With His Excellency John Pombe Magufuli, president Museveni laid a foundation stone to mark the start of construction of the crude oil pipeline from Hoima to Tanga in Tanzania.
President Museveni made this remarks:-
“I thank our Tanzanian brothers and all stakeholders for organizing the colourful function at Chongoleani in Tanga, Tanzania.
This is a great event not just for the two countries but entire East Africa. This pipeline is not just for Uganda’s crude oil, it is an East African pipeline.
There are already hydrocarbon resources in Eastern Congo, Turkana and possibilities in Tanzania, Rwanda and Burundi. All these can be served by this pipeline.
In Uganda’s case we have 6.5 billion barrels of oil so far in 40% of the potential area. We shall have a refinery to produce petrol, diesel, aviation fuel, other petro-chemicals like plastics and associated gas for electricity and composite agriculture.
Tanzania already discovered large quantities of natural gas. Uganda needs this gas to process ore into steel for our big infrastructure projects. Imported steel makes our projects expensive. East Africa imports $1.3b worth of steel which must stop.
We thank the Tanzanian government for making the several concessions that ensured this pipeline project happens.
These include no corporate tax, no VAT, free corridor for pipeline, depreciation tax holiday for 20 years and possibility of acquiring shares in the pipeline.
These enabled us arrive at the cost of $12.2 per barrel, which even at the current world prices of oil ($50 per barrel) would still translate into a profit for us.
There will be other benefits from the project like supplies (cement, etc) and other activities that will compensate for and exceed the waived taxes.
East Africa has a spectrum of resources, however, it’s the human resource, the 170 million people, who are the greatest resource.
They are consumers, for example, East Africa today imports $33b worth of goods and services yet it’s exports are just $13.8b.
This is wealth we donate to other countries (EU, US, Japan, India, Russia etc), giving them jobs, bigger tax base, improving their technology, utilities and enhancing their prosperity in general.
The numbers also help us negotiate credibly with bigger markets of EU, USA, China, India, Russia. The human resource is therefore resourceful in the forward thrust of our economies.
I am therefore convinced that East Africa and certainly Uganda is unstoppable now. We have everything. Nothing will stop us from growth, development and transformation.
The other issue is our strategic security. In the last 500 years Africa suffered calamities. From slave trade, colonialism, neo-colonialism, genocide, instability, which all caused hemorrhage.
Political fragmentation aided these calamities. Our chiefs just watched or aided the Europeans to take slaves and colonise us. Our Independence leaders (Nkrumah, Madibo, Nyerere) guided us well.
Economic integration alone was not enough. Political federation is the therapy for our very survival. I have been a disciple of this gospel since the 1960s.
During the World War Two, it’s the highly industrialised but small countries like Holland, Czechslovakia, France that became Hitler’s first victims. It took the mighty states of Russia, USA to stop Hitler. We must then ask; what is East Africa’s insurance policy?
If Africa was a house, the fragmentation would mean the sitting room would be in one country, bedroom in another, courtyard in a third country, etc. It’s what makes execution of some of these projects difficult.
For example, we have been trying to build a power station on the Kagera but we had failed until recently Dr Magufuli agreed and we shall now build it.
I thank Tanzania for this positive collaboration on the pipeline and ask that we do more collaborations. I look forward to HE Magufuli’s visit to Uganda where he will lay a foundation stone in Hoima.
Finally, this town of Tanga is important to Uganda. In 1972, the Kikosi Maluum group of Ugandans under Milton Obote landed here from Sudan before moving to Handeni to set up base.
I also remember smuggling 14 guns through here to Tanzania during our Liberation struggle.
I thank our partners, Total E&P, CNOOC, Tullow for taking up this effort after our own technocrats had done the right work. We can have a win-win formulae with the partners if we engage honestly. I thank you.