New financing to the tune of Shs34 billion has been made available to support agribusinesses in Uganda as new funding partners; Soros Economic Development Fund, part of Open Society Foundation (OSF) and FCA Investment (FCAI) join the Yield Uganda Investment Fund.

The Agribusiness Impact Fund, set up in January 2017 by the European Union (EU), through the International Fund for Agricultural Development (IFAD) and the National Social Security Fund (NSSF), with an initial £12 million investment, has now hit the £20 million (UGX 85 billion) mark in total commitments, following an £8million investment from the Open Society Foundations and FCA Investments.

“Mobilizing investment for the agro industrialization of Uganda had been the main reason for the creation of Yield Uganda Investment Fund by the EU.

“In 2017 NSSF joined the EU to launch the first investment fund and today FCA investments and open society foundations add substantial capital which will allow Uganda agribusiness companies to access the needed long-term capital for industrialization.

“As outlined in the European external investment plan, the EU is aiming at attracting capital into Uganda to foster development in agriculture, trade and industrialization,” said EU ambassador to Uganda, Attilio Pacifici.

The Yield Uganda Investment Fund is a partnership between public and private investors that offers innovative and tailored financial solutions, using equity, semi-equity and debt, to small and medium-sized enterprises (SMEs) having the potential to generate both strong financial returns and significant social impact.

Deloitte Uganda and Pearl Capital Partners Uganda (PCP) established the fund, currently managed by PCP Uganda, with the mandate to make an investment in the rage of about Shs 1 billion to Shs8.5 billion.

To date, Yield has made an investment of over Shs8 billion in SESACO limited, an agro-processing company specializing in Soya products, CECOFA, a coffee processor, and Chemiphar, an analytical laboratory providing testing and inspection services to SME businesses.

The fund targets agriculture-related business across all value chains including the supply of agricultural inputs, production and agro-processing within all sub-sectors, post-harvest storage and distribution, but also peripheral activities such as transportation, communications and certification.

The fund seeks to support businesses with a clear competitive advantage and ambitious local management.

The fund targets to improve over 100,000 rural households livelihoods through improving access to markets for their produce, higher quality agricultural inputs and services; creating jobs and employment opportunities, ensure food security while generating income, foreign exchange and new export opportunities, all fundamentally contributing to Uganda’s economic growth and goal to eradicate poverty.

High-quality Business Development Support (BDS) is critically important when modernizing and expanding yield funds investee companies to make them more effective, growth-oriented and profitable.

An integral and complementary part of the fund’s investment process is to support the operations of its investee companies through matching grants for BDS.

Typical areas of the funds BDs support include company governance, accounting, budgeting, auditing and tax compliance, innovation and technology transfer, marketing studies, and the adoption of international product quality and safety standards. This extra service to yield funds investee companies is funded with grants from the EU managed by IFAD.

“IFAD is reassured by the confidence and delighted to welcome open society foundations and FCA investment to the Yield Uganda fund as part of the 2nd close investors,” noted IFAD Country Director for Uganda, Laskhmi Moola.

“Their additional financing, to yield, and their expertise in the impact sector will add value to the existing partnerships. Together with OSF and FCAI, we will amplify the impact of the Yield Uganda fund by continuing to improve the fiscal environment for the Uganda agri-SMEs and improve the lives of the smallholder farmers they work with,” she added.

“Agriculture plays a vital role in economic growth and sustainable development. Investment in the sector is an effective instrument to alleviate poverty and enhance food security.

Gabriel Ajedra, Minister of State for Finance, General Duties further applauded the Fund saying, “Uganda is pleased to have the Yield Uganda Fund which is dedicated to Uganda to provide capital through debt and equity to agriculture-related businesses across all value chains.

Gabriel Ajedra, Minister of State for Finance, General Duties further applauded the Fund saying, “Uganda is pleased to have the Yield Uganda Fund which is dedicated to Uganda to provide capital through debt and equity to agriculture-related businesses across all value chains.
“Evidence suggests that gross domestic product (GDP) growth originating from agriculture is twice as effective in reducing poverty as GDP growth linked to the non-agricultural sectors, yet the sector is still underfunded. The Yield Uganda Investment Fund is a great opportunity for NSSF to support the sector,” said NSSF Deputy Managing Director, Patrick Ayota.

He added that the investment is in line with NSSF’s diversification strategy to increase exposure to equities to about 25% of its total portfolio from the current 18%, as well as supporting home-grown companies that have good corporate governance and are willing to provide NSSF with an exit through the stock exchange.

