The Ministry of Finance Planning and Economic Development, has taken over the administration and management of agriculture finance.
This was announced by the permanent secretary in the ministry, Keith Muhakanizi during a high level meeting with key agriculture finance stakeholders in Kampala.
“As the “home” for agricultural finance, the ministry will among other things strengthen its coordination role at government level to become relevant to agricultural finance development in Uganda,” said Muhakanizi.
While at the ministry, a task force chaired by the National Planning Authority will guide the finance ministry in developing institutional framework for agriculture financing and appropriate ways of supporting the frame work.
According to Muhakanizi, the task force will also design a work plan for the next year, which will lead to the development of an agricultural finance policy and strategy for Uganda.
Members of the taskforce include MoFPED, Ministry of Agriculture, Animal Industries & Fisheries, Ministry of Trade, Industry & Cooperatives, Bank of Uganda, SNV Netherlands Development Organization, and Uganda Agribusiness Alliance (UAA).
Erick Sile, the agricultural finance advisor at the NEPAD agency, said that designating a home for agricultural finance is commendable and will ultimately contribute to formulation of policies and strategies that create a conducive environment for private sector entities.
“This will in turn have the right incentives to increase their participation in the transformation of agriculture in Uganda. This also means that coordination of the public sector actions in agricultural finance will contribute to the strengthening of sustainable agricultural finance policies and supportive regulatory systems,” said Sile.
The chairperson of the Uganda Agribusiness Alliance (UAA),Victoria Sekitoleko said that access to agricultural finance remains a major challenge in Uganda, affecting both the capacity of smallholder farmers to generate sustainable income from their farming activities and the ability for the country to attain food security and self-sufficiency.
She added that the new home of agricultural finance, will guide sector players in the pursuit of a thriving agricultural sector in Uganda.
The designation of MoFPED as a home for agricultural finance in Uganda is a follow-up of previous efforts such as recommendations arrived at, from an international agriculture financing conference held in Kampala in 2011, under the theme “Zipping Finance and Farming in Africa: Harnessing the Continent’s Potential. It was organized by the Making Finance Work for Africa (MFW4A) Partnership, a platform aiming at coordinating interventions in the development of financial sectors in Africa.
In 2015, UAA partnered with the NEPAD Agency to create the Investment Facilitation Platform (IFP).
It must be noted that most National Agriculture Investment Plans (NAIPs) recognize the need for increased funding and investments in the agricultural sector throughout Africa.
However there is little information on how private sector funding can be mobilized to support the increasing needs of the agricultural sector.