KAMPALA — The Private Sector Foundation Uganda (PSFU), in partnership with the Ministry of Trade, Industry and Cooperatives and supported by the Alliance for a Green Revolution in Africa (AGRA), has launched two groundbreaking national studies aimed at transforming Uganda’s agricultural financing and market systems.
The studies focus on Sustainable Financing for Cooperatives and Business Associations and Policy and Market Interventions for Beans, Maize, and Rice Value Chains.
The launch brought together government officials, private sector actors, financial institutions, development agencies, and farmer organizations to discuss challenges and opportunities in agriculture.
Agriculture employs over 68% of Uganda’s population but contributes only 24.1% to GDP, according to the 2024 Uganda Bureau of Statistics report.
Despite this, the sector remains underfinanced, receiving just 12.2% of national credit.
Many cooperatives face high-interest rates of up to 25%, lack of collateral, and poor financial systems, with fewer than 20% ever accessing commercial loans.
The studies highlighted key gaps within cooperatives: only 41.3% maintain updated financial records, 38% undergo external audits, and just 21% use digital finance tools.
Operational costs such as energy and transport, which can consume up to 50% of budgets, further limit competitiveness.
The value chain study revealed that only 28% of farmers engage in value addition for staples like rice, beans, and maize. Barriers include lack of equipment (65%), inadequate skills (54%), and limited access to finance (49%).
Post-harvest losses, exploitation by middlemen, poor infrastructure, and weak market linkages continue to depress farmer incomes.
“Current policies do not always reflect the realities faced by farmers. These studies provide a blueprint to address systemic gaps and unlock the potential of Uganda’s cooperatives and value chains,” said PSFU leadership at the launch.
Opportunities identified include mobile money, which recorded transactions exceeding Shs185 trillion in 2024, blended finance, climate financing, carbon credit markets, and gender-inclusive financing models.
The studies recommend greater inclusion of youth and women, adoption of digital management systems, cooperative audits, and learning from successful models in Uganda, Kenya, and Tanzania.
Proposed reforms range from simplifying the Agricultural Credit Facility (ACF) and developing a national agricultural insurance scheme, to reviving the Cooperative Bank and strengthening the national seed system.
The stakeholder dialogue also established a Technical Working Group to coordinate follow-up actions and foster consensus on policy, legal, and financial reforms.
Key participants included AGRA, Ministry of Trade, Bank of Uganda, Kilimo Trust, Uganda Cooperative Alliance, and Stanbic Bank.