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Cablegate: Ugandan President Decries Eac's Infrastucture Needs

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RR RUEHGI RUEHRN RUEHROV
DE RUEHKM #0588/01 1200735
ZNR UUUUU ZZH
R 290735Z APR 08
FM AMEMBASSY KAMPALA
TO RUEHC/SECSTATE WASHDC 0267
INFO RUCNIAD/IGAD COLLECTIVE
RUEHXR/RWANDA COLLECTIVE
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 KAMPALA 000588

SIPDIS

SIPDIS
SENSITIVE

STATE PLEASE PASS TO USTR FOR WILLIAM JACKSON
TRANSPORTATION FOR D/S BARRETT, S. MCDERMOTT, AND C. HUNTER
TREASURY FOR VIRGINIA BRANDON AND DAN PETERS
NAIROBI FOR FCS J. SULLIVAN

E.O. 12958: N/A
TAGS: ECON PREL ECIN EAID ENRG ETRD PGOV UG
SUBJECT: UGANDAN PRESIDENT DECRIES EAC'S INFRASTUCTURE NEEDS

REF: (A) KAMPALA 475

1. (U) SUMMARY: President Yoweri Museveni opened the "First
Strategic Retreat for East African Community (EAC) Ministers" on
April 17 by reminding his audience that China, which lacked
political freedom, was nevertheless booming economically. He
decried the EAC's infrastructure deficiencies, including transport,
energy, and information technology, and told local political leaders
to figure out, and deliver, what Africa needed for economic growth.
END SUMMARY.

2. (U) Department of Transportation Deputy Secretary Admiral Thomas
Barrett, U.S. Trade and Development Agency (TDA) Director Larry
Walthers, and Millennium Challenge Corporation (MCC) Vice President
for Policy and International Relations Maureen Harrington attended
the EAC Strategic Retreat on April 17. Their objective was to sign
a Memorandum of Cooperation with the EAC Secretariat for a
transportation conference in the U.S. with EAC transport and
infrastructure ministers and U.S. transportation officials. (Note:
The East African Community includes Kenya, Tanzania, Burundi,
Rwanda, and Uganda. All five countries sent several ministers to
the retreat. End note.)

3. (U) After tossing aside the 15-page speech he had planned to
deliver, Museveni asked the audience why Asian countries had "taken
off economically," while African countries had remained stagnant for
over 40 years. He said that those who suggested that a "lack of
good governance" was holding Africa back were ignorant. China,
after all, had never held national elections, and that country had
become an economic powerhouse of 1.3 billion people with over ten
percent growth per year, he noted.

- - - - - - - - - - - - - - - - - -
Africa Needs an Energy Renaissance
- - - - - - - - - - - - - - - - - -

4. (U) Museveni lamented the pitiful amount of electricity
available to Africa's 900 million people, as compared to the U.S.'s
total capacity of 800,000 MW for its 300 million people. Uganda
alone has less than 400 MW of total capacity, not nearly enough to
supply the local growing energy demand. (Note: Maximum output on a
given day is around 180 MW. For the first several hours of the EAC
retreat, the conference facility had no power. End note.) Museveni
estimated that there could be an additional 4000 MW of hydropower
generated from the Nile. He asked Energy Minister Daudi Migereko,
who was present at the speech, to estimate Uganda's demand growth.
Migereko, clearly not expecting to be called on, stood up and
responded with some discomfort that Uganda would need an additional
48 MW per year in order to meet demand growth. Museveni countered
that Ugandans consumed 40 billion cubic meters of wood each year to
meet their energy needs, which was the equivalent of 20,000 MW of
electricity.

- - - - - - - - - - - - - - - - - - - - - -
Uganda is "Bashir-locked," not land-locked
- - - - - - - - - - - - - - - - - - - - - -

5. (U) According to Museveni, Uganda is not land-locked, but
"Bashir-locked." He explained that the Nile River leads directly to
the Mediterranean Sea, but the President of Sudan, Olmar Al-Bashir,
forbade river transportation through his country. Overall,
infrastructure, which affected the cost of doing business, needed to
be improved throughout the region. According to Museveni, the
railway that runs from Kenya through Uganda should be in a museum,
and replaced with a railway that connects from South Africa to
Ethiopia.

6. (SBU) Museveni said he had just learned that there were two
types of roads: "poor country roads" and "rich country roads." He
realized this on a recent trip to Ghana, where he drove on a road
that had not been replaced in 50 years. When he asked how this was
possible, as Ugandan roads only lasted a maximum of 15 years, he was
told that it was a "rich country road," which were no longer built
in Africa. He called on Minister for Public Works and Transport,
John Nasasira, also present at the speech, to start building "rich
country roads" instead of "Nasasira, or poor country, roads."
(Note: Minister Nasasira is the longest serving minister in
Museveni's government, and is known for hugely inflated road costs
and shoddy work. End note.) He also urged Public Works Ministers
from other EAC countries to inform their political leadership of the
different road types.

7. (U) Museveni thanked the U.S. for its assistance to regional air
safety standards. He criticized the high cost of air transportation

KAMPALA 00000588 002 OF 002


despite efforts to increase competition and liberalize the sector.
He called on the East African Development Bank (EADB) to assist
infrastructure development and suggested that the donors work
together to support large regional infrastructure projects.

- - - - - - - - - - - - - -
"I Could be a Billionaire"
- - - - - - - - - - - - - -

8. (U) Market size was a major impediment to growth, Museveni
added. He said that if he were operating "his small businesses" in
India, he would be a billionaire. (Note: Museveni has some dairy
farms in western Uganda. End note.) "Demand equals desire plus the
ability to pay," according to Museveni. The region had plenty of
desire but lacked the ability to pay, he stressed. East Africa has
a population of over 100 million "fragmented" people, and a total
market size of just over USD 50 billion, as compared to the United
Kingdom's market of USD 1.5 trillion, with only 60 million people.
Museveni noted that India earns USD 40 billion, slightly less than
East Africa's combined GDP, each year by outsourcing data processing
and call centers. Without broadband capabilities, and improved
English training (he imitated a Ugandan child speaking
incomprehensible English), the country could not capitalize on this
potentially lucrative opportunity.

- - - -
Comment
- - - -

9. (SBU) Museveni's candid speech reiterated his long-standing
analysis of regional solutions to infrastructure problems among
individual EAC member states. His proposed solutions, such as
calling on the EADB and donors to fund infrastructure projects, were
less impressive than his description of the problems. Museveni's
public jibing at his two ministers present at the meeting might
suggest that he expects action, but his continued tolerance of the
incompetent and corrupt Public Works Minister belies his words. End
Comment.
BROWNING

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