By Gayathry Venugopal- Research Analyst EPRC BoU headquarters in Kampala- Courtesy Photo Alleged irregularities and illegalities committed by Bank of Uganda (BoU) in its closure and sale of seven commercial banks and the subsequent, ongoing Parliamentary probe has not only raised questions on the central bank’s activity, but on Uganda’s financial sector as a whole.

"Budgeting for Future Generations" was the theme for the 2016/17 National Budget Debate. It centred around three critical interventions; Debt Sustainability, Agriculture and Human Development.  Dr. Sarah Ssewanyana, the Executive Director of Economic Policy Research Centre (EPRC) and interim head of Uganda Economics Association (UEA) gave the opening remark.  Dr. Sarah Ssewanyana:  Quite often we forget the young ones as we budget.  Our population structure is wide at the bottom We have 55% of the population which is below 18. Gov’t is committed to working smarter for greater impact in our economy The budget highlights agriculture, tourism and human development Proposed interventions are mainly around tertiary education (trying to support the new universities). Is this what we really require as a country?   Proposed financing of the 2016/17 finance budget. Is it sustainable? How about our children and future generations.  Dr. Joseph Mu...

On 13 th of March, a number of stakeholders came together for a validation workshop. The workshop was regulatory impact assessment for the National Fertilizer policy for Uganda. As she opened the workshop, Dr. Sarah Ssewanyana, the executive director of EPRC revealed that there was need to increase fertilizer usage by small holder farmers in Uganda. Her comments were further enhanced by a Ministry official who said that “70% of the fertilizer imported into Uganda is used by large scale farms especially tea and sugarcane plantations.” It was Drake Rukundo’s presentation that called for an urgent need to pass and implement the fertilizer policy. In his submission, it was noted that out of the required 50kg/Ha/Annum, Uganda was adding only 1kg/Ha?Annum making the country one of the least in fertilizer use in the whole world. Rwanda farmers use 29kg/Ha/annum, Kenya 35kg/Ha/annum while South Africans were at 60kg/Ha/annum. To Rukundo, if government does nothing, there was a risk o...

To answer this question, a Qualitative, participatory, research was undertaken by Economic Policy Research Centre (EPRC) by engaging different rice value chain stakeholders. Research was conducted through two case studies on domestic private sector investment: Equator Seeds Ltd., a domestic seed company investing in new rice seeds in Northern Uganda Centenary Bank, a commercial bank providing financial services for rice value chain actors in Eastern Uganda The study is timely because of the following reasons: The meeting comes after launch of Sustainable Development Goals and Paris Agreement. The two seek to leave no one behind in climate change risk management. 64 percent of global swamps have been depleted. In Uganda, particularly Kampala, the cost of treating water has gone up by five percent. This constrains the already poor budget.  Climate change is real and Uganda has had its real share as seen in recent mountain slides, floods and droughts. Studies point o...

A new collaborative study conducted by the Economic Policy Research Centre (EPRC) and the International Institute of Sustainable Development (IISD) has revealed that risks and uncertainty from climate change impacts the entire rice value chain. The study was code-named; ‘Private sector investment in a changing climate: Resilient rice value chain development (PSI-Climate). The study focused on rice value chains since rice is one of the priority crops for the Government of Uganda in improving food security and household income. The research was conducted through two case studies on domestic private sector investment. This involved Equator Seeds Ltd, a domestic seed company investing in new rice seeds in Northern Uganda and Centenary Bank, a commercial bank providing financial services for rice value chain actors in Eastern Uganda. Among the impacts of climate change included the increased drought frequency and intensity, rising temperatures, and change in seasonal rainfall distribution. ...

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...