aBi Trust, an agriculture investment fund in Uganda has revealed plans to step away from just offering grants to more sustainable services such as loans. These remarks were made by Josephine Mukumbya on the second day of the Uganda Agriculture Financing Conference. Among its future plans, the aBi Trust will progress to offering improved integration of services as it seeks to attain sustainability. There will also be a more structured approach to agribusiness knowledge with aBi trust planning a one-stop centre for agribusiness information. Above all, the Trust will broaden its prospective and include more middle income upcoming agripreneurs. Mukumbya also explained that as far as sustainability is concerned, the fund will promote socially responsible investing. "We are also keen on social responsibility investment in terms of environmental, audit, and gender among others,"she explained. aBi Trust has 63 partners in value chain development and 18 partners especially finan...

Deloitte and PearlCapital have revealed that Uganda will be the lucky recipient of a $30 million agribusiness investment fund in 2016. The fund code-named; "Small and Medium Agribusiness Development Fund" is targeting 20-30 SMEs in Uganda. Speaking about the fund, Tom an official from PearlCapital revealed that additional employment and improved access to markets for 26,000 will be the target impact metrics.  PearlCapital has invested in substantial seed companies among which is  KK fresh produce and Bee Natural Uganda. Their model is to invest risk-capital in the sector while working actively with the investees.  "Although we are an impact investing business, we measure our success depending on a number of metrics such as employment but we also consider the financial criteria. We structure our investment to give our invests the best chance of success but also ensure best ROI for our investors," PearlCapital clarified.  Quick Summary of the Fund...

Dr. Louis Kasekende, the Deputy Governor of Bank of Uganda made interesting remarks at the launch of the 2015 Agricultural Finance Yearbook. Here are some of the highlights of his speech as Guest of Honour.  Budgetary resources are scarce, investment is prioritised on goods/services that benefit the public for example extension services.  Public expenditure on goods and services particularly on  research and extension services must be increased. Farmers need a holistic support package of improved seeds, provision of fertilisers etc and not limited to just finance  If we are to solve the problem of unemployment in Uganda, we must focus on Agriculture. 

Judith Bakirya, a farmer and a discussant at the launch of the 2015 Agricultural Finance Yearbook has called upon for focus on smallholder farmers. In her view, success in the agricultural sector will only be realised when banks and the stakeholders at are understand the mindset of the smallholder farmer.  “The reason mobile money, phone, and bodabodas are succeeding in Uganda is because they're individual and small,” Bakirya noted. “We need to change the mindset. A smallholder farmer is individual and small. How do we build on a farmer who works 80 percent?” She challenged the audience.  Bakirya further opined that for a smallholder farmer, a hoe does 80 percent of the work and the role of stakeholders was how to help them improve. “Without understanding smallholder farmers, products will come and go (without making impact),” she warned. 

The former Finance Minister of Uganda, Gerald Ssendaula has asked government and donors to increase funding allocations to agricultural research in the country. Ssendaula was speaking as one of the panelists at the launch of the 2015 Agricultural Finance Yearbook at Speke Resort Munyonyo. In his deliberations, Ssendaula said Agriculture was a sector the country couldn’t afford to give a row deal. “Agriculture pays when given the attention it deserves,” he explained. “If Uganda was importing food, the economy would be in shambles.”  Ssendaula said there was need for farmers groups in order to have collective bargaining while negotiating credit. Strongest of all, Ssendaula affirmed the need for research in the sector. “Research is key if Uganda's agriculture is to move to another level. Our coffee was attacked by wilt, it took more than 20 years to come up with replacement varieties due to lack of research,” said Ssendaula. Ssendaula had no kind words for those who formed...

Sugarcane production trends show that Uganda’s output has been increasing in recent years, but challenges such as quality still exist. Dr. Ibrahim Okumu while speaking about contract farming in the Ugandan Sugar Industry highlighted some of these challenges. “The challenge for sugar factories is quality supply by out growers. Warnings, fines are issued for non-compliance,” said Okumu a lecturer at School of Economics at Makerere University. Sugarcane production in Uganda also continues to rotate around the three big players of Kinyara, Kakira and Lugazi that account for 85 percent of production. In areas like Busoga where sugarcane has been grown for longer periods, not much of a difference has been witnessed in the lives of the growers. “The Basoga have over the years grown sugarcane. But they  are still trapped in poverty.  Where is the problem?”asked Okumu. “The Basogas grow sugarcane but it has not taken them out of poverty due to underlying sector pitfalls.”  ...

