Promoting agribusiness in Uganda

Both projects largely failed, the former because agribusinesses receiving loans were not viable, the latter due to politicization, mismanagement, and lack of a sufficient economic base for cooperatives. USAID had better results at the macroeconomic level: its Agricultural Nontraditional Export Production program, which also began in 1988, helped to bring about a shift by the Ugandan government toward a more liberal trade environment (as well as boosting nontraditional agricultural exports). Three factors have prevented USAID"s agribusiness program from having a greater impact to date: design flaws; lack of an articulated strategy; and the macroeconomic setting within which the program was implemented. In 1990, USAID shifted its focus from institution building and promoting policy change to direct commodity-specific assistance to individual agribusinesses; however, this new strategy has not been in place long enough to measure its success. There are three main constraints to future growth: lack of infrastructure, lack of supporting services (credit and technology) and lack of firm government commitment to export-led economic growth (the reforms of 1989 came about chiefly at the urging of donors).