By Mulengera Reporters
The Bank of Uganda-managed Agricultural Credit Facility (ACF) has channeled a disproportionately large share of its financing into grain trade, while agro-processing and post-harvest activities remain severely underfunded, exposing a major gap between the facility’s agricultural outreach and its contribution to value addition.
An Independent Evaluation of the Agricultural Credit Facility by the National Planning Authority (NPA), released in May 2026, shows that grain trade accounts for 42% of ACF financing by value, despite representing only 6% of the projects supported.
By comparison, on-farm production accounts for 90% of all ACF-supported projects, but receives just 32% of the total financing.
Agro-processing represents only 2% of projects, although it receives 18% of the financing, while post-harvest management also accounts for just 2% of projects and 8% of total disbursements.
The figures point to a striking mismatch in the way ACF resources are distributed across the agricultural value chain: the facility has a broad presence among primary producers, but much of its financial weight is concentrated in grain trading rather than activities that transform, preserve and add value to agricultural products.
The NPA evaluation notes that grain trading requires substantial working capital, which partly explains its large share of financing. However, the activity generally involves far less transformation than agro-processing and post-harvest management.
This, the evaluation suggests, raises concerns about missed opportunities to use ACF financing to drive deeper agricultural transformation.
The problem becomes more significant when viewed against Uganda’s persistent challenges with post-harvest losses, inadequate storage and limited value addition.
While increased production is important, the evaluation cautions that production gains can be undermined if farmers and businesses lack adequate storage, preservation and processing capacity.
Without these facilities, agricultural commodities remain vulnerable to spoilage and inefficiencies, limiting the income that producers can derive from increased production.
Post-harvest financing loses momentum
The NPA evaluation highlights the particularly weak position of post-harvest management within the ACF portfolio.
There were early signs of increased activity in the sector. Between June 2021 and March 2022, the number of funded post-harvest projects increased from 44 to 67, while loan disbursements rose from UGX56 billion to UGX98 billion.
But the growth failed to continue.
Between June 2022 and December 2024, the number of projects stalled at 99, while the cumulative value of loans subsequently declined.
The evaluation raises concern that the limited and declining support for post-harvest activities could undermine broader efforts to improve agricultural competitiveness, food security and value retention.
It also warns that insufficient financing for downstream activities could constrain rural industrialisation and job creation, limiting agriculture’s ability to deliver inclusive and sustainable economic growth.
A facility designed for transformation
The funding imbalance comes despite ACF’s broader mandate to promote the commercialization and modernization of Uganda’s agricultural sector.
Established in 2009, ACF provides short-, medium- and long-term financing for agricultural production, mechanization, modernization, agro-processing and grain trade on favourable terms compared with conventional loans.
The facility is managed by the Bank of Uganda, under the Directorate of Finance, in partnership with Participating Financial Institutions.
ACF is also recognised as a key Development Financing Mechanism under Uganda Vision 2040 and the Fourth National Development Plan (NDP IV), where agriculture is expected to play a central role in economic development and structural transformation.
Over the past 15 years, ACF has helped expand agricultural lending, with PFIs cumulatively lending about UGX485 billion, an annual average of roughly UGX32 billion, alongside UGX495.6 billion in government financing.
But the NPA findings suggest that the question is no longer simply whether ACF is putting money into agriculture.
It is where that money is going—and whether it is generating the kind of transformation the facility was established to deliver.
The heavy concentration of financing in grain trade, coupled with limited investment in post-harvest management and the relatively small number of agro-processing projects, suggests that significant opportunities remain to strengthen the downstream end of the agricultural value chain.
For Uganda, the stakes are high. Financing more production without sufficient investment in storage, processing and value addition risks leaving farmers and the economy dependent on the sale of largely unprocessed commodities.
The NPA evaluation therefore points to the need for ACF to rebalance its portfolio and give greater attention to activities that preserve agricultural output, add value and connect farmers to higher-value markets.
The numbers reveal an uncomfortable paradox: ACF is financing Uganda’s agricultural value chain, but the biggest share of its money is flowing into trading rather than transforming what farmers produce. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