When faced with the question of whether agricultural businesses in Uganda are bankable, a number of mixed answers and arguments have been highlighted. According to Asaph Besigye, one of the authors of the Agricultural Finance Yearbook 2015, risk is the major reason banks give from opting out of funding agricultural businesses. Many of these businesses are termed as bankability deficient.  Bankability is a connotation that has been used to describe capacity to attract and support commercial financing. As such, because agricultural businesses are considered less profitable, commercial lenders in Uganda assume them to be non-bankable. “The concerns of the finance institutions to Agricultural finance is risk (profitability),” Besigye pointed out. “Are financial institutions bankable policies relevant, flexible and in tandem with agricultural sector?” he rhetorically asked. “It’s not that there is no demand for agricultural finance but there is a divide in understanding bank-abilit...

The Executive Director of Economic Policy Research Centre, Dr. Sarah Ssewanyana has decried the lack of funding in the Agricultural Sector, urging the government to walk the talk. “The ministry of Agriculture Industry & Fisheries is underfunded,receives only 3 percent of the national budget,” she noted.  She also pointed out that although the sector has been a major beneficiary of tax exemptions in the past 15 years, the sector has under performed in the past five years. She pointed out that the sector had under performed in both industry and services.  “Agriculture Finance has been termed as policy orphan given  the  rarity of policy  frameworks dedicated to agriculture finance,” Dr. Ssewanyana further explained. On the Agricultural finance year book, she said that it highlighted challenges in the commodity value chain. She warned that limited agriculture financing has wider economic implications on Uganda. In her concluding remarks, she obser...

Hon. Matia Kasaija, the Minister of Finance has this evening asserted that the collaboration between Government and the Economic Policy Research Centre won't compromise its independence. This was in response to Dr. Sarah Ssewanyana's concerns that government may want to compromise the Centre's independence. In reiteration, the Minister noted that government is supportive of the Centre's autonomy. "The interaction between EPRC and the government doesn't affect the autonomy of the Centre," said the Minister. "My ministry respects the operational autonomy of the Centre to guarantee innovation and independence from vested  interest." The Minister however shared a few concerns and called upon EPRC to respond to the needs of its key stakeholders, by creating an effective mechanism for interaction with them, addressing urgent problems and widening the circle of policy actors who use evidence-based analysis for decision making.

The Chairman of the EPRC Board of Management and the Permanent Secretary to the Treasury, Keith Muhakanizi made 6 key points during the re-branding event of EPRC and these were: 1. That the occasion aims at consolidating the past achievements of EPRC and repositioning the centre in responding effectively to emerging regional and global challenges. 2. Whereas the initial focus of EPRC was on monetary and fiscal policy, the Centre has now broadened its strategic focus and research themes in light of emerging national and global challenges. 3. The broadened research agenda is consistent with opportunities and challenges facing Uganda and aspirations of Ugandans as envisioned in the National Development Plan and the Vision 2040. 4. EPRC's mandate has been supported by funding by the Government of Uganda and development partners. 5. The government limited resource envelope makes it increasingly difficult for the government to fund EPRC on the necessary scale thus a need for no...

The former Vice Chairperson of the EPRC Board of Management and former Deputy Vice Chancellor, Finance and Administration Makerere University, Prof. David J, Bakibinga shared interesting insights about EPRC's past at the re-branding event. During his tenure at the Centre from 2006 to 2010, reforms were undertaken to strengthen the centre institutionally. These included the introduction of an internal audit function. Due to these reforms, EPRC's audited financial accounts became unqualified winning it the confidence and trust of stakeholders who include the Government of Uganda and Development partners. From being an understaffed Centre at inception, EPRC now boasts of a total of 32 staff, 18 of whom are research staff and 14 non research staff. However, the Centre is still below its required staffing capacity as it's supposed to have 44 members indicting a shortage of 12 members. Prof. Bakibinga then noted that the Centre won't attract and retain the best unless i...