“Our investment in Yield fund Uganda is triple vote; in the resilience of Uganda’s Agricultural sector, in the power of the private sector to deliver improved livelihoods and in the ability of pear capital partners to direct the investment to the most deserving SMEs.

“FCA investment views the development of the private sectors as the most viable means to bring about economic development and prosperity in Uganda and with this investment, we hope to create thousands of jobs within the agriculture value chain and sustainably increase smallholder farmers’ incomes in addition to catalysing additional investment in the sector,” stated Jukka-Pekka Karkkainnen, CEO, FCA Investments.

“We invested in the Yield fund because we want to direct capital to local agribusinesses and entrepreneurs that are interested in sharing benefits with smallholder farmers, rather than exploiting them.

“We were also attracted by the fact that the fund is based in Kampala, giving it the ability to work closely with the businesses it invests in as they strengthen and expand. We believed this team is the right one to tackle some challenges that the sectors present.

“We hope that this initiative can provide a new model for successful investment in smallholder farmers that others will follow across the continent. And we are thrilled to provide our support,” added Jocelyn Songco, Principal Soros Economic Development Fund, Open Society Foundations.

“Some of the foundations and key principles from which Yield Fund Uganda was first established in early 2017 have been built around the unique conducive agri-business environment that we find here in Uganda; an environment which is not only rich in potential but which also gives us the opportunity to bring about real change and impact upon the lives of smallholder farmers and rural communities that remain the majority agri-partners in various ways now and over the coming years.

“This Ugandan domiciled yield fund is uniquely positioned to drive forward that change, by making strategic, effective and efficient on the ground investments. We are committed to bringing flexible and innovative financing solutions to the agri-business SME community, enabling several partners’ prosperity for the future.

“By utilizing our impact investing experiences and principles, we believe that we shall also create the core foundation from which the SME agri-business sector and smallholder farmer communities can develop and grow together,” said Dr Edward Isingoma, Managing Partners, Pearl Capital Partners (PCP)

Gabriel Ajedra, Minister of State for Finance, General Duties further applauded the Fund saying, “Uganda is pleased to have the Yield Uganda Fund which is dedicated to Uganda to provide capital through debt and equity to agriculture-related businesses across all value chains including, supply agricultural inputs, productions and agro-processing, post-harvest storage and distribution.

“Yield Uganda funds plan of providing first loss protection to equity investors will address the challenges of low and limited access to capital and the perceived high risk involved in agricultural business.

“Therefore an investment fund of this nature will go a long way to uplift the agricultural sector and most especially when the country is focusing on commercial agriculture, industrialization and value additions.”

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The International Coffee Organisation (ICO) in its coffee market report, shows that the composite price of coffee averaged US $99.97 cents/lb (0.45kg) in June 2019, 7.1 per cent higher than in May 2019.

According to the report, that was the first increase in the monthly average since January 2019, when prices rose by 0.9 per cent to US $101.56 cents/lb.

The reports says daily composite indicator ranged between US $95.17 cents/lb on 18 June and US $105.25 cents/lb on 28 June. “The daily price rose above 100 US cents/lb for the first time since 18 February 2019 on 30 May and remained above that level on 9 out 20 days during the month of June,” it says.

May exports

In May 2019, world coffee exports rose by 19.4 percent to 11.6 million bags compared to May 2018, it says. The growth, according the report, was led by shipments of Brazilian Naturals coffee type, which rose by 65.4 percent to 3.5 million bags. However, in May 2018, shipments from Brazil were well below expectations due to a nationwide trucking strike that delayed delivery of coffee to ports. Brazil’s May exports averaged 2.73 million bags from 2013 to 2017.

Robusta exports

According to the report, Robusta exports grew by 8.3 per cent to 4.05 million bags in May 2019 compared to the same month one year ago. Significant growth in Robusta shipments from Brazil, where exports of green Robusta rose from 46,621 bags to 376,257 bags as well as increases in exports from Tanzania and Uganda offset the 5.1 per cent decline in Vietnam’s green Robusta shipments. Exports of Colombian Milds grew by 6.1 per cent to 1.15 million bags while Other Milds increased by 4.4 per cent to 2.9 million bags.

Meanwhile the report says global exports in the first eight months of coffee year 2018/19 reached 86.57 million bags, an increase of 7.5 per cent compared to the same period one year ago. Shipments of Brazilian Naturals rose by 21.9 per cent to 28.22 million bags while Colombian Milds increased by 6.8 per cent to 10.13 million bags. Robusta exports increased by 3 per cent to 30.65 million bags in October 2018 to May 2019 while Other Milds fell by 3 per cent to 17.57 million bags.

