OPEC Fund signs US$30m loan to enhance productivity for smallholder farmers in Uganda

UGANDA – The OPEC Fund for International Development signed a US$30 million loan agreement with Uganda to help improve food security and incomes for more than 120,000 smallholder households in the northern and north-eastern regions engaged in the production and marketing of oil seeds (groundnuts, sunflower, sesame and soy).

The National Oil Seeds Project is co-financed by the International Fund for Agricultural Development (IFAD) and the Ugandan government.

The Ugandan government’s latest Agricultural Sector Strategic Plan highlights oil seeds as part of the four strategic commodities expected to lead the transformation of the smallholder sector from subsistence to commercial farming. 

Within the framework of this plan, the OPEC Fund’s financing will be used to develop infrastructure across 53 beneficiary districts and support the operations of approximately 200 oils seed clusters. 

Works will include construction and rehabilitation of 2,500 km of roads situated in and around the oil seed clusters and installation of drainage structures, as well as road water harvesting mechanisms for crop and livestock watering.

“The OPEC Fund is pleased to partner with IFAD and the government of Uganda to support this project, which will enhance agricultural resilience and improve food security.”

Abdulhamid Alkhalifa – OPEC Fund Director-General

It is anticipated that circa 60 percent of the beneficiaries will be women.  Young people between the ages of 18 and 35 will be involved in the project as producers, entrepreneurs and small-scale processors by providing them with various incentives such as access to farm machinery and agricultural training.

Abdulhamid Alkhalifa, OPEC Fund Director-General said, “As Uganda recovers from disruptions related to Covid-19, agriculture becomes increasingly significant for the livelihood of the Ugandan people.

The OPEC Fund is pleased to partner with IFAD and the government of Uganda to support this project, which will enhance agricultural resilience and improve food security.”

Including the present loan, the OPEC Fund has committed more than US$221 million to Uganda under its public and private sector and trade finance lending operations. 

The funding has supported Uganda’s agriculture, energy, financial (SMEs), transportation, education and health sectors.

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Meanwhile, Ethiopia and Japan have signed and exchanged notes on the Grant Aid for Economic and Social Development Program (provision of rice) amounting to 120 million Birr (US$2.7m).

Finance State Minister, Yasmin Wohabrebbi said the support is aimed at curbing the food and nutrition security challenges in Ethiopia by contributing to the increase in the availability of cereals in the market.

The state minister expressed that the agreement will reinforce cooperation between the two partners and to lead to further possibilities to achieve their common goals.

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