Invest in agriculture to get economy back on track, leaders say

Political and business players have tasked government to invest more in the agricultural sector as a means to strengthen the economy.

The leaders – who were speaking at the Press Plenary, an initiative of the Uganda Parliamentary Press Association, held on 3 November – believe that with recent reports of Uganda’s economic downturn, it is imperative for more investment in the sector to spur growth.

Richard Byarugaba, executive director of the National Social Security Fund (NSSF) noted that the agricultural sector – if given more attention – has the ability to contribute immensely to the Gross Domestic Product (GDP).

“One of the things that we have failed to do as a nation is to look at where Uganda has comparative advantage,” Byarugaba said. “We know agriculture is a key sector but the problem is in the structures. There were recent reports on drought in Isingiro yet there is River Katonga flowing through the district. We can actually thrive at agriculture if we make good use of our God given resources like water, just like Egypt has done with the River Nile.”

Byarugaba was backed by the deputy speaker of Parliament, Jacob Oulanyah, who said that the private sector is currently grappling with the negative effects of the economy, seen through limited access to credit to grow their businesses.

“If we don’t give the private sector the cheap capital they need to invest in the economy, they will not have capacity,” Oulanyah said.  “So where is our EXIM bank of Uganda to support the private sector in investment? If you go to the Uganda Development Bank, go and find out whether the agricultural lending facility is going to the agricultural sector? Who are the people borrowing this money?”

The chairperson of Parliament’s National Economy committee, Syda Bbumba, the chairperson of parliament’s National Economy Committee, said there is need for laws that promote agriculture if Uganda claims to be an agro-based economy.

“When I saw the President the other day on a bicycle carrying a jerrican of water, how can we say that the drought has affected us when Uganda is 20% fresh water? What are we doing? What are the financiers doing to provide appropriate funding for irrigation? All the other problems hinge on low productivity in agriculture,” said Bbumba, a former finance minister.

Ogenga Latigo, who represents Agago North in parliament, said government should set up agricultural and rural development banks where farmers can access cheap credit.

Byarugaba blamed government’s borrowing from commercial banks for limiting credit to the private sector. The largest proportion of government securities – 45% – was held by commercial banks as at June 2015.

The NSSF managing director believes government should be doing more to channel savings to the pensions sector, which is a more viable option for long-term lending.

Only 2 million Ugandans out of the 15 million who are of working age save with pension schemes, Byarugaba said. Of these, 1.5 million save with NSSF while the rest save with a government scheme.

“About 13 million Ugandans do not have pension savings. This sector has been able to generate 7 trillion shillings. If we have been able to generate this, how much will we generate from 13 million? That’s where parliament needs to come in and reform the pension sector,” said Byarugaba.

The Press Plenary is a monthly forum bringing together key stakeholders in the parliamentary ecosystem; these include members of parliament, officials from the executive branch of government, the private sector, civil society, and the media.