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BUDGET: Gov’t to cut billions off travel, focus on agriculture

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#UGBUDGET20
✳ Sh45.5 trillion
✳ Cuts on travel, conferences
✳ Security Sh4.5 trillion
✳ Works Sh5.8 trillion
✳ Govt to borrow Sh11trillion

✅ 2020 – Sh45 trillion
✅ 2019 – Sh40 trillion
✅ 2018 – Sh32 trillion
✅ 2017 – Sh22 trillion
✅ 2016 – Sh20 trillion

Kampala, Uganda | THE INDEPENDENT | Government will announce a cut of billions of shillings off travel and conferences and ensure that ministries, departments and agencies become efficient as it faces limited funding to run the 2020/21 financial year budget to be read on Thursday.

Also, the government will seek to use agriculture as a resilient sector that will anchor the country’s growth next financial year as uncertainty over coronavirus crisis lingers on.

Margaret Kakande, the head of the Budget Monitoring Unit (BMAU) at the Ministry of Finance said the government will step back on sectors like tourism, giving it limited resources because it is now next to impossible to attract any visitors.

The tourism sector will be allocated 197 billion Shillings, a slight improvement from 193 billion Shillings in the 2019/20 financial despite it being the most battered by the effects of COVID-19. Kakande said that the government has cut billions off all ministries’ travel budget both for inland and foreign trips.

This started early from April with most agencies having their travel budgets cut to ‘zero’. Kakande said this will continue with the new financial year. Travel for different officials takes more than 100 billion Shillings in a particular financial year.

The budget which is expected to be at least 45.5 trillion Shillings will look to address three things – support the recovery from the coronavirus crisis, disaster-prone areas and then bear in mind of the 2021 general election.

Finance Minister Matia Kasaija will announce the biggest allocations to works and transport, security, interest payments, education and health in that order.

Works and Transport in particular will be allocated 5.8 trillion Shillings accounting for 12.5 percent of the budget. This is a slight drop from the 6.4 trillion Shillings the sector got in the 2019/20 financial year. Still it taking the biggest chunk is an indicator that the government hasn’t moved away from its focus on roads despite having a health pandemic. Kakande said some of the projects have been committed and it’s a legal obligation that the government continues paying them.

Security will be allocated 4.5 trillion Shillings but much of this money is classified. Interest payments, the money government pays to lenders for lending their money will be 4 trillion Shillings up from 3 trillion Shillings last year while the Health sector will get 2.7 trillion Shillings a slight improvement from the 2.5 trillion in the 2019/20 budget.

Kasaija will also announce a wide range cut in taxes in the push to recover from the coronavirus crisis but also appear to appease the 2021 general election voters. These include most agriculture inputs, cooking gas and processed milk.

Allan Mugisha, an auditor at Ernst and Young, said some of these cuts are good for the environment and boost the agriculture production. Of interest in the budget will be the source of funding. Kakande said domestic taxes and international taxes have been cut by the closure of businesses, borders and limited consumption.

She said they don’t expect a lot of grants from donors as their own countries are also suffering from coronavirus impact.

The major source of funding will be borrowing, she said. According to figures presented by Ernst and Young, the government will borrow up to 11 trillion Shillings from external sources for the 2020/21 budget. It expects grants of 1.7 trillion Shillings.

The money will go to both budget and project support.  The government hopes to raise 33 trillion Shillings from domestic sources.

Original Post: Independent

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Uganda’s coffee industry eyes new markets, value addition

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But the country still has a lot of coffee that is still being dried on the ground

Kampala, Uganda  Uganda’s coffee industry will seek new international market for their products to reduce over concentration on traditional buyers to boost farmer’s income.

Coffee is the country’s second biggest source of foreign exchange after tourism and provides a living for around 8 million people or about 19% of the population.

“In 2017, stakeholders in the coffee industry discussed the coffee road map on how to accelerate production but also increase income to the farmers,” said Emmanuel Niyibigira, managing director of the regulator, Uganda Coffee Development Authority.

“They were concerned that we need to have value addition for our coffee but also have the demand. We are looking at some markets such as China which has 1.4billion people and it is an emerging market. We are also looking at Middle East, Maghreb region, Eastern Europe though now we have this conflict (between Russia and Urkaine) and also the Balkan states.”

Uganda exports most of its coffee to Italy, Germany, Algeria, India and Sudan.

Niyibigira, who was speaking during the Agribusiness Mkutano 2022 at Mestil Hotel in Kampala on April.28, said the regulator is looking forward to supporting   local coffee businesses for value addition including soluble coffee processing plants.

He said the government aims to ensure that the country has at least two soluble coffee plants in the next five years. He said UCDA and the Uganda Development Corporation, a government investment arm, are carrying out a feasibility study to ascertain its viability.

The country has 38 registered coffee roasters although the government’s plan to have a soluble coffee plant has been on the table since 1994.

“We are also looking at branding our coffee. Most of our coffee is being exported and blended with other coffees due to its good aroma. We need to be recognized as an origin of Ugandan coffee,” Niyibigira said, adding that it is unacceptable that countries including  India, Vietnam and others in Latin America, which also produce huge volumes of coffee, import Ugandan coffee beans especially Robusta  only to blend with their coffees to boost  aroma and  fetch premium prices on the international market.

Niyibigira, however, noted that the industry still faces some challenges.

“We still have a lot of coffee that is still being dried on the ground,” he said, adding that low bean sizes, low productivity as well as pests and diseases are being addressed with new coffee varieties.

Tony Mugoya, the executive director at the Uganda Coffee Farmers Alliance said as the country pursues value addition in the coffee industry, farmers should be able to sale their products to the highest bidder.

