Uganda: Investment in Agriculture, Energy Will Boost Incomes

23.06.2017

Timothly Kalyegira's column in the Sunday Monitor of June 18, drew my attention to the recently released 'Report to the Ugandan People' by the US Embassy in Kampala. Whereas Kalyegira did not have many charitable things to say about Ugandans (the intended receipts of the report), I agree with him that the report was well structured, clutterless, incisive and colourful. It makes for easy reading and understanding of what the US government supported programmes are up to in Uganda.

A few highlights from the report that covers their last fiscal year (from October 2015 to September 2016), the US government and associated agencies spent $850m on five key focus areas namely health, stability, prosperity, justice and democracy, and education. Health, at slightly more than $500m, took the lion's share, accounting for approximately 60 per cent of the total spend. Stability (which covers defense spending, peace initiatives, refugee programmes, etc) came second with $280m accounting for 33 per cent of total spend. The other three focus areas shared the remaining 7 per cent of the total spend in the fiscal year.

Other key nuggets in the report are that average age in Uganda is now 14 years, implying that if you sum up all the ages of the 35 million Ugandans and divide this sum by the total population, you get 14 years! This reinforces our position as the country with the youngest population in the world. Eighty per cent of our population is below 18 years, and total population is projected to rise to 50 million and 100 million in 2020 and 2050 respectively.

I am not tempted, like my friend Kalyegira, to suggest that our average Ugandan is naïve and clueless, consigned to a life of inability to be competitive in the Ugandan economy and the global scene at large. The Ugandan population, and by extension the Uganda government, have the right ingredients at hand and or in the pipeline, to harness our potential for full scale production and economic activity to raise millions out of poverty and provide quality social services like health and education.

There are two avenues that I believe the US Mission in Uganda and its partner's may need to engage in and or support in the short and medium-term as they work in partnership with the Uganda government to ensure a better and brighter future for all Ugandans.

As noted in the 'Report to the Ugandan People; more than 70 per cent of the Ugandan population rely on agriculture for income and food. It is also well known that the majority of these are small holder farmers on small acreage of land, with minimal or no mechanised equipment or technology to boost agriculture production. Whereas the wheat farmer in Kansas, America has access to a futures market, agricultural subsidies, machinery, fertilizer, etc, to boost productivity and quality in their farming enterprise, the average Ugandan farmer is up against the vagaries of climate change, poor farm inputs, high labour and technology costs, etc, in their attempt to graduate from subsistence farming to commercial farming.

I believe that the US Mission in Uganda can share best practices of the Futures Markets/Commodity Exchange Markets so that local farmers have supply contracts and are guaranteed good prices for their produce in the short and medium-term. This should be a good incentive for local banks and insurance firms to offer credit and insurance products to farmers to boost production. The warehousing initiative, as highlighted in the report, is a good place to start from. Could it be possible for the US government programme to underwrite some private firms to invest in large warehousing facilities at district level, as a first step to decentralised commodities trading and futures market? I believe this would go a long way in building the foundation for all-inclusive economic growth.

The second proposition is on energy. The report highlights some of the energy efficiency initiatives currently undertaken by Power Africa, including hybrid solar-diesel power project in Kalangala. There is a multitude of opportunities and projects in the energy sector that would undoubtedly enhance access to electricity and value addition across the country. Renewable energy projects such as solar and wind at district level targeting health and education facilities would go a long way in improving service delivery at these social facilities.

Small/mini hydro projects and mini-grids targeting production zones, up-country industrial zones, commodity processing plants, emerging urban centres, etc. have the potential for strong multiplier effects across the economy. Power Africa may have to cast its net wider in partnering with private developers and government agencies in harnessing the opportunities for energy supply, distribution and access in Uganda. It is evident that support to both the energy and agriculture sectors, coupled with government's massive investment in public infrastructure, will yield dividends for the wider population, boost incomes and competitiveness on the regional markets. May be then, US Mission's 'Report to the Ugandan People' will highlight success stories that will be pleasant reading for Kalyegira.


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