THE REPUBLIC OF UGANDA SPEECH BY H.E. Yoweri Kaguta Museveni President of the Republic of Uganda At the Official opening of the 44 TH AFRICAN INSURANCE ORGANIZATION CONFERENCE AT SPEKE RESORT MUNYONYO 22 nd May 2017 1
The President of the African Insurance Organisation; The Executive Committee of the African Insurance Organisation; The Secretary General of the African Insurance Organisation; The Prime Minister; Honourable Ministers; Your Excellencies Ambassadors and High Commissioners; Honourable Members of Parliament; The Board of Directors, Insurance Regulatory Authority of Uganda; The Chief Executive Officer Insurance Regulatory Authority of Uganda; All delegates; Distinguished guests Ladies and Gentlemen; 2
I warmly welcome you to Uganda for this 44 th African Insurance Organization (AIO) Conference and General Assembly. I wish to salute the insurance fraternity in Africa for upholding this noble tradition of holding the AIO conference a great sign of Pan Africanism, but most importantly for choosing Uganda to host it for the second time. I am proud to be associated with AIO, a forum where you discuss the common future of Africa and in this case enhancing economic growth by providing insurance against risks that would otherwise avert production and discourage entrepreneurship and innovation. As you are aware, whenever I attend such fora, I take the opportunity to discuss why Africa is still backward. I want to inform you that this is entirely 3
our fault. We have not yet used our tremendous, unequalled potential by converting it into strength. This failure has been on account of failing to detect the 10 strategic bottlenecks which I will share with you; 1. Ideological disorientation; 2. Attacking the private sector; 3. Inadequate infrastructure that causes the cost of doing business to be exorbitant; 4. An underdeveloped human resource i.e. an uneducated population which is also in poor health; 5. Fragmented markets that cannot stimulate and sustain large scale production by providing adequate demand; 6. Lack of industrialization and continuing to export unprocessed raw materials whereby we get much less money than those who convert those raw materials into final products and are also export jobs to other countries; 4
7. An undeveloped services sector which phenomenon under utilizes our huge potential in tourism, transport, banking, etc, etc; 8. Underdeveloped agriculture in Uganda, through research, we have discovered that farmers can produce 53 tonnes of bananas per hectare instead of the 10 tonnes the peasants have been getting in Brazil they are already getting 80 tonnes of Bananas per hectare per annum; 9. Lack of democracy; 10. Lack of ideology creating a Criminal State a State that, for instance, kills people extra judicially instead of upholding the dignity of the people and their inalienable rights. When we succeed in eliminating these 10 strategic bottlenecks, many of the African countries will be in good shape. The insurance sector is privileged that it has a role to play in dealing with all these bottlenecks 5
Given the state of insurance in Africa, it is expedient that, you, the insurance market players take stock of what has been done, accurately define the interests of our people, so as to be able to plan for the future of our continent from time to time. The efforts by continental bodies like AIO, should also be dedicated to protecting and promoting the private sector, infrastructural development, developing the human resource, expanding and integrating the African markets, supporting the continent s industrial efforts and developing the service sector (Insurance inclusive). The theme for this conference, Furthering the Financial Inclusion Agenda of African Nations through Insurance is very timely. The world s insurance industry is dominated by insurance companies all vying for a piece of Africa. I am glad that many delegates attending this conference are from Europe, Asia and as far as USA. 6
Africa has over a one billion people in 54 countries and yet there are low levels of uptake of insurance among the low income population. This state of affairs is attributed either to the lack of knowledge about insurance products, misunderstanding of the concept of insurance accounts, making a choice between fulfilling a basic immediate need versus signing a long term beneficial need. However, despite these challenges, there are tremendous growth and opportunities which the continent has for the insurance companies, globally. Africa has massive opportunities for insurance growth considering the region s highlights available; Angola: remains significantly underdeveloped and has immense potential for growth especially that insurance is dominated by the oil industry. Nigeria: 60% of insurance premiums are derived from the energy sector but still with a below 1% penetration level. 7
