Press release number: IFAD 07/02

Rome, 15 February 2002 – A USD 16.1 million project in the Republic of Uganda, the ‘Area-Based Agricultural Modernization Programme’ will receive a USD 13.2 million loan from the International Fund for Agricultural Development (IFAD). A loan agreement was signed today at the Fund, by His Excellency, Vincent Kirabokyamaria and Mr. Lennart Båge, President of IFAD.

The programme is targeted to cover ten districts in southwest Uganda; the intended beneficiaries of the programme include rural dwellers that make up 90% of the area’s 5.3 million inhabitants. There are two major target groups: economically active smallholders living in the rural areas who wish to participate in commercial agriculture; and existing or potential small-scale entrepreneurs and business associations who provide services to rural households. Among the target group, women play a major role in crop and livestock production, processing and small enterprise operations. Although the programme area has a high agricultural potential, varying factors limit the involvement of smallholders in farming operations as a commercially viable business.

The overall goal of the programme is to increase incomes and food security among poor rural households with the objective of modernizing agriculture in the ten districts. The expected outputs will be to sensitize and organize communities and beneficiaries into informed groups with socio-economic interests, well aware of development opportunities; to facilitate access to improved/new technologies and techniques as well as to financial services for savings and credit facilities; and provide linkage to the private sector, other service providers and exposure to related business and commercial experiences. Furthermore, the construction of community roads for access to markets and water points will be done.

Beneficiaries will participate in the programme in different ways. Existing groups and associations will constitute the organizational base of the programme interventions. Through training, skills development and other capacity-building activities, subcounty and community leaders, working jointly with the members, will initiate and demand activities on a cost-sharing basis. In addition, communities will have direct responsibility for the activities initiated by them.

To date, IFAD has financed 11 projects in Uganda for a total commitment of USD 132.77 million in loans and BEF 893 million in grants, mostly under the IFAD/BSF Joint Programme. The African Development Bank will be a co-financier in this project with USD 13.7 million, which will finance the rehabilitation of rural feeder roads linked to programme investments.

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IFAD is a specialised agency of the United Nations with the specific mandate of combating hunger and poverty in the most disadvantaged regions of the world. Since 1978 IFAD has financed 603 projects in 115 recipient countries and in the West Bank and Gaza for a total commitment of approximately USD 7.3 billion in loans and grants. Through these projects, about 250 million rural people have had a chance to move out of poverty. IFAD makes the greater part of its resources available available to low-income countries on very favorable terms, with up to 40 years for repayment and including a grace period of up to ten years and a service charge of 0.75% per year.