Kampala, May 2, 2008 - Ugandans should take advantage of the soaring prices by churning out more produce to push forward the Prosperity for All programme, President Yoweri Museveni has said.

Speaking at Kololo airstrip during Labour Day celebrations yesterday, Museveni played down critics who on the radio claim that his Government's failures had caused food prices to skyrocket.

He attributed the high prices to the increased percentage of rich people in the world, including Ugandans, and the expansion of Uganda's market to South Sudan and Eastern Congo.

The rich who used to live mainly in Western Europe, Canada, the US and Japan have spread to China, India, Africa and Kampala, he explained. Consequently more people live affluent lifestyles.

"Even you here in Kampala are driving so many cars. By driving so many cars causing traffic jam, you are contributing to the rise of prices. It means steel and petroleum prices will go up. More cars mean more petrol, more demand and higher prices."

In 1986, only 40,000 cars plied Ugandan roads. Today the number has risen to 500,000, he noted.

Giving the example of himself as a cattle farmer, Museveni said from the beef he supplies to Kampala he used to earn sh1,800 per kilo. Because of the demand in Juba he now gets sh2,500.

"We should benefit from the high prices by getting into production. The high prices are to our advantage as farmers. Instead of roaming in the capital city, spreading rumours and crowding 'bimeeza' (radio talk-shows) you should be in your gardens."

He termed as liars those who accused the Government of being responsible for the high prices and warned of an imminent crack-down on radio stations where presenters spread such reports.

"The liars are shameless. They are enemies of the country. If you are ignorant about something, keep quiet."

When the NRM took power in 1986, the economy was on its knees with no production in industries, he recalled. Today between 400,000 and 500,000 tones of cement and 200,000 tones of sugar are produced annually, while over 600MW of power is being generated, up from 60MW in 1986.

"How can you say that the Movement has failed? Production has gone up but even demand is high," the president said. "In 1986 there was no load-shedding. 60MW was enough for lighting because there was no production."

Museveni, however, noted that because the high prices affect the cost of living of the urban working class, their plight would be looked into.

On the Bujagali dam project, the President instructed the police chief, Maj. Gen. Kale Kayihura, to hunt for workers who steal construction materials. He also told him to deploy screened cops at the site in Jinja.

Speaking about national security, Museveni reiterated that nobody can destabilise the country again. He wondered why mediators and elders from the North were begging LRA leader Joseph Kony to sign the peace agreement.

"Kony can come out if he wants. If he doesn't, he will come in another form," the President commented.

The national celebrations at Kololo were characterised by a guard of honour and march by police, prisons and workers from production and service sectors.

David Nkojjo, the chairman of the National Organisation of Trade Unions, decried the absence of a minimum wage and the lack of a comprehensive employment policy.

He called for the establishment of a labour productivity centre to ascertain the causes of low productivity of Ugandans. The trade union boss urged Museveni not to approve the Local Service Tax, which was passed by Parliament recently. He said the tax was a replica of the graduated tax the President abolished. Nkojjo said local governments could be funded with an indirect tax by increasing VAT by 1% or cutting 1% from the current 18% and distribute it to local governments.

He also called for the retention of NSSF as the basic mandatory workers savings scheme.

In reply, Museveni said Uganda, as the only country without a minimum wage in East Africa, was the fastest growing economy in the region.

He also rejected equating the Local Service Tax to the abolished graduated tax. While graduated tax was for all people, regardless of whether they were employed or not, the local service tax targets people with income only, he explained.

Museveni ruled out the privatisation of NSSF, saying the Government could not privatise what it did not own. What was being considered was the liberalisation of the pension sector to break NSSF's monopoly, he clarified.