Agro-Industrialisation can unlock our economic growth

Agriculture is often considered the backbone of Uganda's economy, employing over 70 percent of the population and contributing roughly 24 percent of GDP. However, its potential remains largely untapped.

One of the challenges limiting the sector's earning potential is post-harvest losses, estimated at 30-40 percent for grains such as maize and 30-80 percent for fresh fruits and vegetables. 

However, Agro-industrialisation, which involves transforming raw agricultural produce into high-value products, offers the country an opportunity to reduce post-harvest losses, promote economic growth, reduce unemployment, and enhance food security.

Uganda is a major producer of crops such as coffee, maize, bananas, and cassava but most of these commodities are exported in their raw form, which often fetch low prices on the international market.

Agro-industrialisation has the potential to transform the entire agriculture value chain, broaden markets and increase household incomes. Uganda's population is projected to reach about 100 million by 2050, according to the United Nations. This will require strategic interventions to create more jobs and increase food security.

According to the World Bank, agro-processing industries could create more than 17 million jobs across Africa by 2030. Therefore, with targeted investments in the sector, Uganda can capture a significant share of the opportunities it presents.Beyond economic growth and job creation, agro-industrialisation has the power to improve food security.

However, there is a need to invest in storage, processing, and distribution infrastructure, to reduce food losses and ensure that surplus produce reaches markets during times of shortage. This is critical for rural communities often vulnerable to food insecurity due to poor infrastructure and post-harvest losses.

One of the major challenges Uganda faces in realising agro-industrialisation is limited access to modern agricultural technology. Smallholder farmers, who constitute the bulk of the agricultural workforce, often have limited access to improved seeds, fertilisers, and mechanisation. As a result, productivity remains low.

The average yield for maize, one of Uganda’s staple crops, is around 2.5 tonnes per hectare, compared to potential yields of 5-7 tons per hectare with improved practices. Climate change also poses a threat to agricultural productivity, with unpredictable rainfall patterns and increased incidences of drought and flooding affecting harvests. 

Therefore, it is essential to prioritise climate-resilient agriculture, which includes adopting drought-resistant crops, promoting irrigation, and providing farmers with climate-smart agricultural practices.

Successful implementation of agro-industrialisation requires strong collaboration between the government, private sector, and development partners. The Ugandan government has already taken steps, such as the Agro-Industrialisation Program under the Third National Development Plan (NDPIII).

However, more can be done to create an enabling environment for private investment in this sector. The government can support the development of value chains that connect farmers to markets. This includes investing in infrastructure such as roads and storage facilities, promoting mechanisation, supporting irrigation systems, energy, and increasing access to finance for smallholder farmers and agribusinesses.

Especially considering that lack of finance remains one of the biggest barriers to scaling agricultural enterprises. 

Development partners like the Alliance for a Green Revolution in Africa (AGRA) are currently supporting smallholder farmers to access improved inputs, training, and markets. Through partnerships with local financial institutions, we are also providing much-needed capital to agro-entrepreneurs, who often lack access to affordable financing, and promoting climate-smart agriculture. 

Mr David Wozemba is the AGRA Uganda Country Director