UGANDA
Looking ahead

Introduction- Industry- Agriculture Rebirth- Kampala: a city where construction is flourishing-
Insurance: a dynamic innovative sector- American FDI to Uganda


Agriculture rebirdth

Rapid growth and liberalization of Uganda's economy has seen the emergence of a number of companies including the Uganda Coffee Development Authority(UCDA) to supervise the coffee industry. Today through its research, production, marketing and advice on pricing, the UCDA has been able to rejuvenate the coffee industry, giving the country the much needed foreign exchange.

Mr Tress BUCYANAYANDI, Managing Director of U.C.D.A.

With improved nurseries to provide enough seedlings to farmers and projects replacement of aging coffee plants within the next 20 years the industry is set to boom. "On the farm, the farmer is now selling all his coffee for cash compared to the past where he would wait for a long time before being paid cash because of Coffee Marketing Board’s monopoly " Mr. Tress Bucyanayandi, managing director of UCDA observed.

"But because of competition by many exporters with their agents in the country-side farmers are paid cash promptly" he said. "By 1991, Uganda's average production was approximately 2 million 60kg bags but the recorded figure of last year was 4.24 million bags and previous year was 4.14 bags" according to Mr Bucyanayandi.

The main points UCDA is emphasising on are regulatory and development. No coffee goes out of Uganda without attaining a certificate of quality. "Although we have liberalised and the coffee belongs to the exporters, the final certificate which allows coffee to be exported is given by UCDA".

"It is done so, in order to make sure that commercial considerations by these private people do not compromise the quality of Uganda coffee. Uganda Coffee Robusta is the best in the World and all robusta coffee from other countries in the world are composed and judged against Uganda's coffee", the managing director noted.

Undoubtedly, UCDA has a success story to showcase. In 1995/96, Uganda exported 1,200 bags and in 1996/97 it rose to 4,800 bags. In Canada it went up from 600 to 1,200 bags. For robusta, last season, 16,000 bags were exported to the U.S.

Attempts are also being made to add value to the coffee. The first is to sell washed arabica and robusta to the specialty market, the second is to popularize local consumption of roasted and ground coffee and the third is to attract an investor to go intosoluble coffee production.

Coffee is Uganda's major resources

The preoccupation of UCDA is to stay in the coffee business and to do that the country intends to increase output to about 6 million bags the next two years.

Cotton also remains one of the back-bones of the Ugandan economy. Since liberalization of the cotton sub-sector and the establishment of the Cotton Development Organization(CDO) there has been an up turn in activity in the sector. "The year prior to liberalization, 15,000 bales of cotton were produced; in the first year of liberalization it went up to 33,000 bales and following year 60,000 bales. With the culture of liberalized marketing and processing and farmers becoming better informed, the country produced 110,000 bales this season", Mrs Jolly Sabune, Managing Director of CDO said. Mr. Jolly Sabune, believes that the El Nino phenomenon would claim 50% of the expected drop, but noted that the farmers enthusiasm is there, the marketing demand is there and the internal demand is developing.

Unlike coffee, quality for Uganda's cotton for the last 3 years has been the biggest fight with the industry participants. last year nearly 70% per cent of Uganda's cotton was marketed in the first three grades, Uganda cotton is a premium cotton on the international market", Mrs. Subane noted.

Uganda's cotton is a premium one

"This shows that if the right policies are put in place and marketing is good, Uganda's 50% subsistence farming community can depend on cotton as a cash crop and this would go a long way in poverty alleviation", Mrs. Sabune observed.

Funding for the cotton sub-sector is by the World Bankjointly with IFA and Uganda Government and in processing and technology by Lummus, and Eagle Continental both US based companion participate in the manufacturing of high speed grains. for the industry.

There is however a little cause for worry. The participation of big investors in the industry. Mrs. Subane says has become a source of worry but a lot of encouragement is being offered big companies to take advantage of the liberalization of the sector to enter into partnership with the small scale farmers to engage in large scale production.

"Whoever wants to grow cotton should come in because we have enough land. We want to add value to our lint products and also increase on our production because that is the way forward for industrialization", Mrs. Sabune said.

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This is the electronic edition of the special country report on Uganda published in FORBES Magazine's
June 1st  issue.
© World INvstment NEws, 1998.
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