Economic Policy Research Centre (EPRC)

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    Socioeconomic Determinants of Primary School Dropout: The Logistic Model Analysis
    (Economic Policy Research Centre (EPRC), 2008-02) Okumu, Ibrahim Mike ; Nakajjo, Alex ; Isoke, Doreen
    This paper describes the socioeconomic determinants of primary school dropout in Uganda with the aid of a logistic model analysis using the 2004 National Service Delivery Survey data. The Objectives were to establish the; household socioeconomic factors that influence dropout of pupils given free education and any possible policy alternatives to curb dropout of pupils. Various logistic regressions of primary school dropout were estimated and these took the following dimensions; rural-urban, gender, and age-cohort. After model estimation, marginal effects for each of the models were obtained. The analysis of the various coefficients was done across all models. The results showed the insignificance of distance to school, gender of pupil, gender of household head and total average amount of school dues paid by students in influencing dropout of pupils thus showing the profound impact Universal Primary Education has had on both access to primary education and pupil dropout. Also the results vindicated the importance of parental education, household size and proportion of economically active household members in influencing the chances of pupil dropout. The study finally calls for government to; keep a keen eye on non-school fees payments by parents to schools as these have the potential to increase to unsustainable levels by most households especially in rural areas; roll-out adult education across the entire country; and expand free universal education to secondary and vocational levels as it would allow some of those who cannot afford secondary education to continue with schooling. This has the effect of reducing the number of unproductive members in the household.
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    Impacts and determinants of panel survey attrition: the case of Northern Uganda survey 2004-2008
    (Economic Policy Research Centre, 2010-04) Kasirye, Ibrahim ; Ssewanyana, Sarah
    The paper analyses the impact of household attrition in the Northern Uganda Survey panel of 2004 and 2008. These surveys were designed to evaluate the performance of the first phase of the Northern Uganda Social Action Fund (NUSAF). The first survey was conducted in 2004 when the region faced heightened levels or rebel insurgency and the subsequent survey in 2008 when rebel hostilities had ceased. As such, the panel survey was plagued by a high level of attrition—at least 25 percent of the households could not be resurveyed in 2008. The paper examines the impacts of attrition on determinants of household welfare as well as household experience of insecurity shocks. The pattern of attrition is not random with households in urban areas and those that were resident in internally displaced person camps (IDPs) were more likely to be lost during the follow-up survey. Furthermore, residence in West Nile and Acholi sub-regions were key determinants of household attrition. Within these sub-regions, households with younger heads were more likely to be lost in Acholi while households with teenage children are more likely to be lost in West Nile. Finally, the attrition tests confirm that the regression coefficients differ significantly between households resurveyed and lost during the resurvey.
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    Fiscal policy consistency and its implications for macroeconomic aggregates: the case of Uganda
    (Economic Policy Research Centre, 2010-06) Eria, Hisali
    The relationship between growth in monetary aggregates and price changes continues to be a subject of considerable debate both in the academic and policy circles. Whereas the more ‘conservative’ policy makers hold that growth in monetary aggregates bear proportionately on prices, ‘liberals’ on the other hand suggest a fairly weak relationship and instead mainly attribute sustained price changes to other innovations (including structural weaknesses and poor productive capacity). This study employed vector autoregression techniques (and its variants) to examine both short term as well as long term interactions between selected macroeconomic aggregates with particular focus on the relationship between money growth and price changes. Results from both the reduced form vector autoregression specification and the contemporaneous structural vector autoregression show a weak causation from growth in monetary aggregates to price changes, but the link between changes in monetary aggregates and prices becomes stronger in the long run. The results also point to a strong relationship between price changes on the one hand and exchange rate depreciation, and past inflation outcomes on the other. The results imply a potential for increased revenue from monetisation, at least up to some feasible as well as the need to focus on other possible sources of price variations. In general, whereas it is possible for the relationship between prices and money to weaken, budget deficits beyond ‘certain financeable limits’ will clearly negate the possibility of attaining other objectives of macroeconomic policy. A natural concern that arises in such a context is one of sustainability and compatibility of the budget deficit with other macroeconomic targets. We also employed the government budget accounting framework to analyse sustainability of Uganda’s current fiscal stance. The results show that the consolidated deficit is consistent with attainment of target outcomes for other macroeconomic variables, most notably the rates of inflation and GDP growth rates. The inflation target has however, been achieved at the cost of an unsustainable domestic debt. From a policy perspective, issuing domestic debt at such a high real interest rates will allow lower money growth but at the cost of future increases in debt service obligations and thus future budget deterioration.
