Business booms in northern Uganda as UK offers more funds

Report from The Observer, Uganda
By Moses Mugalu - Monday, 02 August 2010 at 11:13
Business booms in northern Uganda as UK offers more funds

The once war-torn northern Uganda has yet again received funds from the United Kingdom as efforts to develop the region intensify. DFID, the UK’s Department for International Development, has offered 16.6 million pounds to rebuild northern Uganda, and lay a strong foundation for business opportunities.

Jane Rintoul, the Head of DFID office in Uganda, estimated that the money will create 20,000 jobs, although such estimates tend to be conservative.

According to the memorandum of understanding between DFID and Government, 13 million pounds will be given as grants to boost viable investments in the region. Another one million pounds is to be spent on youth training programmes, while the Uganda Investment Authority will use the remaining two million pounds to carry out what they term an “economic recovery analysis.”

In trying to resuscitate the business potential of northern Uganda, government, together with DFID and other donors, is deepening a key market for beverage and palm oil companies, among others, which are part of the largest taxpayers.

Mukwano Group’s top officials were late last month in Lira and Oyam districts, dangling a Shs 20 billion bait to the farmers if they could double the production of sunflowers. Northern Uganda has virgin lands for the growing of sun flowers, which companies like Mukwano use to produce cooking oil.

Other firms making trips to northern Uganda include Nile Breweries Limited, which gets sorghum for the production of beer. British American Tobacco Limited also gets a lot of tobacco from the region.

Rintoul explained that grants will directly support the creation of new businesses and the expansion of existing enterprises in agricultural development and trade. This means foreign investors who plan to start doing business in northern Uganda qualify to apply for the DFID grants.

The Private Sector Foundation Uganda has a plan on how to take advantage of the funds. Gideon Badagawa, PSFU Executive Director, said they will organize farmers into cooperatives to access the grants. Officials say that under the cooperative initiative, thousands of small scale farmers will benefit from better market access, storage facilities for their produce as well as share knowledge on modern production methods.

Through their Business Uganda Development Scheme, a support programme, Badagawa says PSFU will also train farmers and help them add value to their produce before reaching the market. “We’ll use part of the grant to purchase equipment for farmers to add value to their produce, look for markets and impart skills so that farmers can sustain their incomes other than giving handouts,” Badagawa said.

While the funds from DFID are to directly benefit the people in northern Uganda, they have a wider implication beyond the country’s borders. Northern Uganda remains the easiest gateway into Southern Sudan, a place almost the size of Uganda with a mineral potential. Businesses, such as construction and retail services, are booming in Southern Sudan after security returned to the area in 2005 following a two-decade insurgence against its neighbour in the north.

Southern Sudan is also rich in oil, with companies from China already prospecting the black gold. With Ugandans scouting for foreign markets to sell their products, Southern Sudan presents a larger and more profitable market.

Rintoul said DFID has committed another 24 million pounds to construct residential houses for teachers and health workers in the region.

At least two million people who returned from the refugee camps in the region at the end of the war are engaged in agricultural activities. They mainly grow simsim, groundnuts, citrus fruits and cotton, whose products need value addition to attract better revenues.

mugalu@observer.ug