The opposition has expressed concerns over the Ugandan government’s growing dependence on foreign funding to support the agriculture sector, signaling a major shift in the 2025/26 National Budget.
Their analysis indicates a projected surge in external financing, while government expenditure is expected to decline significantly.
Asinasi Nyakato, the Shadow Minister of Agriculture, presented the Alternative Policy Statement for the sector before Parliament, warning of the implications of this trend.
“This means the sector’s big component is externally funded with associated problems like delayed disbursements and high interest roles, among others negatively impacting the industry given the country’s comparative advantage in the region,” Nyakato stated.
She also noted that despite Parliament’s approval of a Shs72.2 trillion National Budget for the 2024/2025 fiscal year—representing a 36% increase—the Agro-industrialization program continues to face budget cuts.
“The Agro-industrialization program still suffers budget cuts from Shs2.064 trillion for FY2024/2025 to Shs1.589 trillion for BFP FY2025/2026 proposed, reflecting a reduction of Shs375 billion (-18%) and falling significantly short of the NDP IV costing of Shs2.448 trillion,” Nyakato revealed.
The Alternative Policy Statement proposed several key measures to address challenges in the sector and unlock its potential, including:
Establishing an Agency for Perennial Crops to enhance the management and promotion of key perennial crops.
Revamping the National Seed Company to ensure the supply of high-quality, improved seeds to farmers.
“The government should revamp the National Seed Company to ensure the provision of improved quality and subsidized inputs to farmers throughout the country. This will ensure the availability of quality and affordable seeds on the market. The government should provide funding in the budget FY2025/2026 to procure and make available to farmers a variety of subsidies, including seeds and seedlings, fertilizers, fish gear and fishing vessels, and irrigation equipment that are essential to raising productivity,” Nyakato explained.
Creating a National Food Regulatory Agency to oversee food quality and safety, which is crucial for market access.
Establishing an Agricultural Bank to provide affordable credit to farmers.
“Government should act on the resolution of Parliament to establish an Agriculture Bank to avail affordable credit to the farmers within a framework that relates to agricultural practice, that looks at maturity and harvests of crops and animals involved. Some of the monies channelled through Uganda Development Bank can be disbursed through the Agricultural Bank as much of the credit through UDB is still inaccessible for many people due to inadequate requirements needed for access. Limited access to Agricultural Credit Finance by many Agricultural households has impacted heavily on the farmers’ credit balances and also constraints on Agriculture production,” Nyakato emphasised.
The opposition’s concerns underscore the need for the government to reassess its agricultural funding strategy and prioritise sustainable, domestically driven growth to ensure long-term stability and success in the sector.