Blog: Sector Discussion: Investing in Agriculture & Agri-Processing in Uganda

Sector Discussion: Investing in Agriculture & Agri-Processing in Uganda

Creating opportunities in rural areas, Funding mechanism for long term drought mitigation in Uganda, the promotion of horticulture, irrigation and livestock farming in rural Uganda. A personal overview from local MPs and entrepreneurs | Moderator: Estella Makumbi, Consultant at EMAK Consultants

Elizabeth Nyeko introduced the session by looking at agriculture as a source of food security. Africa has about 60% of arable land most of which is under-utilised.  She  added that Africa in 2012 imported food to a tune of 47 billion dollars, now  focusing  on Uganda, this is a country where agriculture is a bread winner of almost 85% of the population and opportunities are rife especially in the modernising of agriculture to meet food security demands.

Lloyd West of Abraaj discussed of various opportunities existing in Uganda but advised investors to narrow their interests on niche markets.

Hon. Amongin, Minister of State for Teso discussed opportunities in the rural areas focusing on Teso region. Rural areas are faced with numerous challenges to economic growth relating to infrastructure, information flow, unemployment, diseases, illiteracy levels, low food production capacity and poor agriculture mechanisation, rural-urban migration, access to clean water just to mention but a few. All these challenges presents huge investment opportunities.
Teso region is the biggest producer of citrus fruits and this is a huge opportunities as the region lacks fruit processing plants to add value to fruit products. Teso suffered twenty years of insurgency and this has contributed to the under-development of the region which has only one private university.
The government has allocated 420 acres of land for an industrial park in the area and the ministry of  Teso has development plans in place and are calling for experts and skilled Ugandans in the Diaspora to take advantage of  skills and knowledge transfer opportunities.
Due to drought and unpredictability of rain, irrigation and water harvesting is another opportunity coupled with horticulture not to mention value addition processing factories to add a value to fruits which most of it end up wasted.

Hon. Nekesa Barbara Oundo, Minister of State For Karamoja focused her presentation on the opportunities and challenges in the Karamoja sub-region.

Geographically, Karamoja is found in the North Eastern part of Uganda, it is bordered by Kenya on the East, and South Sudan on the North. it covers 10 % of Uganda with a total area of 29,125 square kilometers and total population of 1,315,218 people representing a population density of 48 persons per square kilometer, which makes it a potential region for investment.

Lifestyle of the people; Karamoja suffers the highest poverty levels above the national average in the country with 76 % (UBOS 2009/2010) of the total population living below the poverty line.
The Karimojong people are predominantly agro –Pastoralists, they combine extensive livestock keeping with seasonal cultivation of cereals.  The Ministry of Karamoja Affairs has embarked on promoting food security at house hold level to substitute livestock keeping.

Due to the vast availability of land, the communities are interested in partnering with potential investors to embark on large scale commercial farming and animal rearing to improve their income levels.

Karamoja has two climatic zones;
The Eastern Plateau along the Kenyan boarder which stretches from Amudat district north wards to Kidepo National Park. This belt has a concentration of mineral reeves like gold, limestone, and marble. The climate is dry savannah suitable for livestock rearing and ranching.
The western green belt stretches from Namalu northwards to Iriiri, Abim to Karenga is characterized with green savannah grassland suitable for large scale agricultural production. The people living in this belt grow maize, cassava, beans, sweet potatoes, rice and different vegetables.

Governments’ commitment to Pacify and Develop Karamoja
After assuming power in 1986, the NRM government in its 10 point programme recognized the Development of Karamoja as one of the Key priorities.

This commitment was reflected in the subsequent government development frameworks like the Poverty Eradication Action Plan (PEAP), the National Development Plan, and the formulation of the Karamoja Integrated Disarmament and Development Programme (KIDDP) in 2008, which is a government programme with the overall goal of Promoting Human security and creating conditions for recovery and development in the region.

Through the implementation of the KIDP framework, Government has strengthened its coordination role in the region, and the implementation of several development interventions both by government, development partners and the private sector are in high gear because of the enabling environment. Karamoja is now rife for investment like any other part of Uganda.

Investment opportunities in karamoja
Mineral development/ Mining industry
Due to the prevailing peace in the region, many private companies both local and international have applied and have been granted with prospecting and exploration licenses by the Ministry of Energy and Mineral Development. Currently over 150 Companies have been licensed to undertake exploration in Karamoja by the Government and some of these Companies are looking for investment partners to enter into joint ventures with in gold mining, cement processing, copper, iron ore and marble processing.
Agriculture potentials
As stated earlier, the western green belt of Karamoja is suitable for large scale agriculture production with vast Savannah grassland. The people around Namalu, Iriiri Abim and Karenga practice subsistence farming yet a lot of land is left idle.
The availability of large amounts of flat arable land in Karamoja makes it viable for commercial farming.

