World Bank questions Uganda’s spending formula on farming

June 21, 2018 in Finance, Investment, Land & Agriculture, Policy by Editor

June 21, 2018—A report by the World Bank Group has shown that Uganda’s public agricultural spending is inadequate to spur productivity and growth in the sector. Agriculture is Uganda’s economic mainstay, but during the past 50 years has failed to break out of a system dominated by subsistence farming and limited value-addition.

The report, ‘Closing the potential-performance Divide in Ugandan Agriculture’ was recently launched in Kampala and indicated that up to 50% of government expenditure is currently used to procure and distribute subsidized agricultural inputs which are often of questionable quality leading to low productivity amongst most farmers.

World Bank country manager, Christina Malmberg Calvo said, although the inputs are important and a priority, this is not enough to encourage growth, because in most cases the items are of poor quality and lack the trust of farmers.

Malmberg Calvo said in spite of all the government’s efforts in the sector, growth has been slow, actually negative when measured in the usage of land, labour and inputs for the past 18 years. Like many other African countries who signed the Maputo Declaration, Uganda has failed to put aside 10% of the annual national budget for agriculture development.

Presenting the government’s spending proposals for 2018/19 last week, finance minister, Matia Kasaija, said agriculture will get UGX893 billion (just over $230 million) up from UGX828 billion in 2017/18, but still less than 5 percent of the total budget.

She said although agriculture employs 72% of Uganda’s workforce and is the main source of household income and food security as well as contributing half of the exports, productivity remains below potential. Average annual growth has been at 2 percent which is far below the population growth of 3.3% and only 5% in terms of commercial production.

“In the title of the report, we signal that there is a big gap between what the agricultural sector in Uganda currently contributes to the economy and what it can contribute-its potential. So what does it take to go from here to there? This is within the reach of the policy makers’ actions in Uganda,” she said.

According to Holger Kray, Head of Africa Agriculture policy unit at the World Bank Group, the problem in Uganda’s agricultural sector is mainly priority other than funding and the situation can be improved with little, but strategic changes.

‘We identified three priority areas for policy action and investment, namely commercialisation through value- addition and trade, enhanced resilience of agriculture production and rural livelihoods and strengthening public institutions and policies” Kray said.

In his response to the report, deputy prime minister, Moses Ali said the government was still prioritising infrastructure development and manaufacturing, but hopes that once those projects are done, they will automatically transform the agricultural sector.

“We appreciate the findings of this report and will look into the recommendations and consider them seriously. As a country, our priority is commercialising agriculture and using it to transform our people into a modern society,” Ali said.

The report was put together by the World Bank and the Alliance for a Green Revolution in Africa (AGRA) in close collaboration with the government.

Among other things, the report recommended that the government makes more efforts to control soil erosion, floods and droughts by putting in place irrigation schemes and improve access to finance for farmers. The government has already earmarked a substantial increase in funding for irrigation next financial year starting July.