Yesterday, President Museveni handed over the Chairmanship of COMESA to the President of the Democratic Republic of Congo, Joseph Kabila Kabange at the 17th COMESA summit of heads of State and Government of COMESA.
The 17th COMESA summit was under the theme “Consolidating Intra-COMESA Trade through Micro Small and Medium Enterprise Development.”
In his handover speech, President Museveni said that 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
Below is President Museveni’s speech.
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 Tripatite 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.