To promote agriculture the government has made the following interventions;
Strengthening monitoring of weather and climate at the national level
And the government has exempted agriculture inputs from Value Added Tax (VAT), Removed tax barriers on agricultural related exports among other interventions.

Potentials for Renewable Energy Resources in Karamoja (Solar and Wind energy)
The goal of Uganda Governments’ Renewable Energy Policy is to increase the use of modern renewable energy from the current 4% to 61% of the total energy consumption by the year 2017 (ERA June 2012). The government has therefore an elaborate institutional framework under the Ministry of Energy and Mineral Development that one can use to venture in the energy sector.

According to Electricity Regulatory Authority (ERA), solar energy in Uganda can generate up to 200 MW of power. Karamoja is one part of Uganda with unexploited renewable energy production resources such as abundant sunshine and strong winds that can be used to generate both solar and wind energy respectively.
Different groups of investors have been exploring possibilities of using the abundant sunshine in Karamoja to generate electricity that will be sold to government to feed into the national power grid that has already been connected to different parts of Karamoja. Therefore, this area is still open for potential investors.

Tourism potentials
Due to the prevailing peace, tourism is one of the fast growing industries in Karamoja with Kidepo national park becoming one of the tourist destinations in Uganda. The current capacity of social services existing in the park cannot accommodate the big number of tourists visiting the park especially during holiday seasons. The park management and the Uganda Wildlife Authority (UWA) have developed a plan to avail land to potential investors to establish hotel and recreational facilities in the park.

Besides, there are other wild life reserves areas like Moruajore where tourist go for viewing and spot hunting for buffalos but these areas have no hotel facilities because of the history of war.

In November 2012, the Minister for Karamoja Affairs with the Minister of Tourism and Wild life opened the first museum in Moroto which has a collection of the rich cultural antiquates of the Karimojong people.

Aloe Vera and Gum Arabic
Karamoja is endowed with different species of aloes of high quality that can be used in medicinal and herbal industries. The region is also endowed with two species of gum Arabica namely acacia seyal and acacia Senegal.

The Karamoja private sector foundation has championed the formation of Uganda gum Arabic cooperative which has membership among the Karamoja communities. The gum Arabic cooperative seeks for potential investors to finance the purchase of gum for export market in Europe.

Government creates enabling environment for investment in Karamoja
In its effort to promote investment in the region, the government of Uganda has invested in basic enabling infrastructure to augment and support investment initiatives in Karamoja.

Establishment of Industrial and Business Park in Moroto
In July 2012, government through the Uganda Investment Authority (UIA) purchased over 400 acres of land in Moroto district for an industrial park. Government is in the process of establishing basic infrastructure like roads, water and power within the industrial park to make it easy for potential investors to start up businesses in the area and to avoid huddles of acquiring land for investment by the investors.

Electrification of the region
Government has established three power lines to Karamoja from the National Power grid as follows; the southern power line from Muyembe through Namalu to Amudat district, the central power line from Soroti through Katakwi to Moroto district and the Northern Power line from Lira to Abim district.

Plans are underway to connect a 132 kw power line from Soroti to Moroto for the establishment of heavy industries like cement due to abundant deposits of limestone in the area.

Rural areas have been provided with Hydro Electric Power to promote agro processing, enhance value addition, service sector, the mining sector, and the manufacturing sector in the region.

Improvement of road infrastructure
The construction of the tarmac road from Moroto to Nakapiripirit by a Chinese firm that was contracted by government has already started. Meanwhile plans are under way for the tarmacking of Soroti – Moroto road and Muyembe  – Nakapiripirit roads. The periodic maintenance of different national and district roads by the Uganda National Roads Authority (UNRA) and the district local governments is ongoing.

Mechanisms for long term drought Mitigation in Uganda
Mitigating the effects of drought may not be sufficient to address the challenges of drought and therefore Uganda has concentrated on building long term resilience and sustainable livelihoods.
The Office of the Prime Minister through Ministry for Karamoja Affairs in collaboration with the Ministry of Water and Environment have developed plans to construct large water bodies in the region to provide water for production (irrigation) as well as taming the vagaries of weather in the region.

The Ministry for Karamoja Affairs plans to construct medium size valley tanks in every parish to provide water for livestock. So far a total of 25 valley tanks are being constructed in different locations in Karamoja.
Drought resistant crops are also being distributed to increase food production in the region.

