President Yoweri Museveni of Uganda has cautioned private sector investors on seeking quick returns from investments in national infrastructure.
The President gave the advice while speaking as the chief panelist on the subject “Agenda 2063: Infrastructure Update” at the opening of the World Economic Forum on Africa in Durban, South Africa.
The President pointed out that most African governments had agreed on private-sector led growth, which must be supported by infrastructure to ensure low cost of production, cheap electricity, affordable transport, cheap credit, among others.
“Good infrastructure projects, therefore, are those that do not result in high costs for the private sector,” said Mr Museveni.
“It is a bit of a contradiction. For example, if a government does a dam, the costs or tariffs tend to be low. But when the private sector undertakes a similar project, they charge high tariffs,” he said.
“For a project like a dam, it will last for 100 years, the private sector should not be in a rush to recoup their money. You can collect your money in 20 instead of 10 years. That will help our economies develop, they will be competitive.”
He blamed leaders who misunderstood the role of the private sector and at one point persecuted them.
“This was done through nationalization, where governments took over assets of the private sector but instead interfered with forces that should have helped them create jobs.
He said there was a need to marry political will with right strategies to achieve meaningful success.
“The political will has always been there. Many African governments have wanted to succeed since the 1960s. The problem has been ideological meandering, where you get one item and make it most important. For example, you emphasize education at the cost of others but what will happen to your educated people if they do not have jobs? They migrate,” said the President.
On strategy, President Museveni warned that singling out one element of development and hyping it at the cost of others, is detrimental.
“In the last 55 years, I have found out that taking one element and concentrating on it is not enough,” he said. “It must be infrastructure plus others like education, fragmentation of markets. You must ask, if you produce goods and services, who will buy? And is it sustainable?”
Still on the subject of electricity, President Museveni said with the exception of South Africa that produces 44,000 Megawatts of electricity, most of Africa was lagging on that front.
“And yet if you compare with Norway, a country of just 3 million people, they generate 26,000 Megawatts. We need to be serious as a continent. The USA alone generates 1.5 million Megawatts and yet even if we developed all our hydro capacity on all African rivers, we would generate not more than 360,000 Megawatts,” he said.
President Museveni, while encouraging Africa to find its own resources to fund its development projects, took a swipe at international funding agencies for being frivolous.
“You go for funding and they bring so many jokers. I hear they are creating a level ground for all bidders. Then a small one loses and appeals and this stalls a project for five years. Africa should find its own money. Pay less salaries and develop your infrastructure,” he counselled.
Ms. Nena Stoiljkovic, the Vice President of the International Finance Corporation, moderated the discussion.
The other panelists were Mr. Andrew Baldwin, a managing partner of Ernst & Young responsible for Europe, Middle East, India and Africa, Mr. Patrick Khulekani Dlamini, the Chief Executive Officer of the Development Bank of Southern Africa and Mr. Carlos Pone, the Chief Executive Officer of AECOM, USA
Panelist Khulekani Dlamini, the CEO of the Development Bank of Southern Africa, was all praise for President Museveni as one of the key drivers of the Central Corridor project, which links Tanzania, Uganda, Rwanda and Burundi.
“This has been one of our most successful infrastructure projects because the political leadership led by President Museveni backed us. The Presidents agreed that the project was critical and tasked their transport ministers to set up working mechanisms. It was agreed that ministers who failed would be fired,” he said, adding: “When you have the requisite political leadership, it happens.”