above. Yet, much of our
potential is barely touched. Africa has a total land area of about
30million sq km, out of which 2.2million sq km is arable land. 25% of
the World's arable land is in Africa.

Besides, Africa has got the youngest population with 60% of our
population being youth. If we ensure that these are educated, skilled
and healthy, they will be a most powerful engine of growth.

However, as already pointed out, all this potential cannot be unlocked
without good infrastructures, especially roads, the railway,
electricity, ICT infrastructure, ports and piped water for, at least,
the towns. The World Bank has estimated that each year Africa needs
US$93 billion to cover the funding gaps for infrastructure. We must,
therefore, get new ways of funding this deficit. First of all, we
should ourselves exercise frugality and save money for infrastructure.
In Uganda, we have been having a battle with public servants
demanding higher salaries when little is done on the infrastructure.

By resisting these pressures, we have been able to fund or partially
fund new power stations, new roads and transmission lines. That is
what the Indians and the Chinese did in the 1950s, 1960s, 1970s etc.
By constraining wages, they were able to build infrastructure by
themselves. Who helped China to develop their infrastructure? By
having very good infrastructure, they were then able to attract
massive investments in manufacturing, services, etc as well as
generating their own funds for investments within China. This, of
course, was easier for them because of their huge internal market that
consumed what was produced but also enabled China to negotiate for
external markets on a reciprocal basis.
The constraining of wages also had the effect of making labour costs
in China being more competitive in attracting investments and also
manufacturing cheaper and, therefore, more competitive products.
Africa must be cautious of trying to imitate the Western Countries
who, in their heydays of being the aristocracy of the world, put wages
very high and, in the end, when they faced competition from China,
India and others, could not compete.
We should cut our coat according to our cloth. In one of our dialects
we say: "okwo omutwe guri, enshunju nikwo itegwa" - meaning the shape
of the head is the one that determines the hairstyle.

Nevertheless, apart from internal savings, in order to fund
infrastructure, we should have new ways of funding infrastructure -
using bonds, coupling self financing projects with the ones that have
got longer gestation periods in terms of infrastructure.

With the discovery of oil and gas in many of our countries, funding
infrastructure will not be a problem. In the 16th Summit we laid
emphasis on infrastructure.

Since that time, we have identified infrastructure projects in the
COMESA area that require US$53 billion. This includes the US$28.4
billion we are raising for the railways, airports, ports, roads and
border posts. Also US$31.4 billion is for electricity and US$630
million is for ICT. I have not studied whether these figures will
have a decisive impact on socio-economic transformation. This is
because, for instance, the kwh per capita of many of our countries is
still very low.

USA has got a kwh per capita of 14,000 when some of our countries have
got a kwh per capita of as low as 12 or 8. This is terrible.

In pursuit of infrastructure development in my term of Chairmanship,
we have participated in conferences in Yokohama (Japan), Dubai and
Kampala. We also used the BRICS and I used my visit to Russia when I
met President Putin to raise the issues of infrastructure in our
region. On the margins of the BRICS, I met the Chinese President Xi
Jin Ping to raise the same issues.

I wrote to both President Putin and Xi Jin Ping on that very subject.
All this was to try and raise funds for bankable projects. Your
Excellency President Kabila, could follow up these efforts. Efforts
should also be deployed with the Western countries such as the USA,
EU, Japan, India and Brazil. I am glad the USA has, finally, accepted
the idea of a USA-Africa Summit. There is also the forthcoming
EU-Africa Summit. Our strategy should be to emphasize infrastructure
development.

Yes, we can talk about other subjects dear to the Western countries
such as the homosexuals. However, even the homosexuals need
electricity. Hence, electricity, railways, roads, ICT, piped water
for, at least, the towns, education and health infrastructure must be
our priorities in whatever forum we are in. Those should be our
points of emphasis. We need a comprehensive COMESA infrastructure
design such as a railway line from East Africa to Kisangani, a railway
from East Africa to North Africa through South Sudan, a railway line
to Ethiopia from East Africa, a railway line to Rwanda and Burundi
and, eventually, to Zambia through Lake Tanganyika to Mpulungu. This
is what I have been talking about to the leaders from outside Africa
that I have met during my Chairmanship.
The other bottleneck we need to deal with is exporting raw-materials.
When we export raw-materials, we donate money to the outside and we
also donate jobs. I always use the example of coffee. By selling
coffee raw, you may get US$1 per kg. When it is processed in London,
the same kilo earns US$15.Therefore, in each kilo, Uganda has been
donating to the UK about US$10 for a long time.

This is if you exclude transport costs. Of course, when coffee is
roasted, ground and packed outside, the jobs are also exported.

The same goes for minerals. 62% of the world platinum is produced in
this region; 44% of the diamonds; 44% of chromite; 39% of manganese;
31% of phosphates; and 16% of gold. All these are exported in
unprocessed form. Minerals Benefication must be a region-wide, a
continent wide, policy to stop the historic exploitation of our
people. The export of raw-materials is the modern form of slave-trade
in Africa. We discovered oil in 2006. Up to today we have not dug
out that oil because of disagreeing with the oil companies that,
initially, did not want to build a Refinery. We rejected that policy
because we told the oil companies, that we had heard of a "rumour"
that there were human beings in the Great Lakes that needed refined
petroleum products.

We should discourage the comprador class that specializes in selling
foreign goods here and then also transferring our minerals and
agricultural products at very low prices while exporting jobs at the
same time by not adding value to our raw-materials.
Apart from infrastructure, we know that old school economics talks of
4 factors of production i.e. land (natural resources), labour (human
beings), capital and entrepreneurship. Recently, they added
knowledge.

You can see that our region has got 2 out of the 5, i.e. land and
labour. The other 3 are nascent if not absent. They, therefore, need
to be nurtured or attracted deliberately from outside. This is where
the small and medium enterprises (SMEs)come in. Affordable funding
for these must be worked out.

I want to inform the meeting that there are two modern kings: the
consumer and the entrepreneur. If somebody does not produce a
product, we shall be in shortage. If, on the other hand, sufficient
numbers of consumers do not buy a product, the enterprise will
collapse. Hence, the importance of COMESA. Even better, we recently
embarked on the Tripartite negotiations for linking COMESA, EAC and
SADEC. Uganda did not join SADEC because we felt that COMESA was
bigger than SADEC. The more buyers, the better. I am glad our
thinking is now converging on this point. Let the process be fast
tracked.

Finally, all this cannot happen without peace. Lack of peace in Africa
is a consequence of ideological, organizational and discipline issues,
sometimes complicated by external meddling. In other fora, like the
Great Lakes Conference, we have had occasion to discuss this
extensively. By addressing the above 4 elements we can have peace in
the whole area that paves the way for socio-economic transformation.

I thank you.