“Uganda is a free market economy and us as farmers, we shall give our coffee to anyone who offers the highest price. That is all we want,” he said. “So the more the people or companies in the market, the more competition and the better for us.”

The government has in past weeks faced opposition over its move to exclusively grant Enrica Pinetti-owned Uganda Vinci Coffee Company to purchase and export the country’s coffee.

Mugoya said as the country embrace value addition, they should be aware of the existing tariff and non-tariff barriers in the international market.

Joseph Nkandu, the executive director of the National Union of Coffee Agribusiness and Farm Enterprises (Nucafe) said value addition in coffee need to be in the entire value chain.

“Farmers need to own the value addition component beyond the farm level as it enhances their income,” he said.

Nkandu said countries such as Uganda striving to embrace value addition need to enter into partnerships in targeted markets so that the product is easily accepted.

Martha Wandera, managing director at Kimco Coffee Ltd said the government should probably consider setting up a production plant for production of packaging materials for processed coffee to lower coffee prices  stimulate local demand.

She said also suggests that the costs of accessing quality mark be reduced to encourage coffee producers to access the services.

Uganda’s coffee export volumes and earnings has consistently grown over the past 20 years and accounts for 7% of the world’s production.

Last year, farmers exported 6.49million 60 kg bags of coffee worth US$629.8million compared to 5.36million 60kg bags in the 2019/2020 season worth US$512.22million in the previous year.

Source: The Independent 

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Uganda losing agricultural advantage to neighbours – UN.

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Although women are mostly involved in agricultural production, when it comes to marketing of produce, it is the men who dominate the decision-making.

What you need to know:

  • Speaking during the Agribusiness Mkutano (conference) in Kampala, Dr Dmitry Pozhidaev, the United Nations Capital Development Fund country and regional head, said before the 2000s, Uganda was ahead of all East African member states in terms of agriculture productivity, but Rwanda and Kenya have since become superior.

Uganda is losing its agricultural productivity advantage to neighboring countries due to lack of sufficient development in the sector, according to the United Nations Capital Development Fund.
Speaking during the Agribusiness Mkutano (conference) in Kampala, Dr Dmitry Pozhidaev, the United Nations Capital Development Fund country and regional head, said before the 2000s, Uganda was ahead of all East African member states in terms of agriculture productivity, but Rwanda and Kenya have since become superior.

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“Uganda has lost the agricultural productivity advantage [it held] over Rwanda in the early 2000s. It now lags behind Kenya and is much more behind South Africa,” he said, noting that because of low productivity, a number of people have moved to other sectors of economy yet they have low absorption capacity thus exacerbating unemployment.

Dr Pozhidaev also noted that since the 2000s, productivity in the services sector has doubled while that of manufacturing continues to fluctuate.
Under the National Development Plan II, government had sought to realise a 2.2 percent annual increase in agricultural productivity and increase in labour productivity by 40 percent.
However, this has not been achieved, thus frustrating the fight against unemployment in a country where 600,000 youth annually enter the job market.
Therefore, Dr Pozhidaev said, there is need to develop targeted policies, knowledge sharing, skill development and financing of improved agricultural productivity is to be achieved.

The Agribusiness Mkutano under the theme: Uganda@60: Fulfiling the agro-industrialisation agenda for Uganda seeks to reconginse the entire value addition chains as an important player in the fight against unemployment and industrialisation.
Ms Mona Muguma Ssebuliba, the aBi chief executive officer, said there is need to ensure that farmers access credit and grant to improve productivity.
For instance, she noted, aBi was playing a key role in supporting agribusinesses actors in coffee, dairy, cereals, horticulture, oil seeds and poultry value chain to increase their capacity to produce large quantities and quality commodities as well as supporting them with a number of processes to sufficiently supply both the local and international markets.

In the coffee value chain alone, Ms Ssebuliba said, aBi has in the last three years invested Shs17.7b to promote agro-industrialisation with specific interventions seeking to support establishment of coffee hurlers, coffee washing stations and capacity building to access international and niche markets.

Original Source: Monitor

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Tsetse flies invade Kiruhura district

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Tsetse flies spread nagana in livestock.

Kiruhura, Uganda. Kiruhura district has been invaded by tsetse flies with the residents calling for government support to eradicate the pests that have seen several cattle in the area die.

Nyabushozi County Member of Parliament, Wilson Kajwengye raised the matter of national importance during a plenary sitting on Tuesday, 03 May 2022 chaired by Speaker Anita Among.

Kajwengye said that for the past five years, cattle farmers in Kiruhura have borne the burden of fighting tsetse flies, whose cost he said was exorbitant and discouraging to commercial cattle farmers.

“Unfortunately, we have lost the battle because the disease is chronic and cows lose weight. The Ministry of Agriculture, Animal Industry and Fisheries has intervened but minimally,” said Kajwengye.

He said that an estimated 100,000 herds of cattle have been affected by the diseases caused by the flies.

Kajwengye said Kiruhura has registered notable financial loss resulting from the decline in milk and beef production.

“It is estimated that the district has lost Shs26 billion and Shs15 billion from sales of milk and beef respectively,” he said.

He prayed that the Ministry of Agriculture should urgently procure and distribute tsetse fly traps saying they are easy to use and are environmentally friendly.

Kajwengye also asked government to urgently provide equipment and other necessary laboratory consumables to Kiruhura district veterinary laboratory, which he said would help improve surveillance.

He also appealed to the ministry to work with the Ministry of Trade, Tourism and Antiquities to carryout studies on tsetse fly control measures that would include development of an appropriate acaricide that kills tsetse flies.

Speaker Among said she received similar reports from residents during her recent visit to Kiruhura and asked the Agriculture Ministry to urgently assess the disease burden in the district.

“I think what you need to do is to send a team there to assess the level of the damage that has been caused,” she said.

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