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    Inflation differentials among Ugandan households: 1997 - 2007
    (Economic Policy Research Centre, 2010-06) Okidi, John ; Vincent, Nsubuga
    Since the structural adjustment days of the 1990s, targeting inflation to single digit rates has remained a predominant feature of Uganda’s macroeconomic strategy towards creating and sustaining an enabling environment for poverty-reducing growth. One of the most commonly advanced arguments for this inflation targeting strategy is the minimization of the erosion of the purchasing power of the poor. Implicit in this argument is the concern that inflation hurts the poor the most. However, since different consumers purchase different bundles of goods and services depending on personal and location-specific socioeconomic characteristics, when inflation rises beyond the targeted range, it is not obvious which income group experiences a relatively higher rate of inflation. Even when group-specific inflation rates are known, the sub-population with a higher relative rate of inflation may not necessary be the one that bears the brunt of a surge in inflation.
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    Sectoral and welfare effects of the global economic crisis on Uganda: a recursive dynamic CGE analysis
    (Economic Policy Research Centre, 2010-07) Twimukye, Evarist ; Sebastian, Levine ; Birungi, Patrick ; Matovu, John Mary
    This paper analyses the impact of the global economic and financial crisis on Uganda notably on macro-economic aggregates, sectoral output and household welfare, and the potential role of fiscal policy and reform in mitigating the impacts. We find that second round effects from a reduction in financial inflows such as remittances, foreign direct investments and overseas development assistance, as well as reduction in international demand from cash crops such as cotton, tea and coffee, could lead to a reduction in economic growth by 0.6 percentage points on average annually over the period 2008-2010 compared to a baseline reflecting pre-crisis conditions. A surge in regional exports and early counter-cyclical policies in particular are found to dampen the most adverse impacts of the crisis. The paper also shows that the impact of the government’s expansionary 2009/2010 budget could return growth to pre-crisis levels and illustrates how a re-prioritization of government expenditure away from expenditure on administration to more productive sectors of the economy, combined with reforms to improve the efficiency of public spending, could lift long-term growth and reduce poverty, especially in rural areas, even more.
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    Food insecurity in Uganda: a dilemma to achieving the hunger Millennium Development Goal
    (Economic Policy Research Centre, 2010-07) Ssewanyana, Sarah ; Kasirye, Ibrahim
    The status of food security in Uganda is worrying. The share of Ugandans suffering from food insecurity measured in terms of caloric intake is alarmingly high with low rates of income poverty. Based on the 2005/06 Uganda National Household Survey data, the study provides insights into access to food at household level. More importantly, the study shows that average caloric intake stood at 1,970 calories per person per day, which is below the minimum caloric requirement of 2,200 calories. As such, a population of 17.5 million Ugandans in 3.1 million households were unable to meet the minimum caloric requirement in 2006. This raises questions on whether Uganda will be able to achieve the Millennium Development Goal (MDG) 1: halving extreme poverty and hunger by 2015. While Uganda is on track to halve extreme poverty, it is less likely to halve extreme hunger by 2015. Yet the results suggest that food insecurity and income poverty are closely linked. Similarly, food insecurity at household level is closely linked to child nutrition status. In other words, antipoverty interventions and interventions to address food insecurity and child nutrition status have to be closely linked. The results further suggest that income growth, land under cultivation, changes in food prices and education attainment of household head significantly impact on caloric intake. There are significant seasonal fluctuations in dietary intakes – calories and protein. Improving post-harvest storage technologies and preservation methods; creating remunerative employment especially for the urban population; and strengthening the food distribution mechanisms would go a long way in addressing these seasonal fluctuations. Food insecurity is also marked with significant spatial variations that need to be taken into account in designing anti‐food insecurity interventions. The famine that hit some districts during 2009 demonstrates that adverse effects on the agricultural sector directly increase vulnerability to food insecurity. At the same time, increasing land under cultivation improves food security at household level. This suggests that improving agricultural productivity is a key to long‐term food security.
