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Uganda’s economy begins to recover due to Agricultural improvement

by Grace Kisembo

According to a report by the Uganda Bureau of Statistics Uganda’s agricultural prices improved by five per cent as the economy begins to recover gradually in the third quarter of 2020.

The report also noted that food crop activities registered a growth of 4.3 per cent in 2019/2020 compared to the 1.5 per cent growth in 2018/19.

In 2019/2020, Uganda’s livestock activities grew by 7.7 per cent compared to 7.3 per cent in 2018/19.

Speaking during a thought-leadership forum hosted by the Centenary Bank under the theme ” Interventions for Agribusiness Development” the Chief Manager Agribusiness at the bank said, “The 5 percentage points price improvement, is largely attributed to the gradual recovery of activities in the agricultural sector and the economy as a whole, case in point is the improved price of Matooke and other foodstuffs.”

He also added that financing is instrumental in boosting agricultural activities and the structured ecosystems that focus on both financial and non-financial services which have made possible the utilization of credit extended.

“This year, we have disbursed close to UGX 600 billion (about $160.9 million) of which 60 per cent has been issued to smallholder farmers,” adding that, “Agriculture financing contributes about 12 per cent of the total lending to all sectors in the banking industry which is approximately UGX 2 trillion ( about $536.4 million). Beyond the financing, we have offered guidance to our customers in relation to managing their credit and how this can be rightly invested for the desired return on investment,” Nakhokho explained.

The Chief Operating Officer of Uganda’s Agricultural Business Initiative (aBi), Mona Ssebuliba said: “Key lessons have been drawn, which the farmers have to adjust to not limited to; the ability to swiftly adapt to business models, digitizing for improved resilience, business monitoring, putting in place business continuity plans for the unexpected occurrences, have a plan to guide prompt decision making, among others which are designed to manage any potential risk that might pose a threat to the business.”

She also said that the Agriculture Business Initiative has focused on stabilizing and strengthening Financial Institutions to ensure that agribusiness financing is supported in Uganda by reducing the interest rate from an average of 13.5 per cent to 8.2 per cent.

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