IFAD in Uganda
For over 30 years, IFAD has been strongly committed to rural poverty reduction in Uganda. Since 1982, the organization has contributed approximately US$300 million in loans on highly concessional terms to finance 14 programmes and projects with the objective of empowering poor people and improving food security in the country's rural areas. It has also made US$21 million in grants. IFAD is currently providing financing and technical assistance for five ongoing operations.
- As part of the donor effort to improve international development effectiveness, IFAD has identified three strategic objectives for its investments in Uganda:
- Sustainably increasing the production, productivity and climate resilience of smallholder agriculture
- Enhancing the integration of smallholders into markets, with a focus on consolidating and scaling up investment in the vegetable oil subsector
- Expanding the rural population's access to, and use of, financial services, with emphasis on community-based financial institutions.
In the context of donor harmonization, IFAD works with development partners that are active in these sectors. In the agricultural sector, IFAD is one of 15 donors that signed on to the Comprehensive African Agriculture Development Programme, and it is an active member of the Agricultural Development Partners Group. In addition, IFAD is working with the Ministry of Agriculture, Animal Industry and Fisheries to support smallholder farming through the Agricultural Technology and Agribusiness Advisory Services (ATAAS) Programme – cofinanced with the World Bank – and through a second phase of the Vegetable Oil Development Project.
Under the leadership of the Ministry of Local Government, IFAD is supporting decentralized governance through the District Livelihoods Support Programme (DLSP) and the Community Agricultural Infrastructure Improvement Programme, cofinanced with the African Development Bank. In the area of rural financial services, IFAD is working with the Ministry of Finance, Planning and Economic Development to support the rural finance sector through the Rural Financial Services Programme.
To increase its effectiveness at the field level, IFAD established a country field presence in Uganda in 2006. Thanks to this arrangement, the organization participates in donor working groups and contributes to policy dialogue in key sectors, including the following.
Improving smallholder agriculture
Agriculture is one of the mainstays of the Ugandan economy. Under the umbrella of the Ministry of Agriculture, Animal Industry and Fisheries, the IFAD-supported ATAAS Programme finances agricultural research and provides agricultural advisory services to poor farmers. It does so within the framework of the government's Development Sector Investment Plan, building upon the experience of the now completed National Agricultural Advisory Services Programme. To help farmers move into commercial agricultural production, the ATAAS Programme supports increased productivity through the adoption of appropriate techniques. The programme also promotes the creation of employment and diversified production, and works to reduce dependence on imports through competitive processing, marketing, input supply and credit systems.
Integrating smallholders into markets
IFAD's ongoing Vegetable Oil Development Project, currently in its second phase, supports national production of edible oils. Under the project's Oil Palm Component, an innovative public-private partnership with a private-sector investor has supported the establishment of processing capacity and oil palm plantations. These plantations – including both small growers' and estate operations – generate employment and increase rural incomes in the target area.
Through a trust that includes smallholder farmer representatives on its board, the project provides farmers with a guaranteed market at a value tied to the world price. The project's Oil Seeds Component supports the use of improved seed varieties and strengthens linkages between farmers and local millers.
At the same time, IFAD contributes to rural development and market access in Uganda by supporting key economic infrastructure and empowering poor people and their local institutions. It does so under the leadership of the Ministry of Local Government, through the recently completed Community Agricultural Infrastructure Improvement Programme and the ongoing DLSP.
Building community-based rural financial services
In partnership with the Ministry of Finance, Planning and Economic Development, IFAD invests in ensuring financial inclusion for the poorest segments of the rural population. Rural finance is a crucial component of the transition from subsistence to commercial farming. The recently completed Rural Financial Services Programme worked to expand rural financial services, building the capacity of local communities to both mobilize savings and provide loans on a sustainable basis. Through the programme, IFAD has supported rural finance outreach and sustainability through local, member-owned savings and credit cooperatives.
The new Project for Financial Inclusion in Rural Areas is currently in the last stages of the parliamentary approval process. It will continue this work and invest in other community-based mechanisms to ensure financial inclusion.