After a State of the Nation address that had few surprises, attention now shifts to how much of what Uganda’s President Yoweri Museveni promised will be reflected in the national budget speech this week.

Against the backdrop of a relatively stable macroeconomic environment, President Museveni’s address was strong on the production sector, but skimpy on the challenges facing the social sector, the faltering war against corruption, and the engagement of Ugandan forces in foreign wars.

As he opened the fourth session of Parliament on June 5, President Museveni was presiding over an economy that, although performing below initial expectations, is still doing better than last year.

Growth was projected to close the year at 5.7 per cent, 0.6 percentage points above the rate achieved in the last financial year; core inflation has been reined in from 5.8 to 3.3 per cent, and, after a few months of uncertainty, the shilling is currently stable against major currencies.

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Power supply has increased with the commissioning of the 250MW Bujagali power project, but remains costly ranging between $0.12 for large industrial users and $0.17kwh for medium scale industrial users; this is above the $0.04 kWh that President Museveni had said is necessary for Uganda to attract industrial investors.

“We are determined to provide electricity for manufacturing at $0.04 per unit, whatever the challenges. This is what I agreed with the coffee processors and the new textile manufacturers who are beginning to flock into the country as the factories migrate from China on account of the rising labour costs there,” he said.

More investment will go into strategic infrastructure such as electricity and roads; they took more than 30 per cent of allocations this financial year.

Job creation remained sluggish, with the services sector that accounts for 45 per cent of GDP employing just 2.6 million people in total; industry, which is growing at 5.6 per cent annually, employs just 841,704.

To create jobs, more needs to be done to improve agricultural productivity, bring down the cost of doing business for manufacturers, and stimulate ICT’s and the services sector.

Agriculture, President Museveni said, grew by 1.5 per cent this year, despite challenges such as high input costs, low levels of irrigation and fertiliser use and poor management skills by farmers.

Growth of the sector was also slowed by the 68 per cent of households that produced at subsistence level, according to year 2002 census data.

“If all these homesteads were converted to commercial farming, agriculture would be much bigger,” President Museveni said, promising a raft of irrigation projects and ensuring better conveyance of resources from the state to end users.

“The problem is not shortage of money. The problem is shortage of reliable agents for conveying it to the people,” he added, referring to the failure of government programmes such as the National Agricultural Advisory Services (NAADS) to transform agriculture.

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“NAADS, which has been given huge resources to do this, spends most of the Ush203 billion ($78 million) we give them each year on salaries and seminars. They only spend Ush57 billion ($22 million) on buying materials for planting and breeding. We are determined to totally restructure NAADS in the coming financial year,” the president said.

While President Museveni’s focus on the production sector attracted approval from economists and the private sector, opposition politicians faulted the address for not being detailed enough on the actual state of the nation, especially the problems in health and education as well as the status and plan for Ugandan troops currently engaged in wars in Somalia, South Sudan and the Central African Republic.

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“Uganda’s problem has been having a big head and stunted legs. So as the president lays emphasis on agriculture, it is a welcome shift that he is also paying attention to getting value for money. I hope the same tone runs through planning and we get to see it reflected in the budget next week; the challenge has been the huge gap between intentions and resource allocations to support them in the budget process,” said Prof Augustus Nuwagaba of Reev Consult.

Gideon Badagawa, the executive director of the Uganda Private Sector Foundation, agreed.

“The State of the Nation address, for the larger part, met our expectations. The focus on wealth creation and the specific emphasis on agriculture, tourism, manufacturing and energy is welcome because these are the sources of not just job creation but improvements to household income.

“It was also good to hear both the Speaker and the president speak about the counterfeit law that has been with parliament for the past 10 years. It would have been good to hear the president say something about the plight of Ugandan traders owed money by the South Sudan government, and a more robust plan for addressing the deficit in education because although we have invested in hardware in those areas, the software is still lacking,” Mr Badagawa said.

Kristian Schmidt, head of the EU delegation to Uganda, said the country also needs a plan for improved access to agricultural credit.

“For agriculture to take off, you need more than the skill of the farmers; there is a need for access to credit,” he said.

The opposition was quick to single out Museveni’s failure to give updates on the UPDF.

“In the one and half-hour presentation, he never mentioned the role Uganda is playing in South Sudan or in Somalia. He never mentioned what the government is doing to deal with disasters in the country,” said opposition chief whip Cecilia Ogwal.

Although President Museveni spoke at length about the need for effective management of the environment, he had also been expected to address climate change and give a roadmap for fighting corruption that has undermined the performance of government programmes.

“He has addressed more of what we are going to do as a country, yet we are interested in the state right now. I was in Ibanda and saw the state of the roads is good, but we need to look at balanced development. Ibanda’s hospital and schools are in a sorry state, yet the road is good,” said Prof Venansius Baryamureeba, the vice chancellor of Uganda Technology and Management University.

Prof Baryamureeba said President Museveni needed to address the issue of skills development in the education system. “ICT’s may be good, but people do not have good laboratories to impart the skills. Most of our institutions lack good facilities and as a result they produce graduates who are not adequately skilled,” he said.

Reported by Michael Wakabi and Halima Abdallah