Global production

The reports says Global coffee production is estimated at 167.75 million bags in coffee year 2018/19, compared to global consumption of 164.64 million bags. Although the increase in imports during the first six months of the coffee year indicates ongoing demand growth, it has not kept pace with the rise in global production in the last two years. As a results, there is a surplus of 3.11 million bags in coffee year 2018/19 following a surplus of 3.84 million bags in coffee year 2017/18.

Imports by ICO importing Members and the United States, which on average account for around 75 per cent of global imports, increased by 4.9 per cent to 66.56 million bags in the first half of coffee year 2018/19, the report says. Imports by the EU in October 2018 to March 2019 rose by 3.5 per cent to 42.71 million bags, and those of the United States increased by 8.1 per cent to 14.98 million bags.

Imports by Japan grew by 13.5 per cent to 3.92 million bags, and the Russian Federation by 4.9 per cent to 2.77 million bags. In contrast, Switzerland’s imports declined by 7.4 per cent to 1.53 million bags in the first six months of coffee year 2018/19. Imports by Norway and Tunisia increased by 1.3 per cent to 364,958 bags and 12.9 per cent to 282,259 bags, respectively.

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An alliance of East African citizen groups announced Tuesday they were suing Rwanda and Uganda and in a regional court for financial losses resulting from a border dispute between the feuding nations.

Trade has been severely disrupted since late February when Rwanda abruptly closed the border at Gatuna shared with Uganda and severing a major economic land route used daily by traders and other business people on both sides.

The closure followed months of rising tensions between the two countries that have exchanged public accusations of spying in each other’s territory. Rwanda put an embargo on Uganda’s goods and stopped its citizens from traveling to Uganda, saying it could not guarantee their security.

Apart from a brief reopening of the border post in June the frontier has remained shut, damaging the local economies of both countries reliant on cross-border trade to survive. Rwandan claims it is rehabilitating the road.

Three civil society organisations, on behalf of communities along the border, said they had filed a complaint with the East African Court of Justice demanding reparations from Uganda and Rwanda for their losses.

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The Speaker of Parliament, Rebecca Kadaga, has urged foreign affairs ministers in Africa to take note of and address the restrictions imposed on Africans as they try to secure visas to overseas countries.

Kadaga notes that the time lag of receiving a visa to other countries, most times of which are given out of the country of the passport’s origin, have proved a barrier and have many a time limited the movement of Africans.

“When the Schengen arrangement started in 1995, a visa of Germany could take you anywhere in Europe, but now almost each country wants the processing of their own visas and it seems our foreign affairs office is not aware about this,” says Kadaga.

She notes that the best course of action by the foreign affairs office to check on this challenge faced by citizens is to set up a reciprocal arrangement which would go a long way in easing access to visas by Ugandans.

“Uganda processes visas at the port of entry whereby persons getting into the country can get a visa on arrival at Entebbe Airport. We need to set up such arrangements with other major countries which our people travel to so as to ease their access to visas,” adds Kadaga.

The Speaker was yesterday addressing Ugandans living in Canada at the 3rd Uganda Canadian Diaspora Business Expo and Convention in Toronto, Canada.

The expo is premised on the theme, “Building Uganda and Networking Diaspora Initiatives” which ran from June 29 -July 1 2019.

The Speaker assured the audience that plans were on course to facilitate Ugandans living in the diaspora to be able to renew their passports as well as acquire Uganda national identification cards and certificates of dual citizenship.

“We agreed in 2018 that for a start, Government would facilitate six centres around the world which can give services to Ugandans in the diaspora. We have a Middle East office in Abu Dhabi, a UK office in London, a US office in Washington, a SADC office in Pretoria and the Canada office will be in Ottawa,” Kadaga noted.

Key talking points at the convention include among others Uganda’s tourism potential for which the diaspora residents have been called on to invest in owing to the fact that religious tourism is taking root in the country.

“It’s a very big thing that Uganda has the martyrs that is why we have been visited by three Popes. On Martyrs Day, Namugongo had up to five million people. This is an opportunity that Ugandans in the diaspora can tap into and invest in things like hotel facilities,” said the Speaker.

The chairperson of the Uganda Canadian Diaspora Business Expo and Convention, John Nalima, noted that the convention aims at linking Ugandans living in Canadian to sector players who can facilitate investment back home as well as give Ugandans an opportunity to live in Canada.

The three day convention has also been graced by H.E. the Vice President, Edward Kiwanuka Ssekandi, Members of Parliament, the Uganda High Commissioner to Canada, Joy Ruth Acheng and the Uganda Hotel Owners Association chairperson, Susan Muhwezi among others.

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