1. Recognises the role played by the office of the Prime Minister and its appreciation for evidence-based research in informing the policy making processes in Uganda. 2. She notes that the talent, creativity, commitment and hard work of board of management, senior management colleagues and the entire staff have helped EPRC come this far. 3. She extends the Centre's sincere appreciation to all its core funders-Government of Uganda (since inception), the African Capacity Building Foundation and the International Development Research Centre. 4. Her appreciation also goes out to those who have utilised the Centre's research findings for policy purposes, to inform public debates as well as for advocacy/lobbying purposes. 5. Says it's not a surprise that the Centre has been elevated into a globally renowned research organisation. She affirms that the Centre has had an impact on Uganda's development path and inspired other policy think tanks in the continent and global...

It is generally believed that policy can make a difference in the growth and welfare of a society. For example ideological and policy differences are often cited in explaining the variance in economic development between North and South Korea, former East and West Germany or indeed Eastern and Western Europe in general. The effectiveness of public intervention presupposes the existence of a cause and effect relationship between the intervention and a desired outcome.  The conception of the causal chain is embedded in the prevailing ideology and development paradigms. Accepting the premise that policy is important is but one step away from asking how a country can put in place such policy framework for the effective attainment of the aspirations of its society. Invariably such a task by the official authority tends to require research support from dedicated institution or think tank that has the capacity to carry out rigorous research and effectively engage with policy makers t...

By Maria Nagawa, Research Associate EPRC On 25 th June, 2015, the Economic Policy Research Centre conducted the fourth annual forum on agriculture and food security, focusing on intensifying smallholder crop production in Uganda. Agriculture is a strategic sector of development: it employs 66% of the workforce, contributes to 37% of GDP, and contributes the highest proportion to export earnings at 40%. Despite all this, the sector notoriously suffers poor performance at 2% growth per annum, significantly lower than the services and industry sectors. The agricultural sector is largely dominated by smallholder farmers at 80%, whose average farm size is less than 2 hectares. These farmers produce at such low levels that there is barely a surplus for sale on the domestic market let alone for export, keeping them in a cycle of poverty. Moreover, due to population growth and declining soil fertility, farmers are opening up new lands; mostly by encroaching on wetlands and fo...

Isaac Shinyekwa and Maria Nagawa In 2003, Goldman Sachs projected that BRICS’ economic expansion was on track to overtake the G7 by 2040. Between 2002 and 2012, South Africa’s GDP had expanded by 41%, Brazil’s by 42%, Russia’s by 57%, India’s by 111%, and China’s by a whopping 170%. These countries have become increasingly important trade partners for low income countries. According to the United Nations Economic Commission for Africa, they accounted for 20% of total trade for low income countries in 2009, up from 7% in 1995. BRICS countries can also provide a new opportunity for Foreign Direct Investment (FDI), trade, development aid, and technology transfer and thus enable Uganda to better access supply chains that have higher chances of boosting export competitiveness, generating employment, and enhancing technological abilities. Trade intensity between Uganda and BRICS has been relatively high since 1996. In 2001, Uganda’s exports to BRICS were only US$5.3 million ...

At a mere 1kg of nutrient per hectare per year, Uganda has the lowest fertilizer use in the world. As if that was not bad enough for an agricultural country, prices of fertilizers here cost ten times more than on international markets. For East African comparison purposes, Kenya’s fertilizer use stands at 32kg/ha, Rwanda – 29kg/ha and Tanzania – 6kg/ha. The ministry of Agriculture, Animal Industry and Fisheries now says; fertilizer use should in fact be as high as 200kg/ha per year - way above the 2006 Abuja declaration recommendation of 9kg/ha per year. Komayombi Bulegeya, Commissioner Crop Protection Ministry of Agriculture says that figure was reached at after a feasibility study across the country and that the old recommendations are now “outdated”. Besides, the country’s soils are not getting any more fertile. Agricultural growth is stuck at two per cent while the population is rapidly growing at 3.2 per cent. Soon Uganda will not be able to meet the food demands of h...