How important is agriculture in Uganda?
Agriculture remains the major source of livelihood in Uganda. According to the Uganda National Household Survey (UNHS) 2016/17, the bigger proportion of the working population is engaged in agriculture, forestry and fishing (65%). Among the females in the working population, 70% are engaged in agriculture compared to 58% of the males.
Furthermore, 38% of persons in employment were in paid employment with a higher proportion of males (46%) compared to females (28%). The Agricultural sector accounted for the largest share of employment (36%).
The agriculture sector had a total contribution to GDP at current prices of 24.9 percent in the FY 2016/17 compared to 23.7 percent in FY 2015/16. The food crop sub sector registered the highest contribution within the agricultural sector of 13.6 percent in FY 2016/17, an increase from 12.1 percent in FY 2015/16.
Why invest in Uganda’s Agricultural Sector?
Uganda’s agricultural sector presents multiple highly-profitable investment opportunities both for profit-oriented investments and partnerships.
As one of the 55 member states of the African Union, Uganda has steadily picked the pace in agricultural development and was highlighted as one of the 20 leading countries in delivery on development targets of the Comprehensive Africa Agriculture Development Programme (CAADP).
The transformation presents even more opportunities for investment as explored in the Agriculture Sector Strategic Plan, accessible on the home page of this website.
With notable success registered in Public Private Partnerships and steady increase in investment by government each financial year, Uganda is a dependable destination for investment and highly competitive player on the international market.
Greater fortunes for local and international investors
The Value of agricultural exports as a percentage of the value of total exports stood at 72.9% in the FY 2016/17 representing a drop from 74.1% in 2015/16. The value of traditional exports increased from 2016 to 2017 by 36%. This was attributed to the increased (19%) volume of traditional exports.
Steady growth in production of root crops, plantain banana, and pulses
The overall production of the major root crops (sweet potatoes, potatoes and cassava) increased from 5,196,810 tons in 2016 to 5,862,280 tons in 2017 indicating a 12% increment. This positive shift was attributed to the relatively stable rainfall.
The production of plantain banana increased from 4,530,880 tons in 2016 to 4,803,000 tons in 2017 reflecting an increase of 6%. This was attributed to the relatively stable weather and use of disease resistant planting materials.
The production of the major pulses (beans, field peas, cow peas, pigeon peas) increased by approximately 14% from 2016 to 2017 with beans contributing significantly to the increase in the quantity of pulses produced.
The production of the major Oil Crops including simsim, groundnuts, soybean and sunflower generally increased by 19% from 2016 to 2017. This was attributed to the increased use of improved seed and enhanced extension services provided to farmers.
Positive trends, increasing profitability of traditional cash crops
The main traditional cash crops of Uganda include: Coffee, Tea, Cotton and Tobacco. Coffee contributes the highest revenue for the country.
Cotton which is one of the main traditional cash crops produced in Uganda and contributes greatly to the country’s GDP and household livelihood is on a steady and promising growth path with increased potential of creating jobs and value addition targeting both local and international markets.
The quantity of cotton produced declined between FY 2013/14 and 2014/15 and increased from 20,339MT in 2015/16 to 27,950MT in 2016/17. The statistics also indicate that the country exports (93%) most of the cotton produced as reported by the Cotton Development Organisation (CDO).
Similar trends have been experienced with tea, cocoa and coffee production since 2012 as highlighted below.
The production of Cocoa increased from 17,935 tons in 2012 to 25,712 tons in 2016 while that of tea increased from 57,932MT in 2012 to 69,000MT in 2016.
The quantity of coffee produced increased from 4.5 million 60 kg bags in FY 2015/16 to 5.4 million 60 kg bags in FY 2016/17, an increase of 21%.
The targeted quantity of coffee exports for the FY 2016/17 was 3.9 million 60-kilo bags. The cumulative quantity of exports for the period July 2016 to June 2017 was 4,186,606 60-kilo bags (3,188,810 bags Robusta and 997,796 bags Arabica) compared to 3,556,692 bags the previous year, an increase of 18%.
The projected value of coffee exports for the FY 2016/17 was US$ 478 million. The cumulative value of exports realized was US$ 490 million (Robusta US$ 350 million; Arabica US$ 140 million) compared to US$ 351 million (Robusta US$ 249; Arabica US$ 102) for the previous FY2015/16, an increase of 40%.