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    Does teaching methods and availability of teaching resources influence pupil’s performance?: evidence from four districts in Uganda
    ( 2010-09) Guloba, Madina ; Wokadala, James ; Lawrence, Bategeka
    This paper explores ways of improving education quality in Universal Primary Education (UPE) schools in Uganda. Following the introduction of UPE in Uganda in 1997, primary school enrollment increased tremendously, leading to a strain on existing teaching resources such as classrooms, teachers’ accommodation, toilets, teachers, chalk, and students’ furniture among others. The inadequacy of teaching resources partly attributes to the low quality of education in UPE schools as reflected in the Primary three and six pupils’ performance in literacy and numeracy. Accordingly, Government responded by increasing supply of teaching resources with the hope of improving the quality of education in UPE schools. The major findings of the paper include: i) Supplying more teaching resources in the current Uganda context should not be the number one priority intervention if the quality of education in public primary school is to be improved. Paradoxically, supply of teaching resources is found to have adverse effects on education quality. This suggests that the supply of teaching resources in these schools seem to be done at the expense of effective teaching. ii) Primary school teachers employ teacher-centred methods of teaching, which are less effective. The study finds that child-centred methods of teaching are more effective for both males and females as regards improvement of education quality. Yet, teachers in UPE schools hardly employ child-centred approaches to teaching, which mainly explains the poor quality of education in UPE schools. iii) There is urgent need for the ministry in charge of education to focus more on teacher supervision to compel teachers to attend to their duties and use child centred methods of teaching. This calls for increased budget for school inspection and teacher supervision.
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    Non-tariff barriers in EAC customs union: implications for trade between Uganda and other EAC countries
    (Economic Policy Research Centre, 2010-12) Okumu, Luke ; Nyankori, J. C. Okuk
    A key objective for the adoption of East African Community (EAC) Customs Union was to enhance economic gains through elimination of tariffs and non-tariff barriers (NTBs) within the member states. This study has established that several NTBs continue to exist, and some have persisted. The NTBs that have persisted for more than three years include a long list of customs documentation requirements, cumbersome formalities, and limited testing and certification arrangements. Other NTBs that still exist include: un-standardized weighbridges; several road blocks; lack of recognition of individual country’s standards; and the existence of several un-harmonised standards. The simulation results of spatial equilibrium model of maize trade with and without NTBs show that at the EAC level there are positive production, trade and welfare implications attributable to elimination of NTBs in intra-regional maize trade. The gains are greatest in trade and production in Uganda compared to Kenya and Tanzania. To eliminate the existing NTBs and to reduce the possibility of new ones being created, first and foremost, the EAC countries need to design effective mechanisms for identifying and verifying information about NTBs and ensuring their elimination. This will require giving the EAC Secretariat the mandate to compel individual countries to eliminate any identified NTB and to ensure that no new ones are created. Second, policy and legislative decisions made by, for example, Council of Ministers should be communicated in time for effective implementation. Broadly, the Government of Uganda (GoU) needs to examine the trade barriers identified in this study and remove those that are internally instituted while working with the rest of the member states to remove those externally imposed. In the specific and medium term, standards should be harmonized and enforcement of compliance be transferred to one regional body, such as EAC Bureau of Standards. In the short run, the EAC countries should develop a mutual recognition of standards across member countries. Furthermore, EAC member states and other key stakeholders such as private sector associations need to launch public awareness campaigns to disseminate information about customs union and its economic opportunities. There is also a need for full commitment to the implementation of customs union protocol by all the member states.
