$4.6m raised to boost agro-processing in northern Uganda

October 1, 2018 in Business, Finance, Investment, Land & Agriculture, Policy by Editor

October 1, 2018—Selected farmers in northern Uganda are to benefit from a €4 million (about UGX17.7 billion) fund intended to provide both money and technical know-how to help improve agro-processing in the region which has the potential to become a major food basket.

The $4.6 million has been put together by the United Nations Capital Development Fund (UNCDF); the Private Sector Foundation Uganda (PSFU); the Uganda Development Bank Limited with support from the European Union (EU).

Basically, UNCDF offers ‘last mile’ finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development.

Dr. Dmitry Pozhidaev, the regional Technical Advisor for UNCDF, said the fund will offer low interest loans of 10 pc to 12 pc to entrepreneurs in the northern parts of Uganda that are adding value to agricultural projects.

“According to an analysis that we did, agro-businesses have not been given enough support and yet they provide markets and sustainability of food security. These people, who are adding value to agricultural products, do not have access to affordable finance and technical advice. This is what this Fund intends to do,” he said.

The ‘Support to Agricultural Revelation and Transformation’ (START) Facility will focus on development and financing of capital intensive agricultural projects promoted by small and medium businesses that add value in storage and processing of agricultural products in northern Uganda.

Some of the sub-regions to benefit include Acholi, West Nile Teso and Karamoja. PSFU executive director, Gideon Badagawa said the criteria being used to select the projects is on merit. But there are conditions that have to be met.

“First, the businesses must be registered and recognized and focusing on adding value to agriculture through storage or processing. The project must also have 25 pc of the proposed finances while UNCDF provides the other 75 pc of the financing and of course it must be in northern Uganda,” Badagawa said.

UNCDF’s financing models work through two channels: financial inclusion that expands the opportunities for indivi- duals, households, and small businesses to participate in the local economy, providing them with the tools they need to climb out of poverty and manage their financial lives; and localized investments that show how fiscal decentralization, innovative municipal finance, and structured project finance can drive public and private funding that underpins local economic expansion and sustainable development.

Speaking for UDBL, Patricia Ojangole said, “We are only starting with northern Uganda, but the Fund is evolving and will be rolled out in other parts of the country. For a start, we have €4 million, but we expect a leverage of €8 million through private sector financing and financial support from other development banks.”

START is being implemented under the Development Initiative for Northern Uganda (DINU) Project, a Ugandan government initiative overseen by the Office of the Prime Minister. Apart from contributing towards increased food security, DINU will hopefully also improve maternal and child nutrition and enhanced household incomes.

northern Uganda