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EAC States bank on agriculture to expand exports, grow economies

Business
Uganda’s Minister for Finance Mattia Kasaija. [File, Standard]

Agriculture has taken precedence in East African Community (EAC) countries’ 2024-25 budgets with the nations seeking to maximise on the fairly good weather and previous expansion of the sectors.

Modernising the sector through manufacturing and value addition besides allocations to facilitate access to affordable fertiliser are some of the areas of priority in the sector.

Uganda, which exports a lot of agricultural products among them milk and eggs to Kenya, in the financial year 2024-25, allocated Sh64.4 billion (Ush1.878 trillion) to deepen agro-industrialisation with an increased focus on commercialisation and value addition.

Uganda’s budget stands at Sh2.4 trillion (Ush72.1 trillion). Uganda’s Minister for Finance Matia Kasaija, revealed in his budget speech that agricultural performance is estimated to have expanded in 2023-24 at 5.1 per cent compared to 4.5 per cent in the previous financial year.

“This is attributed to streamlined implementation of the Parish Development Model (PDM); and fairly good weather conditions,” said Mr Kasaija. The Minister noted that the share of credit to agriculture increased to 11.3 per cent by April 2024 compared to 11.1 per cent by April 2023.

Agriculture was also key in Kenya’s 5.6 per cent growth in 2023 an improvement from 4.9 per cent the previous year. Due to improved weather conditions substituted by the Government’s fertiliser subsidy program, the sector improved from negative growth in 2022 of -2.3 per cent to 7.0 per cent in 2023. In response, National Treasury Cabinet Secretary Prof Njuguna Ndung’u announced a Sh10 billion allocation for the fertiliser subsidy programme with the sector getting sh54 billion in total in the coming financial year.

Like Kenya, Rwanda also plans to make fertiliser and seeds available to farmers at affordable prices in the 2024-25 budget.

Dr Uzziel Ndagijimana, Rwanda’s Minister of Finance, highlighted agriculture as a key sector in the country’s economic pillar. He projected the economy to grow at 6.6 and 6.5 per cent in 2024 and 2025.

“The domestic front, our economy’s performance could be affected by bad weather conditions affecting agriculture production and disasters. On the external side, our economy could be affected by the pandemic and global conflicts,” he said detailing the headwinds the economy anticipates. The economic pillar where agriculture falls has been allocated Sh332.5 billion (FRW 3,393.6 billion).

The sector is projected to grow at five per cent in 2024 down from 1.7 per cent in 2023.

Some of the interventions outlined to effect this growth include: availing affordable inputs (seeds and fertilisers) on time, increasing crop climate resilience, scaling up animal and crop insurance, and facilitating access to agriculture credit.

Rwanda’s budget for the 2024/25 financial year stands at sh557.4 billion (FRW 5,690.1 billion).

Tanzania Minister for Finance Dr Mwigulu Lameck noted in his budget speech that due to the fiscal measures put in place, there has been a slight growth in the number of loans issued in the private sector to 17 per cent in the first quarter of 2024.

“A large number of these loans were issued in the agricultural sector, mining, and logistics,” he said.

He said Tanzania Agricultural Development Bank plans to grow its revenue to Sh2.8 billion (Tsh56.54 billion) targeting a profit before tax of Sh1.02 billion (Tsh20.83 billion) in 2024 compared to Sh923.8 million (Tsh18.79 billion) in 2023.

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