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    Economic and institutional efficiency of the National Agricultural Advisory Services’ programme: the case of Iganga District
    (Economic Policy Research Centre, 2011-06) Okoboi, Geofrey ; Muwanika, R. Fred ; Mugisha, Xavier ; Nyende, Magiddu
    This paper examines the technical and institutional efficiency of the National Agricultural Advisory Services (NAADS) programme implementation in Iganga district. The Cost Effective Analysis (CEA) and stochastic frontier analysis methods were used to examine technical efficiency while expenditure tracking and Focus Group Discussion (FGD) methods were applied to assess institutional efficiency. The analysis demonstrates that NAADS interventions have not had a significant impact on the output, productivity and income of the farmers in Iganga district. Moreover, NAADS programme faces implementation weaknesses such as nepotism that affects the selection of beneficiaries as well as enterprises, to the extent that some farmers are apathetic about the success or failure of NAADS Programme. Other observed weaknesses in NAADS implementation include late disbursement of funds, very low counterpart funding by the local government and the farmers, and poor monitoring and evaluation (M&E) of the programme. Based on the results, we suggest a major review of the implementation process of NAADS programme in general and Iganga district NAADS in particular.
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    Righting resources-curse wrongs in Uganda: the case of oil discovery and the management of popular expectations
    (Economic Policy Research Centre, 2011-07) Kiiza, Julius ; Bategeka, Lawrence ; Ssewanyana, Sarah
    Following Uganda’s discovery of oil deposits in 2006, the country’s development prospects look higher than ever before. Different stakeholders (discussed in the paper) have high development expectations. However, development experiences from oil-rich countries in Africa raise concerns that Uganda could suffer oil curse - a situation in which extraction of oil increases poverty and misery to majority of the people instead of leading to improvement in livelihoods for all. The paper discusses management of popular expectations in Uganda that are associated with discovery of oil, with a view to assisting the country to avoid the dreaded oil curse. The oil curse is not because of the oil but due to economic and political mismanagement. Oil abundance typically generates valuable rents that tend to trigger violent forms of rent-seeking or “greed-based” insurgencies. Lack of transparency and accountability in Uganda’s oil sector are early signs of an oil curse. Uganda can avoid the oil curse by managing popular expectations better and by ensuring transparency and accountability in the management of the oil sector.
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    Comparing the performance of Uganda’s intra-East African Community trade and other trading blocs: A gravity model analysis.
    (EPRC, 2013) Shinyekwa, Isaac ; Othieno, Lawrence
    This paper examines factors that determine Uganda’s trade flows and specifically compares the impact and performance of the different trade blocs on Uganda’s trade patterns and flows. The empirical question is whether Uganda’s trade is getting more integrated in the East African Community (EAC) region or is still dominated by other trading blocs, namely European Union (EU), Asia and Common Market for Eastern and Southern Africa (COMESA)? Two analytical approaches are used, namely: trade indicators and estimation of the gravity models using data extracted from COMTRADE for the period 2001 – 2009 (panel). We estimate determinants of export and import trade flows separately using static random, dynamic random and IV GMM models. The results suggest a strong relationship between belonging to a trading bloc and trade flows. Likewise, Uganda’s import and export trade flows have conspicuously adjusted to the gravitational forces of the EAC during the progress of the integration. Whereas exports are being integrated more in the EAC and COMESA regions, imports are more integrated in the Asian and EU trading blocs. Therefore, strong links with trading blocs outside the EAC (i.e. EU and Asia) with regards to imports still exist. The trade indicators demonstrate that Uganda exports largely primary products and imports manufactured products. It is imperative for Uganda to target implementation of regional trade agreements to expand the country’s export markets. The EAC region should attract investment in production of high technology products to increase intra-EAC imports and reduce imports from Asia and the EU.
