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U-Growth II

The agricultural sector is still dominant in Uganda, especially in terms of employment, and is therefore a high priority area in the government’s National Development Plan and for Danida.

 Growth and agriculture

Agriculture is central to Uganda’s economic growth and poverty reduction strategy. Accounting for 22.2 percent of GDP, and 60 percent exports, agriculture directly provides employment to 65.6 per cent of the total labour force, of which about 75 per cent are women and 70 per cent are youth, most of whom reside in the rural areas. It has significant forward and backward linkages with both the services and industry sectors. It is a major source of raw materials for the manufacturing sector, a market for non-agricultural output and a source of surplus for investment.

Agricultural production in Uganda is mainly dominated by smallholder farmers engaged in food and cash crops, horticulture, fishing and livestock farming. Formal, large agribusiness enterprises are quite scarce. Moreover, as seen in Table 3, agriculture productivity of most crops has recorded little growth over the last decade mainly due to a number of factors including: high costs of inputs which are often of poor quality, poor production techniques, limited extension services, over dependency on rain fed agriculture, limited consistent markets, land tenure challenges and limited application of technology and innovation.

U-Growth II

It is a strategic objective of the Danish-Ugandan partnership to support sustainable and inclusive economic development. To this end, private sector development focusing on the agricultural sector is an integrated part of the Danish support via the Uganda Growth Programme (U-Growth). The current phase of U-Growth (U-Growth II 2014-2018) has a budget of DKK 500 million and the stated objective “to reduce poverty through increased productivity, inclusive growth and employment”.

U-Growth II consists of thee mutually reinforcing engagements: first is the Agricultural Business Initiative (aBi), the objective of which is to “increase income and employment through environmentally and socially responsible improvements in productivity, quality and value addition”. The focus is on value chain development and access to finance, the latter through a capital investment fund where the development impact of the Danida funding is being leveraged by 6:1. aBi’s activities have reached out to more than 400.000 poor smallholder farmers and has helped extend around 240.000 loans to farmers and agri-business SMEs. Second is the Uganda window of TradeMark East Africa (TMEA-U), the objective of which is to “increase private sector-led and export-driven economic growth”. The engagement is focusing on bringing down the time and cost of Ugandan imports and exports thereby enabling the environment for the private sector. Third is the Recovery and Development in Northern Uganda Component (RDNUC), the objective of which is to “increase the resilience and equitable participation of Northern Uganda in the economic development of the country”. The engagement is focusing on increased production and marketing of small-scale farmers, agriculture-related rural infrastructure, and capacity development of District Local Governments.

Read more about the three engagements under U-Growth II in the menu on the left.

Download - Results and lessons learned from the former ASPS programme


For more information about Agricultural Sector Support, please contact:
Senior Programme Advisor
Victor Azza. Vuzzi