Museveni says poor transport mix costs Uganda $1b a year, sets out rail and pipeline plan

ENTEBBE — Uganda’s reliance on roads to carry almost everything is draining about $1 billion (roughly Shs4 trillion) from the economy every year, President Yoweri Museveni has said. He announced plans to move heavy freight onto railways, pipelines and waterways.

Museveni made the remarks on Friday at State House, Entebbe, where he addressed celebrations for Uganda’s 64th Independence Day. He used the Luganda word “katogo”, a dish of mixed ingredients, to describe a network in which fuel tankers, cargo trucks and passenger vehicles all share the same roads.

“We have calculated that we lose about $1b each year by this katogo transport,” he said.

The problem, according to the President, is that the economy has grown faster than the transport system has been organised. That has left roads congested and wearing out quickly under heavy trucks.

Under his plan, petroleum products and bulk cargo would increasingly travel by rail and pipeline, while roads would carry mainly people and lighter goods.

Museveni gave the cost of moving a single container between Uganda and the port of Mombasa as an example. He put the cost at roughly $3,600 by road, against about $1,600 by rail.

He said work on the old metre-gauge line had already restored service from Kampala towards Malaba, Gulu and Pakwach. The next steps, he said, include extending the Standard Gauge Railway from the Kenyan border across Uganda to Mpondwe, and on to the Rwandan border through Ankole.

He also listed a planned railway from Tororo to Nimule on the South Sudan border, a lake transport route to Mwanza in Tanzania, and a rail line in Karamoja to haul minerals such as marble, limestone and gold.

The President used the same address to respond to the recent fall in the shilling. He blamed a drop in dollar inflows, which he linked to conflict in the Gulf, drought, the effect of Ebola on tourist arrivals, and portfolio investors moving their money to markets with better returns.

He said the shilling’s slide was to be expected. A weaker currency, he argued, would raise exporters’ shilling earnings even as it made imports dearer.

Museveni said he did not support the Central Bank Governor’s position that Uganda should draw down its foreign exchange reserves to prop up the shilling. He argued instead that the country should import less of what it does not need.

He put inflation at about 4% and blamed high pump prices on continuing global conflicts and disruption to oil markets. “The situation hasn’t settled down,” he said.

On industry, Museveni said Uganda spends about $500 million (about Shs2 trillion) a year on imported steel, even though it has its own iron ore. He said the government plans steel plants in Kabale and Tororo. He also defended the ban on exporting raw minerals, saying the country had been losing value by selling unprocessed gold and tin abroad.

He urged opinion leaders to find out why a third of Ugandans are still not earning regular cash incomes. By his figures, the share of the population in the money economy was 9% in 1962, 32% in 2013 and 61% in 2019 after Operation Wealth Creation, and now stands at 67% under the Parish Development Model.

Museveni traced the country’s economic path from the conflict years before 1986, when he said copper, cotton and tourism collapsed and tea output dropped from 23 million kilogrammes in 1970 to three million. He said tea production has since climbed to 60 million kilogrammes and coffee from about three million to nine million bags.

He said agriculture had moved well beyond the old export staples of coffee, cotton, copper, tea, tobacco and tourism, with milk, maize, beans, fruit, bananas, millet and fish now traded commercially. The government is also pushing processing of cotton, milk, bananas and coffee. He said future growth would depend more on science and technology, citing electric vehicles, medicines and computers.

According to Museveni, the economy has grown from about $3.9 billion in 1989 to $69.3 billion as of June this year, and is projected to reach close to $74 billion by June 2027. He said the recent drought showed that irrigation must be expanded to shield farmers from the weather.

Vice-President Jessica Alupo credited Museveni with promoting teamwork and women’s inclusion. She said the government’s Ten-fold Growth Strategy, built on agro-industrialisation, tourism, minerals, and science and technology, would carry the country towards a $500 billion economy.

Minister for the Presidency Milly Babalanda described the 1962 handover as only the first step in Uganda’s liberation. She said Museveni was now leading the push for economic and strategic independence.

Twenty Ugandans, six of them women, received national medals at the ceremony. Museveni was decorated with a Uganda Prisons Service medal for his role in developing the service.

Other recipients included Commissioner-General of Prisons Canon Dr Johnson Byabashaija, Kampala Parents’ School founder Edward Kasole Bwerere Lwanga, Deputy Air Force Commander Maj Gen David Isimbwa and Chief of Staff of the Land Forces Maj Gen Francis Bagonza.