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    Economic and Social Upgrading in the Mobile Telecommunications Industry: The Case MTN Uganda
    (Economic Policy Research Center, Makerere University, 2013-05) Shinyekwa, Isaac
    Worldwide leaving an indelible mark in history by revolutionising lifestyles of individual, Systems, governments and entities. A number of factors have contributed to this phenomenon. Uganda has not been an exception and in some instances, has pioneered the use of mobile phone attributes to change lives. Following deregulation and liberalization in Uganda in the past two decades, the telecommunications industry has been characterised by a dynamic environment, and unprecedented innovations. This has happened at a time the sector is experiencing new technological developments, creating new opportunities. The growth and expansion of the telecommunications has been characterised by heavy involvement of multinational companies with potential labour issues within these Global Production Networks (GPN). These companies conduct their business along established value chains that fit to form the entire industry, such as production of equipment, software development, marketing of the products and services, and distributors among others. This paper poses a number of questions in this regard: 1. What are the rights and entitlements of workers as social actors in as far as employment is concerned along the value chain? 2. Do the workers have access to better work as a result of economic upgrading in the Mobile Phone Network Operators (MNOs)? 3. Are the work conditions that is, protection and rights in line with International Labour Organization (ILO) decent work framework (employment, standards at work and rights to work, social protection and social dialogue)? 4. With technological advancement, a number of services are now offered by MNOs, such as money transfer, Short Messaging Systems (SMS) for health, business and farming purposes. What benefits have these brought to the users and what are the challenges that come with them? The paper adopted both quantitative and qualitative techniques to collect data from representatives and stakeholders at the different nodes of the value chain. The data collection instruments included semi structured interview schedule, key informants interview schedule, documentation and a checklist. Interviews were conducted with regulators; financial Institutions; policy makers; trade union officials; money transfer stakeholders; employees of MTN Uganda, consumers and users; outlets; the franchisees, street vendors; and the Grameen AppLab project officials). This was complimented by a desk review to gather data from a variety of online resources (websites).
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    Institutional constraints to agriculture development in Uganda.
    (EPRC, 2013-05-11) Kasirye, Ibrahim ; Kiiza, Julius ; Bategeka, Lawrence
    Since the early 1990s, Uganda has implemented a number of reforms in the agricultural sector. However, in the past 10 years, the performance of the sector has lagged behind other sectors particularly services and industry. There are concerns among researchers and policy analysts that institutional constraints in agriculture play a central role in the lacklustre agricultural performance registered during the 2000s. This study examines the institutional constraints affecting agricultural production in Uganda. We recommend reforming the land tenure system as well as the architecture of the Ministry of Agriculture, Animal Industry and Fisheries as means of dealing with the major constraints.
