Uganda finds a “Home” for Agricultural Finance

 29 February 2016, Kampala, Johannesburg – At a recent High Level meeting of key agricultural finance stakeholders in Uganda, held at the Ministry of Finance, Planning and Economic Development (MoFPED) offices in Kampala, an important milestone was reached by the Government of Uganda with MoFPED accepting and officially taking on the mantle as the “Home for Agricultural Finance” in Uganda.

 Speaking at the Meeting, the Secretary to the Treasury Mr. Keith Muhakanizi said, “As the ‘Home’ for Agricultural Finance, the Ministry will among other things strengthen its coordination role at government level and hence be relevant to agricultural finance development in Uganda.”

He thereby immediately appointed a Taskforce, to be chaired by the National Planning Authority, to among other things, guide him in developing an institutional framework, in MoFPED, for agricultural financing and the appropriate mechanisms to support this framework. The Taskforce will also design a work plan for the next year or so, which will inter-alia lead to the development of an agricultural finance policy and strategy for Uganda. Members of this Taskforce include MoFPED, Ministry of Agriculture, Animal Industries & Fisheries, Ministry of Trade, Industry & Cooperatives, Bank of Uganda, Uganda Agribusiness Alliance (UAA) etc.

Commenting on the decision, Erick Sile, Agricultural Finance Advisor at the NEPAD Agency, said “Designating a “Home” for agricultural finance is a commendable and outstanding achievement in Uganda, as coordination of agricultural financing issues would ultimately contribute to formulation of policies and strategies that create a conducive environment for private sector entities, which in turn will have the right incentives, to increase their participation in the transformation of agriculture in Uganda.”

Moreover, coordination of the public sector actions in agricultural finance will contribute to the strengthening of coherent, sustainable and socially responsible agricultural finance policies and supportive underlying legal and regulatory systems.

Speaking after the Meeting Honourable Victoria Sekitoleko, former Ugandan Agriculture Minister and current UAA Chairperson said “access to agricultural finance remains a major challenge in Uganda, affecting both the capacity of smallholder farmers to generate sustainable income from their farming activities and the ability of the country to attain food security and self-sufficiency.”  She added that, “the new ‘Home’ for agricultural finance, in the Ministry of Finance, will certainly guide sector players in the pursuit of a thriving agricultural sector in Uganda.”

This pioneering policy development in Africa also carries with it hopes for improving coordination of agricultural finance policies and enhancing financial sector support to agriculture in Uganda. Furthermore, these positive changes have the potential of inspiring policy reforms all across Africa driven by the Comprehensive African Agriculture Development Programme (CAADP).