Over the last two decades, Uganda has had an impressive economic growth contributing to rapid poverty reduction. However, recent trends indicate a slowdown in economic growth and two thirds of people that lift themselves out of poverty risk falling back. Natural resources such as forests and fish – which Ugandans living in poverty are particularly dependent on for their long-term survival – are being depleted at a fast pace. Climate change contributes to drought and changing rain periods, posing particular challenges for agriculture.
The economic growth has been a jobless growth and has depended largely on unsustainable exploitation of natural capital like land, forests, fisheries, water. At the same time, the country remains vulnerable to increasing impacts of climate change such as erratic rainfall and drought patterns that affect different aspects of the economy.
The agriculture sector in Uganda remains largely subsistence and faces a number of challenges from, low investment, low production and productivity, lack of quality inputs, poor post-harvest handling and lack of markets resulting in in low economic growth, food insecurity and underemployment.
The Swedish support aims at increased opportunities for poor people to contribute to and benefit from economic growth. This is expected to be achieved through:
Swedish support integrates competitiveness, productive employment for youth and women, and access to and control of productive resources with focus on women. It has so far contributed to interventions targeting the rural agricultural sector, the energy sector and digitalization.
Sweden has, through a multi donor agriculture fund (aBi) focusing on selected value chains contributed to the creation of 2,200 jobs in the agriculture particularly in the coffee sector, a sector that shown capacity to strengthen economic empowerment of women, resilience (where exports increased even during Covid-19) and with 35% of the investments in the fund with a strong focus on green growth.
With Uganda having one of the lowest electrification rates in the world, bringing electricity to more than 40 million Ugandans is a critical national and regional objective. Although power is available in Uganda, many communities, homes, and businesses do not have access to electricity due to expensive grid connection fees, including high house wiring costs. Through Beyond the Grid fund Africa, Sweden strengthens the focus on access to energy to create jobs, enhance productivity and strengthen competitiveness.
Since 2019, Sweden has collaborated with UNCDF on digitization in health, education, and agriculture. This has resulted in approximately 700,000 people improving digital skills and the use of mobile payment methods, e-recruitment, e-warehouse management and banking services. Furthermore, poor and vulnerable people have gained access to market information that was previously difficult to access. In the education sector, 127 schools now accept digital payments. Financing solutions, such as partial payments have been developed and hence enable schooling for poor children. In the agricultural sector, more than 320,000 farmers, traders and other customers have registered for mobile payments. In addition, digital solutions for medical inventory management have been developed and deployed at several healthcare facilities, which improves access to medicines.
Since 2018, Sweden has supported a number of interventions aimed at enhanced capacity of ecosystems to support communities against climate shocks. Through the FAO, Sweden enhancing capacities of local governments and local institution, community groups, CBOs, and private sector to implement gender sensitive climate adaptation interventions in Karamoja and West Nile region. These include water harvesting, early maturing crops, selection and development of appropriate value chains, watershed management and sustainable energy. Sweden has further supported investment in protection and enhancement of Uganda’s forestry, wildlife and tourism resources. Through the World Bank multi-donor trust fund, Sweden is supporting improved management of forests and protected areas in the Albertine Rift region, an area with rich in biodiversity, prestine forests and related ecosystems that contribute over 70% to Uganda’s tourism revenue, support multiple sectors of the economy and livelihoods.