Mr Chairman
The IFAD President,
Distinguished Governors and Delegates,
Ladies and Gentlemen.

I bring with pleasure, the greetings of the President and people of Uganda to you all Governors and members of IFAD. Uganda is always pleased to actively participate in the Governing Council and specifically to evaluate past performance and pave way for IFAD's more efficient service delivery. My delegation salutes IFAD for the excellent arrangements for this 33rd Session.

Mr Chairman, the world has in the recent past faced unprecedented dramatic increases in the number of the poor and hungry over one billion people in 2009. This is a complete defiance of the Millennium Development Goals (MDGs) and a clear signal that the world must double its efforts to overcome the problem. Many but unsatisfactory reasons have been advanced for these unfortunate changes including climate change and increased prices of fuel and food. Some studies on the other hand by FAO, IFAD, IFPRI and other agencies have demonstrate that underinvestment in agriculture is greatly responsible for the rampant poverty and food insecurity in the developing countries. Figures show a progressing decline in Foreign Direct Investment (FDI), Official Development Assistance (ODA) and national investment in agriculture since the 1980s. The World Food Summit held in FAO in November clearly attests to this state of affairs. Unless such concerns are adequately addressed with utmost urgency, poverty and hunger will continue devastating humanity, especially in Sub-Sahara Africa, where three quarters of the population still live in rural areas as smallholder farmers, fishers, herders and gatherers that suffer the ills of poverty and food insecurity most.

Mr Chairman, Uganda has enjoyed excellent cooperation with IFAD for almost three decades. Since 1981 when the cooperation was established, IFAD has supported 12 projects in Uganda totalling US$ 226.0 million as the IFAD loan component and grants amounting to US$ 3.4 million. The masterpiece of all is the Vegetable Oil Development Project which is supporting development and production of palm oil in Bugala Islands of Lake Victoria. The project is unique in that it integrates production with processing and marketing through fostering close partnership between farmers, the private sector and the public sector. The project has already starting yielding positive economic and social transformations on the islands, and is expected to stimulate unprecedented multiplier effects for many years to come when it reaches its full capacity. Given its importance to our economy, we have completed negotiations with IFAD to support extension of the project into a second phase. This will ensure progressive employment for many more Uguandans when the project expands and production advances. It is indeed a project that the country is proud of, and which if possible should be replicated to the other developing countries with potential and where poverty is still a big challenge.

Mr Chairman, the global paradigm shift from agricultural credit to microcredit has been glorified by many as the best way to reach the rural poor with the badly needed financial services. This however is not the reality as demonstrated by a wide absence of affordable capital for agricultural mechanisation and agribusiness in developing countries that has posed a serious challenge in the entire agriculture value chain. Microfinance institutions in developing countries are exclusively urban-based, urban-biased and mainly target trade and commerce and not rural agriculture. This leaves the majority of the rural poor populations devoid of a source of finance for their activities.

Faced with the dilemma of microfinance shortage in rural areas, Uganda has embarked on supporting value chain development and agro processing through savings and credit cooperative organisations (SACCOs) and the Prosperity for All Programme. IFAD's support will continue to be required to help the country deepen and broaden the financial services to avail credit and improve people’s saving and investment culture.

Mr Chairman, Uganda salutes Mr Nwanze Kanayo for his leadership and excellent performance during his first year in office as IFAD President. We have all the trust in him and pledge Uganda's continued support in his work.

In conclusion, Uganda welcomes the new reforms for being undertaken at IFAD headquarters including but not limited to direct supervision by IFAD. However, as we move towards this, my Government asks you, Mr President, to ensure that better country strategies and opportunities papers (COSOPs) are prepared, better project designs are adopted, which are focused, targeting on integration of projects for better chances of attaining objectives and ensuring that, supervision is carried out which ensures knowledge management and sharing of experiences and should be inclusive of multi disciplinary personnel in order to guarantee continuity and follow up. And, where possible, enhance the capacity of your presence in the country in order to provide more help to the projects and making the programmes open to scrutiny.

Thank you Mr Chairman.

17 February 2010