I have the honour to address this distinguished audience concerning the great challenge we in Uganda face as we attempt to address rural poverty. In Uganda the rural population is 85% of the total population of 28 million people. Since 1992, we have been able to reduce the percent of the population living below the poverty line from 44% in 1992 to 31% in 2006. We believe that we shall attain the Millennium Development Goal of reducing hunger and poverty by half by 2015. The challenge is enormous and I beg to take this opportunity to share with you some of the efforts and strategies we are implementing to resolve this problem.

Uganda’s Poverty Eradication Plan aims to maximize private sector led economic growth by assuring a conducive macroeconomic environment, as well as consistent improvements in infrastructure. For Uganda the private sector is not only the big companies but also the small holder peasants who must subsist on one or two acres of land. These small holder operators number over 4 million and constitute 75% of all households. Their well being is at the heard of Uganda’s strategy.

Specifically, our rural development strategy is focused on the sub county as the basic planning unit of the country. With 1,000 such units, each averaging about 25,000 people in 5,000 homesteads, each sub county is being assisted to develop various economic institutions. Economic institutions can act as vehicles for better community organizations, as channels of governmental assistance and as channels of information management and communication. Microfinance organizations, for example, increase savings mobilization and make credit available for agricultural inputs and trade. Production and marketing cooperatives provide vital agricultural extension services viable as well as setting standards necessary for accessing markets.

We are also investing in a community information system to enable us to get regular reports of the economic and social conditions in each sub country both in the households as well as the condition of community infrastructures such as schools, roads, health centers and safe water sources. In time we believe that these institutions will become important mechanisms for reducing poverty in the rural areas.

In the struggle to increase household income, we have to beware of the tendency to focus on partial solutions as if they are total solutions. In the past we have at certain times focused on increasing production and productivity to solve the poverty problem. When we managed to increase production we would fail to sell it and we would also face collapse of prices. We would now turn around and say that the problem is marketing.

Similarly, it has been common to see microfinance as the main obstacle to increasing household income. There is a widespread belief that microfinance is the main solution to poverty. Additionally, it is also common to hear the view that the problem of poverty can be solved by value addition or industrialization.

However, the truth seems to be that it is all of these links which constitute the solution rather than any one of them. We need to solve the problem of the farmer’s access to credit so that he/she can access inputs; the farmer needs extension services so that he/she can apply the inputs properly; similarly, the farmer needs assistance in marketing and marketing may require processing. All these stages are part of the complex problem that needs to be solved in order to assure a sustained income for the farmer.

In Uganda, we believe that it is important to assist the poor to create economic institutions that can assist them solve these complex problems of poverty. Institutions that are formed by the people themselves with the help of Government in training and supervision may offer the people and the Government an important solution to poverty eradication. There is obviously a lot to learn. We can start by defining the problem properly rather than hurrying to solve something we have not fully defined.

Let me conclude my remarks by thanking IFAD for the consistent support it has given Uganda over many years. It is because of organizations like IFAD that Uganda has made decisive progress in reducing the incidence of poverty in Uganda. We look forward to continued collaboration in this vital endeavour.

Thank you very much. 

Hon Dr. Ezra Suruma, Minister of Finance, Planning and Economic Development.