Ghana: the insurance market has seen positive growth and upward trajectory, with business insurance and life insurance taking the lead. The development of the oil and gas sector and a positive economic outlook is set to boost the insurance industry. Morocco: has the second largest insurance market in Africa. The continued success of Morocco s insurance industry is largely attributed to a welldeveloped banking system and government positioning towards foreign direct investment. Namibia: is among the better developed in Africa, boosted by foreign direct investment. Africa has and continues to improve in business environments and governments have become more welcoming to foreign investors. Kenya: the market is dominated by the non life segment accounting for 66.2% of the insurance premiums. Kenya s success has been attributed to its 8
drive for innovation compared to other African countries. In line with the theme for this conference, it is therefore important that as sector players you develop innovative ways that will entice consumers and devise newer strategies to penetrate even the underprivileged communities taking into consideration that most people in Africa are still poor and not yet convinced of the benefits insurance products offer and hold. Uganda: insurance market is young but growing steadily. With its penetration level still below 1%, the composite growth is at 21.58%. The industry has 29 Insurance companies (21 Non life & 8 Life), 1 Reinsurance company, 11 HMOs, 30 Brokers, 21 Loss Assessors/ Adjustors/ Risk Mangers, and about 1000 Agents. Opportunities in Uganda for investment; Agriculture: The issue of the fragmented African market has been resolved. Working with our 9
brothers and sisters in EAC and COMESA, we have created the regional market of 500 million people. We have also negotiated for access to the international markets (AGOA, EBA, the Chinese market, etc., etc.). In particular, government s intervention through the Agricultural Insurance scheme in Uganda, is meant to provide insurance premium subsidies to farmers who either directly purchase an agricultural insurance product or access credit through a financial institution. Any risk sharing model for financing must be based on a clear understanding of the profile and origins of the risks. In this case, I challenge you to resolve what continually constrains the modernization of agriculture in Africa and what makes small holder farming very risky for financing. Oil and gas: The Petroleum and Gas sector is moving well. We have agreed on the Refinery and the Pipeline. We are expediting the granting of production licenses so that the actual production 10
starts. The petroleum, through both the Refinery and the pipeline, will give us cash that will help us expand infrastructure (electricity, some of the roads, the railway, irrigation, etc.) and fund innovations and research. This petroleum and gas should be flowing by 2019/2020 latest. Much of the work has been accomplished in this area: exploration, the discovery of the petroleum and gas, agreeing on the pipeline, training our scientists, etc. I am also glad that our local players have an Oil and Gas syndicate where risks worth about 10% of the insurance business will be underwritten. The remaining business will be taken up by established foreign firms. This is a business opportunity for many of you who have expertise in this particular sector. Health: With countries in the region already having health insurance schemes, Uganda will soon follow suit, albeit being the last East African country, to introduce the National Health Insurance Scheme. The sources of financing for health shall be contributions from Government (40.7%), health insurance 11
contributions (52.9%) and direct income (6.4%). The proposed plan will have the scheme financed by 4 percent monthly contributions from an employee s earnings, with the employer contributing an additional 4 percent. Health schemes have not only been limited to middle income countries such as China, India and South Africa. In Africa, economies Ghana and our neighbor Rwanda have shown that national implementation of a universal health coverage policy are followed by efforts to expand social protection through the use of insurance. The potential for Africa is huge. The opportunities are plenty. The future is ours if we sort out what needs to be done. Africa shall not continue to tempt the greedy by being weak. Rule of law and peace: The NRM Government has restored the rule of law after decades of misrule. We have restored enduring peace throughout Uganda and are now on the journey to promote sustainable development and prosperity. 12
Our government remains focused on the continued strengthening and harmonization of the legal, policy and regulatory environment to spur the national transformation processes and goals. In line with the NRM Manifesto in the past, now, and current party platform for 2016 2021, we remain committed and focused on laws that enhance stability, peace, productivity, growth and employment; as well as laws that improve Uganda s regional and global competitiveness for accelerated socio economic transformation. In conclusion, I would like to thank the African Organisation and the insurance fraternity in Uganda for organizing this continental platform meeting. I am looking forward to concrete decisions and recommendations that our countries can adopt and advance. 13
I wish you all good deliberations and declare the conference open. I thank you. 14