A number of multibillion agricultural investment projects, flagged off by President Museveni recently in Nakaseke district, represent the latest ray of hope for a sector perennially praised as key to Uganda’s fortunes, but starved of meaningful investments.
On February 18, Museveni commissioned works for the construction of a dairy and beef processing factory at Kaweweta, part of the cattle corridor. Turkish firm ASB Group will invest $300 million (Shs 750bn) in the project, which includes building a modern abattoir, dairy factory, grazing facilities and infrastructure such as roads and an airfield in the area.
According to a State House statement, ASB will also establish agro-processing factories for such crops as cotton, coffee and fruits (pineapples, oranges and mangoes) from out-growers. Two days earlier, the president was in Kasangombe sub-county, still in Nakaseke, to open a maize factory and mushroom house, owned by Chinese investor Qui Lijan of Hanhe Uganda Farm Company.
Lijan says he has invested $2m (approximately Shs 5 billion) in related food processing projects in Nakaseke and the surrounding districts of Luweero and Nakasongola in the last five years. The projects form Special Economic Zones (SECs), a major component of government’s development plan to transform agriculture and the economy in general.
Poverty eradication specialist Augustus Nuwagaba applauds government’s latest efforts to boost commercial agriculture.
“This is a very good step because it has been lacking,” Prof Nuwagaba told The Observer.
Nuwagaba said that Ugandans were still engaged in primary agriculture production, “but we need to take it to the secondary level where value addition is a must. That can only be achieved if such projects are supported.”
He, however, cautioned that such direct foreign investments require good policies to guard against possible exploitation. For instance, a regulation imposing quotas on importation of raw materials and labour are required to ensure local people (Ugandans) benefit from SEZ projects.
Charles Ocici, the executive director of Enterprise Uganda, says that economic zones are supposed to be catalysts for local people to invest in productive commercial ventures.
“Such initiatives require strong household and individual supply support from the locals so that they don’t become white elephants due to lack of what to process,” Ocici explains.
For instance, the ASB Group’s planned abattoir in Kaweweta would need daily supply of up to four hundred cows. Ocici argues that livestock keepers in Nakaseke and neighbouring districts should take advantage of such high demand to increase their profits.
In his remarks during the groundbreaking ceremony, the president said ASB would also buy local meat, milk, cotton, coffee and fruits to supplement what they plan to produce on the 18 square miles of land allocated by government.
By establishing free economic zones, Museveni said, the government was creating a conducive atmosphere for foreign direct investments aimed at stimulating growth in strategic parts of the country.
However, such investments cannot escape land and resettlement disputes. In Kaweweta, for instance, 419 families were displaced as government gave away the land to ASB to set up the special economic zone. The government deemed them illegal squatters, although the president has promised to find a way of compensating them.