Agricultural Prices Improve by 5% Points as Economy Recovers

The gradual recovery of the economy witnessed in the 3rd quarter of 2020, has contributed to the positive performance of the agricultural sector with prices improving by 5 percent points.

According to the June 2020 Uganda Bureau of Statistics report, food crop growing activities registered a growth of 4.3 per cent in 2019/2020, compared to the 1.5 per cent growth in 2018/19, while livestock growing activities grew by 7.7 per cent in 2019/2020 compared to 7.3 per cent in 2018/19.

“The 5 percentage points price improvement, is largely attributed to the gradual recovery of activities in the agricultural sector and the economy as a whole, case in point is the improved price of Matooke and other food stuff,” noted Evans Nakhokho the Chief Manager Agribusiness at Centenary Bank during a thought-leadership forum organized under the theme: “Interventions for Agribusiness Development.”

Nakhokho said that, “Financing plays an instrumental role in boosting agricultural activities and the structured ecosystems that focuses on both financial and non-financial services has enabled the utilization of credit extended.

This year, we have disbursed close to Shs600 billion of which 60% has been issued to small holder farmers.”

He added that, “Agriculture financing contributes about 12% of the total lending to all sectors in the banking industry which is approximately shs2 trillion.

“Beyond the financing, we have offered guidance to our customers in relation to managing their credit and how this can be rightly invested for the desired return on investment.

“We have reviewed business projects for customers who have prior credit accommodation for a possibility of restructuring, refinancing and where tenable extended moratoriums.”

“Agricultural Business Initiative (aBi) has focused on stabilizing and strengthening Financial Institutions to ensure that agribusiness financing is supported, this has been implemented by rescheduling lines of credit (principle and interest) for a period of 12 months, reduced interest rate from an average of 13.5% to 8.2% on all running facilities with a short-term working capital for Shs 300 million –Shs 1 Billion at 8.2%, no fees, among others,” revealed Mona Ssebuliba, Chief Operating Officer, aBi Finance Limited.

Ssebuliba noted that, “Key lessons have been drawn, which the farmers have to adjust to not limited to; the ability to swiftly adapt to improved business models, digitizing for improved resilience, business monitoring, putting in place business continuity plans for the unexpected occurrences, have a plan to guide prompt decision making, among others which are designed to manage any potential risk that might pose a threat to the business.”

Ssebuliba added that, “a number of opportunities need to be embraced for the desired yield in the agricultural value chain including; continuous product development to keep up with the need for innovations, adapting risk management frameworks, testing or develop business continuity plans, improvement and enhancement of digital channels plus digitizing businesses for the non-digitized.

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