Uganda-US$ 55.8 Million Loan for Markets and Trade Improvement Project
Tunis, 25 March 2009 - Uganda has secured a concessionary loan of 38 million Units of Account (UA*), equivalent to US$55.8 million, to finance a Markets and Agricultural Trade Improvement Project (MATP-1).
Approved on Wednesday in Tunis by the Board of Directors of the African Development Fund, the soft loan window of the African Development Bank (AfDB) Group, the funding will be used to improve marketplace economic and social infrastructure for about 900,000 households in 19 districts in the country.
The project is designed to leverage poverty reduction efforts and economic growth through enhanced commercialization of agricultural produce and other merchandise in the country.
It will, among other activities, involve the construction of 21 markets in Municipal/Town Councils (including Kampala city) located in 19 districts of all four regions of Uganda: Jinja, Entebbe, Masaka, Mbarara, Kabale, Fort Portal, Arua, Lira, Gulu, Moroto, Soroti, Mbale, Tororo, and Kampala. The five Town Councils are Hoima, Kasese, Busia, Kitgum and Lugazi. Apart from market infrastructure, the project includes Market Management and Agricultural Trade Enhancement, including Capacity Building, as well as Project Management and Coordination,
The MATIP-1 is consistent with the country’s Poverty Eradication Action Plan (PEAP – 2005/2008 extended to 2009) which focuses on “Enhancing production, competitiveness and incomes”. It is also in line with the Plan for the Modernization of Agriculture (PMA - 2000), provision of agricultural extension and effective market management services and building of physical infrastructure. The project is well aligned with the Uganda Joint Assistance Strategy (UJAS), the harmonized business plan of Development Partners in Uganda, which is focused on implementing the PEAP, and its derivative; the UJAS 2005 – 2009 Cover Note, which is the Bank Group’s Business Plan in Uganda for the period. The private sector and growth are among the priority areas for UJAS, which is also consistent with MATIP-I objective.
The project is in line with the Memorandum of Understanding between the Bank and other development partners in Uganda to fund capital intensive hardware infrastructure-related development initiatives, with other donor agencies undertaking the software services. It also fits well with the Bank’s Medium Term Strategy and the Africa Food Crisis Response (AFCR) initiative, which is geared towards increased food production, reduction of post-harvest losses and increased productivity in the short, medium and long terms.
The AfDB is currently Uganda’s leading development partner, providing about 19.9% of the entire development assistance, particularly in the agriculture and transport sectors, representing 27% and 17%, respectively. The Bank collaborates closely with other development partners, especially the International Fund for Agricultural Development (IFAD) and the European Union (EU) in agriculture-related projects, within the framework of the Agriculture and Rural Development Donor Coordination Group. The Group has been greatly invigorated through the Bank’s field presence.
The project is estimated at UA 42.22 million. The costs will be covered by the ADF loan and UA 4.22 million from the Ugandan government.
* 1 UA = 1.46736 US$ as at 25/03/2009