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    Macroeconomic and sectoral effects of the EAC Regional Integration on Uganda: A recursive computable general equilibrium analysis
    ( 2013-05-11) Shinyekwa, Isaac ; Mawejje, Joseph
    The paper empirically examines the implications of the implementation of the EAC regional integration on the Ugandan economy. Specifically, it analyses the likely effects of the asymmetric tariff reduction on the macro variables and quantifies the sectoral growth effects on the industrial, agricultural and services sectors. It adopts the General Equilibrium Model (CGE) for the analysis based on the Uganda 2007 Social Accounting Matrix. The primary policy simulation is the asymmetric reduction of internal tariffs across East African countries under assumptions of unemployment and free movement of factors of production. Other policy simulations that change these assumptions are analysed. Results indicate that the aggregate impact of internal tariff reduction under conditions of unemployment and free movement of factors of production is positive with average GDP growth improving by up to 0.3 percentage points over the period 2008 – 2021. However, the reduction in tariffs has negative implications for tax collections with import duties contracting by 0.3 percentage points, with no significant gains in direct taxes revenues. The rise in exports to the EAC region leads to a decline in the trade deficit by 0.8 percent during the simulation period. There are also significant growth gains for agriculture, industry and services sectors with the former registering growth improvements of 1.2 percentage points and the other two 0.7 percentage points. Therefore, Uganda should optimise gains within the EAC regional integration framework through tariff reduction and free movement of factors of production. Finally, the government should address infrastructural constraints (energy and transport) to foster growth in the manufacturing sector within the EAC region. Key words: Computable General Equilibrium, Social Accounting Matrix, recursive dynamic,
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    Constraints to agricultural technology adoption in Uganda: Evidence from the 2005/06-2009/10 Uganda National Panel Survey.
    (EPRC, 2013-05-22) Ibrahim, Kasirye
    The study examines the determinants of improved agricultural technologies adoption in Uganda, using a nationally representative panel data set of 1,600 farming households, collected by the Ugandan Bureau of Statistics in 2005/6 and 2009/10. Two agricultural technologies— improved seeds and fertilizer—out of the seven types identified by the study were further considered and analyzed. Estimates from the probit regression model show that farmers with low education and land holdings are less likely to adopt improved seeds and fertilizer, while peer effects play a big role in influencing farmers to either use improved seeds or fertilizer. Furthermore, cattle keeping farmers in Western Uganda are more likely to abandon fertilizers and possibly resort to organic manure from livestock excreta. Policy, therefore, should be directed at addressing the supply side constraints of agricultural technologies. Keywords: Agricultural technologies adoption, Improved seeds and fertilizer, Farming households, Uganda
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    Youth Engagement in Agriculture in Uganda: Challenges and Prospects
    ( 2013-06-09) Gemma, Agaibwe ; Musa Lwanga, Mayanja ; Swaibu, Mbowa
    The Ugandan population is to a large extent comprised of a high and increasing cohort of young people, close to 78 percent of the population is below the age of thirty. Evidence reveals that youth engagement in agriculture is declining amidst rising youth unemployment yet the services and industrial sectors despite growing at considerably faster rates have not created enough jobs for the burgeoning youthful labour force. This may have implications on food security, unemployment, and underemployment and may undermine the government efforts to drive economic growth through agriculture. Using data from the Uganda National Panel Survey data of 2005/6 and 2009/10, we examine youth employment dynamics across the different sectors and further provide insights into the determinants of youth participation in agriculture. Using the Uganda Census of Agriculture 2008/09, we further document the challenges and constraints inherent to the youth in agricultural production relative to adults. The findings reveal that youthful farmers are concentrated more in agricultural production. Furthermore, a relatively lower percentage of youth use improved inputs (such as improved seeds, fertilizers, agricultural chemicals and veterinary drugs). With this poor rate of adoption of appropriate inputs, productivity is likely to remain low and constrain the youth to subsistence farming. Furthermore, the youth are disenfranchised in the ownership and management of critical assets in agricultural production, especially land. Land tenure issues continue to impede many youths from engaging in agriculture, with the majority of youth using land without exclusive ownership rights. In addition, the results point to the fact that the youth are less likely to access credit, extension services and social capital (farmer group membership), all key factors in agricultural transformation. The in-depth analysis results seem to suggest that the youth with at least secondary education, males (both married and unmarried) and those youth residing in households with a large share of adults are less likely to engage in agriculture.
