• Reference: P-UG-AB0-001
• Approval date: 31/01/2007
• Start date: 21/09/2007
• Appraisal Date: 30/09/2006
• Status: OngoingOnGo
• Implementing Agency: MINISTRY OF LOCAL GOVERNMENT MOLG
• Location: COUNTRYWIDE

The tentative project Components will include the following:

1.Community Mobilisation and Sensitization: For participation in infrastructure planning, implementation and their maintenance, including contributing to cost of investment and maintenance.

2. Improvement in Community Infrastructure, including district roads (120 km) community access roads (2750 km), rural electrification through demonstration and use of solar energy, market and agro-processing development through improvement in community market structures, storage and agro-processing facilities; water for production through construction of earth dams and valey tanks; and support to NEMA on environmental issues.

3. Coordination and Management: This will provide support for coordination of implementation, including adaptation of existing designs and supervision of construction. The project will also provide for community capacity building for planning and management of maintenance of the infrastructure that will be created.

The project development objective is to improve agricultural productivity, food security and incomes of rural households through improvement and access to community infrastructures - rural access roads, rural markets, rural electrification, rural water supplies and rural livestock infrastructures with participation of the beneficiaries.

Poor infrastructure raises production prices. Poor energy availability causes black outs and power rationing and, poor roads and transport infrastructure inhibit intra country trade and also increase production costs. Limited and expensive communication infrastructure makes it difficult for the country to keep with technology in this information age. Limited access to potable water increases Uganda's health costs and limits the country's workforce productivity. Rural infrastructure development is justified mainly on account of reducing transaction costs, and increasing access by producers to input and output markets. Good infrastructure makes it easier to deliver services e.g. NAADS to beneficiaries. Good infrastructure creates the sustainable environment for production to take place. Uganda's strategy for sustainable maintenance of district (2004), urban and community roads reports that as of end 2001, only 38% and 46% of district and community access roads respectively were in fair state. Even the fair roads require routine maintenance. Furthermore, there is need to cover areas that have not been covered. Therefore, financing gaps in rural infrastructure particularly roads is enormous. In support of agro processing development and growth, the rural electrification programme could be expanded to cover the entire country. This would call for adequate power supply. The Government's Non-Sectoral Conditional Grant (NCSG) has played an important role in rural development in the country. However, the funds are meagre and cannot address the challenge of infrastructure development and maintenance that calls for much financial resources.

One of the most critical needs with regard to rural poverty reduction through agriculture development in Uganda is provision of infrastructure for access to markets (input and output markets) and agro processing. Complementary infrastructure that is supportive of improving access to external markets is also important. The PMA Secretariat therefore recommends strongly that the ADB support to Uganda in the short to medium term should focus on infrastructure development and maintenance for producer access to input and output markets and agro processing.

The proposed programme which could be implemented in phases is in line with the Bank's key policy documents such as

(i) Vision Statement, which regards agriculture, given its importance to African economies, as the starting point for supporting overall production growth and improving living standards in the regional member countries.

(ii) Revised Poverty Reduction policy (2004), which aims to support the RMCs in their efforts towards poverty reduction and considers that agriculture and rural development will continue to be the engine of pro-poor growth in Africa; and

(iii) Agricultural and Rural Development Sector Bank Group Policy (2000), which seeks to promote sustainable use of natural resources, strengthen rural institutions, support improvements in agricultural productivity and create an economic environment conducive for the commercialisation of agriculture, enhanced food security and increased poverty reduction. It is also in line with Uganda's main PMA pillars, especially Pillar 5 (Marketing and Agro-processing) and Pillar 7 (Physical Infrastructure). It is also supported by the Uganda Joint Assistance Strategy (UJAZ, 2005), especially Pillar 2 (Enhancing production, competitiveness and incomes) with special emphasis on Improving Infrastructure for growth (help create infrastructure that reduces the cost of doing business, links isolated areas of the country to the broader economy, and promotes regional integration).

The project will be participatory in design and implementation with significant beneficiary input intended to ensure sustainability. It will contribute to raising productivity and growth in the agriculture sector, and significantly increase the food security and incomes of rural households through provision of needed infrastructures which will be demand driven and will serve a wider section of the communities. It is anticipated that the project is financially attractive, which will provide an incentive for community members and farmers groups to participate actively and contribute in the realization of project objectives and sustainability of the benefits.Benefits from improved roads will lower user costs, increase farm gate prices and raise incomes. Other social and community infrastructures will contribute to sicial cohesion, maintenance of community infrastructures and their sustainability.

NUWAGIRA Asaph - OSAN1

Finance source	Amount
ADF	UAC 30,000,000
Government	UAC 4,193,200
Delta	UAC 6,800
Total	UAC 34,200,000