Government boosts edible oil production investment after 68% decrease in export earnings

This is part of the strategies the government is exploring to revitalise its dwindling export earnings from edible fats and oils, which fell from Shs1.05 trillion ($281.1 million) in the same period last year to Shs338.2 billion ($90.5 million) in July 2023.

Uganda has been grappling with the production of this highly sought-after product, with a surge in global demand last year exacerbated by a conflict in Ukraine, one of the world's leading vegetable oil producers. This conflict disrupted supply chains and inflated prices in its local market.

Uganda currently satisfies less than 40 per cent of the demand and is striving to enhance its output by rejuvenating oilseed projects in various districts, incorporating value addition and upgrading transportation links to market centres.

Ministry of Local Government has already embarked on the development of engineering designs for road construction and is collecting data through monitoring and evaluation processes from local communities to gain insights into market access challenges.

Challenges ahead

With an investment of Shs240 billion ($64.3 million), this initiative encompasses 81 districts and aims to upgrade approximately 2,500 kilometres of community access roads across six hubs: West-Nile, Gulu, Lira, Eastern, Mid-Western, and Karamoja. It also intends to impart engineering design expertise to local government staff, equipping them to oversee forthcoming road projects in their respective local governments.

Dr Samuel Mugasi, the Executive Director of the National Agricultural Advisory Services (NAADs), expressed concerns to the Daily Monitor in March 2023, highlighting the shortage of oilseeds in the country and the difficulties in importing edible oil due to high domestic demand.

Uganda produces 80,000 metric tons of vegetable oil annually, while official data indicates a requirement of 410,000 metric tons of vegetable oil to meet domestic demand.

Despite Uganda's trade agreements with the European Union (EU), the United States under the African Growth and Opportunity Act (Agoa), and China, which feature favourable terms like low tariffs and quotas for premium oilseed exports, local oilseed farmers continue to grapple with issues such as poor seed quality, low yields, and reduced oil content.

Analysts point out that smallholder farmers are the hardest hit due to limited resources. Hybrid seeds that offer higher yields come with increased costs and often need to be imported from countries like South Africa or Kenya.

Five-year investment plan

The National Oilseeds Project (NOSP), one of the government's initiatives, supports oilseed farmers by promoting value addition and infrastructure development, including the construction of Community Access Roads.

Under the plan extending until July 11, 2028, the Ministry of Agriculture and Fisheries and the Ministry of Local Government are collaborating on a Shs597.34 billion ($159.93 million) investment to bolster the oilseeds value chain.

Examples of oilseeds include sunflowers, soybeans, simsim, and groundnuts.

The project focuses on augmenting the production and productivity of oilseeds and their by-products, particularly oil cake, through efficient input utilisation, mechanisation, and private sector-led expansion.

It also aims to empower smallholders, enabling them to compete effectively in the sector, while enhancing access to credit within the industry.

The project, under the stewardship of Christopher Gumisiriza, pledges to support farmers by providing them with improved seeds and technologies that can elevate the value of oilseed and vegetable oil production.

Yassin Ssendawula, the Project Coordinator from the Ministry of Local Government, said, “NOSP will also engage in research and development support to create new and improved oilseed varieties in collaboration with the National Agricultural Research Organisation and Makerere University.”