By Mulengera Reporters
Patricia Ojangole the Executive Director for Uganda Development Bank (UDB) has explained some of the specific things that must be in place or must happen for her bank to become more attracted to funding projects in agricultural sector.
Speaking at a consultative meeting NPA (closely working with UNDP) organized at Serena Conference Center recently to enrich the thinking process into NDP III, Ojangole said even the Shs200bn government has been giving over the 5 year period as recapitalization for UDB is grossly inadequate adding that they ideally need up to Shs5trn to adequately fund the different enterprises that require long term development financing.
And by the way, even the Shs200bn inadequate as Ojangole says it is, hasn’t yet been 100% delivered by government which Finance Ministry budgeting director Kenneth Mugambe says has been releasing Shs50bn every Financial Year because of resource constraints.
Ojangole explained to the large audience of private sector investors in the agricultural sector that UDB (which dreams of being the largest bank in Uganda) will be prioritizing projects whose implementation and funding enhances realization of SDGs and NDP-related objectives. She also said that, besides the Shs200bn capitalization the resource-constrained government is availing, UDB can support private sector by leveraging on its other global funding partners who are willing to financing “climate-smart agriculture.”
Ojangole caused quite a stir in the room when she revealed that UDB has many global funding partners ready to avail our private sector with affordable long term development financing especially for agri-based projects in the Industrial Parks “but the ugly truth is there are no bankable projects in place to attract and qualify for such financing.” On behalf of the audience, a clearly intrigued Patrick Kamara (who was moderating the session) wondered how this could be true and Ojangole said, strange as it sounded, this was the truth.
Ojangole said this is why synergies should be deepened providing an institutional framework through which her UDB can work with entities like the PPP Unit in the Finance Ministry to help the inadequately resourced/developed private sector to develop bankable agri-value addition projects leveraging on the 22 Industrial Parks whose development government is currently prioritizing.
Saying UDB had done its best through the 7 (seven) agri-based clients it’s currently financing in the Namanve Industrial Park, Ojangole said once the potential private sector borrowers are helped or capacitated by the PPP Unit to develop bankable projects, UDB can leverage on its technical capabilities to champion mobilization of global funding on their behalf.
PARLIAMENT’ TAKE
Speaking on the same panel discussion, Dr. Keefa Kiwanuka (pictured above who chairs the Natural Resources Committee of Parliament) said the fact that agricultural sector which employs 68% of the population contributes only 30% of the GDP (the country’s total wealth) is proof value addition-based interventions must comprehensively be undertaken by government to reverse that anomaly. Kiwanuka, who kept asking many rhetorical questions which he said the audience didn’t have to answer, said time had come for the budget to be looked at and explained to citizens as a huge contradiction because that’s what it is. “We keep telling citizens that it’s a Shs40trn budget but the reality is over Shs10trn isn’t available to government for spending into the population because it’s going into debt-servicing. How can we expect such a budget to lead us to the promised land concerning value addition and transformation of agriculture?”
He told the NPA bosses, who were led by their chairperson Prof Pamela Mbabazi, that the mineral sector over which his committee superintends has potential to vastly contribute to Uganda’s industrialization (as prioritized under NDP III) but the state the sector is in leaves a lot to be desired.
He wondered what happened for the mineral sector, that used to contribute 30% of the country’s GDP to have declined to the mere 0.5% it currently contributes.
Attributing this to the advent of speculators and artisanal miners, both of whom are inadequately regulated, Kiwanuka said it’s unacceptable that more than 150,000 actors involved in the informal gold trade annually produce only 30kgs of gold. He decried the fact that the licensing and certification of miners which used to be a large source of revenue for government is now in disarray.
He nevertheless commended efforts by the Energy Ministry to undertake skilling programs aimed at emancipating artisanal miners. Kiwanuka urged NPA to enact NDP III in a manner that ensures adequate inclusion of artisanal miners whom he said are often sidelined whenever more institutionalized and capacitated investors are eventually brought into mining areas by government. (For comments, call, text or whatsapp us on 0703164755 or email us at mulengera2040@gmail.com).