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    Improving Girls' access to secondary schooling
    ( 2013-06-11) Mildred, Barungi ; Ibrahim, Kasirye
    Despite the successful implementation of the Universal Secondary Education policy in Uganda in 2007, overall secondary school enrolments have remained low, especially for girls. Among other reasons, high cost of schooling is cited as the major constraint limiting access to secondary education. Uganda’s National Development Plan proposes to attain gender equity in secondary school enrolments through the provision of bursaries/stipends to poor girls to enable them attend school. In this study, we examine the potential impacts of this policy proposal (policy I) and compare it with the alternative of providing free transport on top of the stipends (policy II). The findings indicate that both policy proposals would generate net benefits to society but more benefits would accrue to provision of tuition stipends only. Compared to policy II, policy I is more cost effective and therefore the preferred policy option. Key words: Girls’ secondary school enrolment, policy options
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    HIV/AIDS prevention interventions in Uganda: A policy simulation.
    (EPRC, 2013-06-23) Gemma, Ahaibwe ; Ibrahim, Kasirye
    The HIV/AIDS epidemic continues to be a major health challenge in Uganda. The adult HIV/ AIDS prevalence rate had increased to 7.3 percent by 2011 from 6.4 percent in 2005/6. Consequently, understanding the programmes that can curb down the spread of the disease is both an economic and a public health priority. Previously, HIV/AIDS control programmes in Uganda have relied on the ABC strategy (Abstinence, Being Faithfull and Condon use). However, as the epidemic matured in Uganda, public health authorities have adopted additional programmes to combat the spread of HIV such as male circumcision and counselling as well as testing. This policy simulation estimates the potential costs and impact of rolling out two HIV prevention methods - Safe Male Circumcision and Voluntary Counseling and Testing- on the HIV/AIDS epidemic. Using data from the recent Uganda Aids Indicator Survey 2011 as well as administrative cost data, we estimate the potential costs and impact of expanding the above two methods of HIV/AIDS control. Results from the policy simulation suggest that scalingup safe male circumcision to reach 66% of the uncircumcised males aged 15-49 years would result in averting almost 121,278 new HIV infections through 2020, resulting in an average cost per HIV infection averted of $885 and net cost savings per infection averted of US$ 6,515. On the other hand, scaling up VCT to full coverage (100%) among adults (15-49 years) would result in averting 113,813 new infections through 2020, resulting in an average cost per HIV infection averted of $948 and net savings per infection averted of US$ 6,452.
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    Access and use of credit in Uganda: Unlocking the dilemma of financing small holder farmers.
    (EPRC, 2014-01-12) Munyambonera, Ezra ; Mayanja, Musa Lwanga ; Nampeewo, Dorothy ; Adong, Annet
    The study investigates the extent of access and use of credit by small holder farmers in Uganda. Despite several interventions in agricultural financing by government, access to credit by smallholder farmers has remained very low and stagnating over the years. In understanding the extent of the problem, the study uses information from the various agricultural financing initiatives government has implemented over the years including prosperity for all (PSA) of 2008, the national agricultural advisory services (2001), entandikwa scheme (1996), the recent agricultural credit facility (ACF) and microfinance support centre (MSCL), among others; it uses the Uganda Census of Agriculture dataset collected in 2008/09 to provide some insights on access to credit by agricultural households and examines two successful models of Centenary Rural Financing Scheme and Uganda Cooperative Alliance-Area Cooperative Enterprise (ACE) in promoting access to financial services to the rural poor. On the previous interventions by government in agricultural financing, the study observes that weak institutional framework for co-ordination, financing and implementation could have affected their impact. Insights from UCA (2008/09) data show that access to credit by agricultural households remain very low at 11.3 percent. This could be blamed on the policy failures of the various agricultural financing initiatives that government has implemented over the years, poor response of formal commercial banks to agricultural lending and weak regulation of the microfinance institutions at (Tier-4) to effectively deliver credit to small holder farmers. A critical review of two successful models in prompting access to financial services by small holder farmers suggests that if government is to succeed in promoting access to financial services by small holder farmers, there would need to have strong institutional framework for agricultural financing. Exploring the establishment of a rural or agricultural development bank could be a better option for Uganda.
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