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 highly concessional terms to finance 14 projects and programmes with the objective of empowering poor people in the country’s rural areas. It has also made six country grants totalling US$4.2 million. IFAD is currently providing financing and technical assistance for five ongoing projects and programmes.

As part of the donor effort to improve international development effectiveness, IFAD has identified three key sectors as the focus of its investments in Uganda:

• Improving agricultural technologies and market linkages to help farmers move from subsistence to market-oriented production in order to increase their incomes and improve their living standards and levels of food security
• Supporting rural financial services to encourage small-scale farmers to save part of their earnings for investments in increased productivity and in strategies for coping with risk
• Promoting the decentralization process to strengthen local levels of government and improve rural economic infrastructure, with a view to promoting economic growth in rural areas.

In the context of donor harmonization, IFAD works with development partners who are active in these sectors. In the agricultural sector, IFAD is one of 15 donors who 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 also supporting decentralized governance through the District Livelihoods Support Programme and the Community Agricultural Infrastructure Improvement Programme, co-financed with the African Development Bank (AfDB). 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 the three key sectors listed above. Since September 2007, IFAD has assumed responsibility for direct supervision and loan administration for four of the five interventions it is financing in Uganda.

Improving agricultural technologies and market access

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 DSIP, building upon the experience of the 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 it works to reduce dependence on imports through competitive processing, marketing, input-supply and credit systems.

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 – create 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.

Building rural financial services

In partnership with the Ministry of Finance, Planning and Economic Development, IFAD invests in Uganda’s rural sector in support of the government’s Rural Financial Services Strategy. The strategic objective is to encourage small-scale farmers to save part of their earnings in order to give them some degree of security, as well as options for investing in increased productivity.

Rural finance is a crucial component of the transition from subsistence to commercial farming. The IFAD-funded Rural Financial Services Programme works to expand rural financial services, building the capacity of local communities both to mobilize savings and provide loans on a sustainable basis. With this programme, IFAD supports rural finance outreach and sustainability through local, member-owned savings and credit cooperatives. IFAD also supports the Uganda Women’s Effort to Save Orphans, an NGO that helps to establish village savings and loan associations, and encourages vulnerable groups to invest in alternative livelihood options.

Supporting decentralization

Since 1987, decentralization has had a prominent place in the Government of Uganda’s strategy to reduce rural poverty. Decentralization is one of the key objectives of the country’s sector-wide development plan. Under the leadership of the Ministry of Local Government, and in line with the policies set out in the Local Government Sector Investment Plan, IFAD has contributed to the decentralization process. Starting with its earliest operations in Uganda, IFAD has provided continuous support for decentralization in collaboration with the Belgian Survival Fund and, more recently, with AfDB. The empowerment of poor people and their local institutions through decentralization is at the forefront of IFAD’s initiatives.

Country strategic opportunities paper

Source: IFAD