According to the government plan for the next financial year, Agro-industrialization alone is due to get 1.5 trillion shillings, which is almost 6 percent of the total resource allocations to programs worth 26 trillion shillings.
Agro-industrialization
is set to take the fifth largest share of the national budget 2022/23 as the
government implements the Agro-Industrialization Programme Implementation
Action Plan.
This is also
part of the third National Development Plan (NDPIII), whose theme ‘is
increasing personal incomes and improving the quality of life of Ugandans.’
According to
the government plan for the next financial year, Agro-industrialization alone is
due to get 1.5 trillion shillings, which is almost 6 percent of the total
resource allocations to programs worth 26 trillion shillings. Including
projects to be externally funded, the planned expenditure amount to 1.8
trillion Shillings.
Almost half
of the program allocations will go to programs under human capital development
programs in sectors like education and health which will take 6.57 trillion
shillings, as governance and security take programs to take 6.4.
In third
place in integrated transport infrastructure and services with 4.5 trillion shillings.
On top of
the planned allocation to agro-industry, the agriculture sector will also
benefit from the planned government flagship Parish Development Model, which
will cater largely primary production.
Pillar 1 of
the model (Production, Storage, Processing, and Marketing) is also prioritized
under the Agricultural Value Chain Development Strategy 2021-2026 recently
approved by the cabinet.
“Consequently,
next financial year, the focus will be on sustaining the resilience of
agriculture along the value chain, agro-processing, and support to light
manufacturing,” says the National Budget Framework Paper, 2022/23.
Primary
production, which is mainly farming, features 39 percent of the households in
subsistence agriculture, and the funding programs are aimed at reducing
this.
The strategy
and the parish model will focus on high-value commodities like coffee, dairy,
poultry and poultry products, fish, and citrus, among others.
The
government also targets to expand storage and processing capacity for
agricultural commodities from 550,000 to 1.25 million metric tons, as part of
the efforts to tame post-handling losses and quality deterioration.
The Ministry
of Finance, Planning, and Economic Development also plan to continue
capitalizing the Uganda Development Bank to enable it to offer more affordable
long-term credit to agriculture, agro-processing, and manufacturing.
The Strategy
which states what to do at each value chain level proposes the relevant
approaches to adopt and defines the roles of various actors in the NDP III and
the parish model framework, for easy coordination and avoidance of
duplication.
“This
strategy brings all the players together at various levels; production and
productivity level, postharvest handling and primary processing level,
secondary and tertiary processing level and supporting standards that lead to
increased competitiveness of Uganda’s products in the global markets,” says
Gen. David Kasura Kyomukama, the Permanent Secretary at the Ministry of
Agriculture, Animal Industry and Fisheries.
Agriculture
contributes a quarter of the country’s GDP but employs more than two-thirds of
the population. The sector accounts for 44 percent of the country’s exports,
showing the potential it has to lead economic transformation.
The export
earnings are still limited by the fact that most of the exports are raw
materials, and some with very little value addition.
The earnings
are planned to rise to 2.3 billion dollars by the end of the next financial
year, compared to 1.65 billion in 2018, while the anticipated increase in
output and value addition should lead to a decline in agricultural imports from
931 to 672 million dollars.
“Agricultural
will propel Uganda to reduce its negative trade balance, through adding value
to agricultural raw materials in order to promote the export expansion of high-value products, while promoting import substitution of agro-industrial products,”
says General Komukama.
Specialized
agricultural institutions given direct allocations include the Dairy
Development Authority, with 11.5 billion shillings, the National Animal Genetic
Resource Centre and Data Bank with 71.7 billion, and the National Agriculture
Research Institute, NARO which gets 108 billion.
The Cotton
Development Organization is allocated 8 billion, while the Uganda Coffee
Development Authority gets 85.6 billion shillings.
