• File Size 5.39 MB
• Published Dec 5, 2023

Abridged version: Agricultural Finance Yearbook 2022. Towards climate responsive agricultural finance in Uganda

This Agricultural Finance Yearbook 2022, the twelfth edition in the series, offers in-depth analysis of the agricultural financing landscape in Uganda. It comprises 25 articles arranged in six chapters, underscoring ideas, products and innovations, processes, achievements, challenges, and possible policy options, moving forward.

Chapter one explores existing policy and legal frameworks and their effect on accessing agricultural financial services. It reveals lack of an elaborate legal and regulatory framework for facilitating agricultural credit guarantee schemes, agricultural leases and other financial products targeted at increasing lending to smallholder farmers. Hence Government needs to become proactive and design clear and enabling policies and legislations; monitor and enforce them; and regularly review and update them.

The second chapter highlights recent innovations in agricultural finance, their implementation and impacts so far. The digital innovations have shown great potential to increase smallholder access to finance. For this reason, Government has to investment in digital literacy and digital infrastructure, specifically internet accessibility and power supply in the rural areas and incentivize the private sector to do similarly.

Chapter three looks at financing of selected agricultural value chains of sugarcane and rice, the new Parish Development Model and the country’s warehouse receipt system. The analysis reveals that Government has the duty to identify, popularize and protect farmer-friendly and effective financing models; always meet its obligations in public-private partnerships fully and timely; and prioritise investment of the meager resources and follow up with supportive value chain-specific inputs.

The fourth chapter addresses various green financing and related cross-cutting issues, such as how to fast-track risk mitigation policies in agribusinesses, attract global climate financing and funding its Nationally Determined Contributions requirements. It is revealed that fintechs and agri-techs are convenient and cost-effective tools in green financing; good results are reaped when Government and private sector promote environmental, social and governance (ESG) policies and ‘do no harm’ principles in all economic activities; and that the country stands to benefit by incorporating local, national, and global approaches and regulatory standards to climate change.

Chapter five gives updates recent efforts by Government and non-government actors to manage agricultural risks and risks in lending to agriculture. The last chapter focuses on Uganda’s agro-industrialisation programme and how it has fared under the transition from the sector-based budgeting approach. It is revealed that agro-indutrialisation is more than an agricultural activity, involving several ancillary sectors and, therefore, requiring massive human capacity building and capitalization of public investment and development arms.

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