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November 27, 2011

Uganda gets $14 million agriculture loan, cynics doubt farmer-level benefits

by John Kasozi
Uganda has secured a sh35b ($14m) loan from the International Fund for Agricultural Development (IFAD) to finance the Agricultural Technology and Agri-business Advisory Services project.

The loan has a maturity of 40 years, including a grace period of 10 years, a statement from the Uganda embassy in Rome said.

Deo Rwabita, Uganda’s ambassador to Italy and Kanayo Nwanze, the IFAD president, signed the loan deal at IFAD headquarters in Rome, Italy on November 9. Rwabita is also the permanent representative to FAO and WFP.

Ambassador Mumtaz Kassam, the deputy head of mission and Robert Sabiiti, the alternate permanent representative to FAO and WFP witnessed the function.

The loan administration and project supervision will be overseen by the IDA as a co-operating institution, the statement added.

It indicated that the project would focus on raising rural poor households’ income through improved agricultural research and advisory services, while enhancing environmental sustainability and resilience to climate risks and land degradation.

It will promote the role for private sector operators in agricultural development. It will also introduce new technologies for sustainable land management to help farmers cope with risks associated with climate change.

Speaking at the signing ceremony of the loan agreement, ambassador Rwabita hailed the excellent relationship between IFAD and Uganda. He noted that the Vegetable Oil Development project in Kalangala, which he visited recently, was a success as it has improved the livelihood of participating the farmers and their families.


Being national in scope, the project will build on the IFAD co-financed National Agricultural Advisory Services Programme, which was successfully completed in December 2010.

During the implementation of the project, the agriculture ministry will be the lead agency. The additional project parties are the National Agricultural Advisory Services and the National Agricultural Research Organisation.

Agriculture is one of the mainstays of the Ugandan economy. Raising agricultural productivity and promoting agriculture businesses are high priorities for the government.

With the introduction of more profitable crops, smallholder farmers are expected to improve their yields and be able to set higher farm prices for their produce. More than 1.7 million rural households consisting of women and young people will benefit from the project.

With this new project, IFAD will have financed 14 programmes and projects in Uganda for a total investment of sh740billion (US$296.5 million) benefiting more than 4 million households.

Reader Comments 

Aaron | Bweyogerere
I''m a farmer but all the years I have done farming, I have never set my eyes or even benefited from the likes of naads, naro... These guys just use that money to buy fuel guzzling cars. The last time I tried getting a naads coordinator to my farm, he asked me for facilitation!!! So this is another waste of precious dollars.

Kilama Maxwell | Bweyale -Kiryandongo
This is good to hear, But? who are the actual beneficiaries? It is very difficult to access agriculture loans from the current banking institutions.I would suggest an agriculture bank be in place so that farmers would easily get the loans other than the so called traditional banks. otherwise the actual beneficiaries will not even have a smell of it.

kuhabwa fred | sembabule
This is a good initiative to support agriculture productivity and agribusiness projects in uganda which would be engine for massive food supply to the entire african continent and beyond however with my experience working with rural house holds to come out of cronic poverty and ensure positive results such funds should be channeled through farmer''s cooperatives, otherwise we might stop celebrating on loans agreement signing.

emma | mbarara
what is the importance of getting loans when we cant even use the money for its rightful targets!

KOMAKECH ALEX ONEK | Kitgum
rural framers in Uganda would have been the most empowered and rich farmers in East African region.Alot of financial concerns and support from both the government,local and International communities hace been shown unfortunately the money does not sinks to its rightful target.its my prayer to God and to the officials in public offices to have mercy on the Poor Ugandans who eat by chance than by choice.

ACAYE | Bergen - Norway
Alfonso,Good question,!!!! i also wonder where all the loans and grants go in Uganda!!! i hope they dont end up in private or personal accounts like the AIDS FUND!! NARO has already done enough research !!! all we need is to fund the farmers directly, in order to improve their out put and house hold incomes. i can see half of this loan ending up on financing seminars, workshops, and unnessary trips for the so called researchers!!! WE ALWAYS HAVE OUR EYES OFF the ball, and seeems nerver to get it right!!!! , very dissappointing!!!!

Peter | kampala
Let the money be used for the intended purpose, to avoid previous mistakes and setting up probing committees which consume more money! The agricultural sector needs much more investment given the prevailing environment situations.

Alfonso | Ntinda
How many loans does Uganda get in a week ? It has just borrowed from Nigeria NSSF to refurbish Mulago ! where does all the money URA collects go ? Now we cant even invest in local projects.


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