The European Union Delegation in Uganda and the United Nations Capital Development Fund (UNCDF) have announced a Shs 48.9bn injection aimed at promoting sustainable agribusiness growth throughout Uganda.
The facility, known as Support to Agricultural Revitalization and Transformation (START) Phase II geared towards catalysing economic development, job creation, and sustainable growth in the country.
EU and UNCDF say START Phase I saw over 50 SMEs benefiting from Shs 13.5 billion in concessional loans and grants and that the newly unveiled START II is poised to expand its reach and impact.
Sophie De Coninck, Head of Uganda Office at UNCDF, hailed the launch of START II as a “pivotal milestone in unleashing the potential of agribusiness SMEs.”
Sophie said, “By bridging the financing gap and enhancing technical capabilities, the initiative aims to drive sustainable growth, generate employment opportunities, and foster economic resilience.”
The Agricultural Sector continues to be the most important sector in Uganda, employing approximately 72% of the population and contributing about 32% to the GDP.
However, productivity is limited by reliance on natural weather conditions and the still widespread use of traditional methods and equipment.
START Phase II aims to revolutionise the agribusiness landscape in Uganda by strengthening institutional capacity, enhancing technical skills, and facilitating access to finance.
With approximately 1.1 million Micro-, Small and Medium-sized Enterprises (MSMEs) employing around 2.5 million people in Uganda, these businesses are crucial for the country’s private sector and development.
However, obstacles such as poor management, lack of records, collateral, and capital have hindered their growth potential.
START II seeks to address these challenges head-on, paving the way for a more vibrant and sustainable agribusiness sector in Uganda.
Officials said the goal of the project is fostering economic development, job creation, and sustainable growth and making a lasting impact across the country.
Expansion
By addressing the challenges faced by agribusiness SMEs in accessing financing for expansion and development, START II seeks to unlock their potential and drive inclusive growth.
EU and UNCDF officials say they are keen on promoting value addition and agro-processing, providing agribusiness SMEs with access to affordable medium-term financing.
“By scaling up operations and embracing sustainable practices, these SMEs can not only grow their businesses but also contribute to the country’s economic resilience and prosperity,” reads a joint statement from both organisations.
“Notably, the initiative pledges to allocate 30% of its resources to promoting gender equality and supporting green SMEs, ensuring inclusivity and environmental sustainability.”
European Union Ambassador to Uganda Jan Sadek said, “by empowering agribusiness SMEs and creating an enabling environment for economic resilience, the EU aims to contribute to Uganda’s long-term development.”
The initiative will collaborate closely with a wide array of stakeholders, including financial institutions, private sector foundations, government bodies, and international organisations.
Key partners involved in the implementation of the START facility include the Private Sector Foundation Uganda (PSFU), the Federation of Small and Medium Enterprises (FSME), Aceli Africa, and the Uganda Development Bank Limited (UDB).
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