Irrigation and livestock farming in rural Uganda
The revised Sector Investment Plan (SIP) by Ministry of Water and Environment recognizes irrigation as one of the major components of water for production and as being core to the eradication of poverty. A potential obstacle to the development of irrigation however is the cost.

The master plan acknowledges that development of infrastructure for irrigation is generally beyond the means of the average household or even the private sector. Therefore government of Uganda will take the lead in development of infrastructure for irrigation.

The irrigation cost will be divided into two – off-farm and on-farm. The government would be expected to meet the major costs of transferring water from the water bodies to the gates of the irrigable lands. In this process the farmers will meet 60% of the costs, while government meets the remaining 40%. The farmers’ costs would depend on the type of technology suitable for use on individual farms, but could include digging on-farm tunnels or buying pumps.

The total area under formal irrigation in Uganda is 14,418 hectares (35,612 acres) out of an estimated 560,000 hectares with irrigation potential. The plan is to increase the utilization of land near permanent water bodies from 5% to 10% by 2015, to 25% by 2020, and to 70% by 2035.

The Ministry for Karamoja Affairs has commissioned an assessment for the establishment of pilot irrigation project in selected areas in Karamoja. A technical team drawn from different line Ministries has already been dispatched to establish potential areas and irrigation options that could be applicable to specific locations.

Hon. Maria Nalubega was representing Hon. Rebecca Kadaga who could not attend the Convention and among the messages she delivered was the assuring of Ugandans in the Diaspora that she is pursuing the issue of appointing the Minister of Diaspora affairs, scraping of the dual citizenship fees and that she has already established a desk in the parliament of Uganda in-charge of Diaspora affairs.

Maria discussed the importance of ICT utilisation in relations to agriculture development and nature preservation. Forestation investment as a measure to preserve the environment is an area she advised investors in her area of Butambala. Factories and research in pest control is also key as most of the population in Butambala are farmers who greatly relied on pest control and market research would be a great bonus.

Introduction of small scale irrigation services affordable to local farmers in the area is also welcome from investors and silos and other storage for agriculture products is another opportunity.

The government of Uganda secured a 15 billion dollar funding from the world bank to roll-out a programme for the whole country that will empower and enhances capacity for rural people to produce economically rather than relying on subsistence farming.

Maureen Mwagale who runs a charity that helps the women of Karamoja addressed the forum on issues on social aspects, philanthropy and volunteering as a mean of skills transfer to boost growth in rural areas.

She urged Ugandans in the Diaspora to volunteer their time during their annual holidays in Uganda. She advised on looking at small investment like setting up a bakery which Karamoja lacks any and that Karamoja has good futile arable land which can also be good for other cash crops like Matooke which can be a great source of earning. Tourism is also another huge potential, Kidepo national park presents huge potential for investors.

Dr Allam Ahmed, the Founding President of World Association for Sustainable Development made his remark by recognising the empowerment of women in Uganda and this is exhibited on the panel which is surrounded by women. (applaud).

He referred to a quote by a Nobel prize winner in 1964 who said that a man who farms like his forefathers did he will never improve productivity, no matter how hard he works and no matter how futile is the soil.

He emphasised the need for the government to promote technical change and mechanize agriculture.

Marketing is another aspect that need to be looked at critically, without marketing and market accessibility then there is no point of improving productivity. To get Africa products to the European market, international standard and quality control has to be met to satisfy the required standards for international compliance.

Lord Sheikh interjected as a point of information and appreciated the presentation from Hon Barbara Nekesa on the opportunities she outlined in the Karamoja sub-region. The point made by Dr. Allam are key elements he added that needs to be noted. Uganda has a good product but needs to be packaged well and marketed not only in the UK but internationally.

A delegate pointed out that Africa should not be deluded by the global financial crisis. Africa has got everything it needs, the talent, resources, what it needs is a financial model, a monetary model which does not enslave the people to outside multi-national, banks. It needs an ethical models which empowers Africans and equal partnerships and sustainability.

Hon Nakabirwa responding to a question posed on incentives to local farmers. She said that the government is putting in places as incentives to local farmers like cold rooms, hatcheries, infrastructure. The government is also identifying progressive farmers and partner with them to help them to get access to markets.

Hon. Nakabirwa also responding to the issue of confusion in land acquisition, she referred individuals to do their own due-diligence and try also to know the Uganda land tenure system before buying or trusting agents. Uganda has four tenures which includes Mailo land, freehold, leasehold and customary. She advised in the next convention someone from the government to come and discuss solely the issue of land as it is very contentious.

John Doe
John Doe

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