Uganda's opportunity in Agriculture is plentiful and ripe

Tuesday December 3 2019



Raymond Mugisha

Raymond Mugisha 

By Raymond Mugisha

According to the Food and Agriculture Organisation (FAO), Uganda's fertile agricultural land has the potential to feed 200 million people. Only 35 per cent of the country’s arable land is being cultivated while 80 per cent of all the land is arable.

There is a general lack of irrigation and fertiliser use is not developed. As a result, production is greatly vulnerable to rainfall and pests. Uganda has one of the highest irrigation potentials in the world with over 15 per cent of her surface area covered by fresh water resources. The utilisation rate of the entire renewable surface water resources of the country was only 0.01 per cent as of 2013.

With current population of about 40 million people, Uganda therefore has the capacity to feed a population of five times the current number of people in the country. Put another way, currently Uganda has potential to produce about half of the food needed to feed herself together with Ethiopia, Tanzania, Kenya, Rwanda, South Sudan, Mozambique, Eritrea, Madagascar, Malawi, Zambia, Zimbabwe, Somalia, Burundi, Mauritius, Djibouti, Comoros, Mayotte, Reunion and Seychelles.

Uganda has aggressively pursued trade with other African countries, and currently about 50 per cent of the country’s exports are within Africa. This implies that Uganda is on the right path to utilising intra-continental trade opportunities and as such can ably market food that the country produces, within the continent.

The continent of Africa currently imports food worth about $35 billion (about Shs129 trillion), which is about the size of Uganda’s current GDP going by recent media reports. There is therefore a huge opportunity in food trade on the continent. With the continent’s population continuing to shoot, this opportunity can only expand. By 2050, a quarter of all the people in the world will be in Africa. Currently Africa accounts for about 17 per cent of global population. As such,
Uganda has an open chance to cash in on this opportunity to feed this growing population and record impressive economic dividends.

Uganda’s leading export crop remains coffee and in 2017, the country earned $555.34million (about Shs2 trillion) from it. The major export destination for Uganda’s coffee is Europe which takes up to 70 per cent of Uganda’s output in some months. After coffee, maize earned Uganda $88.53million (about Shs326.8 billion) in foreign exchange in 2017.

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Tea came in third position, earning the country $79.58million (about Shs293.7billion) in 2017. Beans earned Uganda $77.88million (about Shs287.4billion) while the country fetched $57.76million (about Shs213.2billion) from flower exports. Cocoa beans brought in $54.34million (Shs200.5billion) while tobacco earned the country $46.30million (about Shs170.9billion).

Fruits and vegetables fetched $37.46million (about Shs138.3billion) and rice earned $27.19million (about Shs100.4billion) in 2017. Simsim fetched $17.17million (about Shs63.38billion) for the country.

The above were the leading export crops for the country in the year 2017, with coffee accounting for 53 per cent of them all, in revenue terms.

In comparison, information available about Africa’s food imports indicates that for example USA exports huge quantities of grain to the continent, mainly to Nigeria and South Africa. Up to 50 per cent of exports of USA to Sub-Saharan Africa were grains.

Indeed, food stuffs are among the top imports of the continent which was initially a major food exporter to other continents. The turn-around that has put Africa in the position of being heavily reliant on other jurisdictions for food is attributable mainly to the ever-expanding population, poor infrastructure and weaknesses in management of local agricultural industries. If these issues are addressed, the continent will turn the situation around in her favour.

As a country, Uganda has made huge investments in infrastructure in recent years, among other reasons to enable advancement of agriculture through enhanced in-country market connectivity and improved agricultural support structures.

However, like the rest of the continent, Uganda still needs to address some weaknesses in the agriculture sector, among which are; to revolutionise irrigation and combat threats of climate change; address challenges around land tenure systems; as well as cover other emerging and administrative challenges that put food production at risk.

Tapping into the opportunity in food supply on the continent is possibly the most feasible and sustainable way for Uganda to recoup investment in infrastructure and realise fundamental economic reforms.

There is actually greater opportunity for realising returns from food production for the African market, than what we are currently earning, from producing traditional cash crops for export to the western world. Countries like the United States are strategising to maximize this opportunity and increase their food imports into Africa. A country as endowed with arable, fertile land as Uganda has a big prospect in the above space. That agriculture is the backbone of Uganda’s economy is possibly truer today than it ever was.

Raymond is a Chartered Risk Analyst and risk management consultant
rmugisha@afriaccent.com

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