KAMPALA: The Shadow Finance Minister, Hon Muwanga Kivumbi has listed five challenges that could derail the Parish Development Model, offering four possible interventions.
The Parish Development Model is a government run microfinance initiative that seeks to create a Shs400 billion revolving fund to help local farmers and entrepreneurs access credit.
But MP Muwanga Kivumbi says the biggest challenge standing in the way of the initiative is erratic produce prices.
“While the agriculture sector needs quality inputs, insurance, arable land and financing, its potential is suppressed to a greater extent by unstable and unpredictable prices which have been depreciating over the years,” said Muwanga Kivumbi.
Muwanga Kivumbi also said government has littered its financial interventions across projects such as the Youth Livelihood Programme throwing the financing and supervision of such projects into confusion, a jinx he said could follow the Parish Development Model.
Revolving funds given to beneficiaries regenerate with such a slow pace, he said, that could effectively render the idea a non-starter.
“On several occasions, government facilitated revolving funds such as Emyooga Youth Livelihood Programme and the Uganda Women Entrepreneurship Programme have been regarded as donations from government…they are regarded as political donations and parallel systems within government,” he said.
Muwanga Kivumbi also noted that there is a problem with agriculture financing, because of the risks associated with it and that the programme is a replica of many other failed interventions of the same kind.
To salvage the programme, Muwanga Kivumbi said there is need to establish a price stabilisation fund to create buffer stocks that gives government a free hand to either introduce stock or buy excesses from farmers to ensure price stability.
The Shadow Finance Minister also called for the re-establishment of the Cooperative Bank which he said will have the confidence to loan to farmers as against the risk-averse commercial banks that cannot tolerate the uncertainties surrounding agriculture and the other interventions listed in the programme.
Given the agro-centricity of the Parish Development Programme, Muwanga Kivumbi also proposed the transformation of the Agricultural Credit Facility into an agricultural bank.
Lastly, Muwanga Kivumbi said a fertilizer manufacturing factory should be established to serve the programme’s fertilizer needs.
Finance State Minister (General Duties), Hon Henry Musasizi said currently, Cabinet is reviewing the model and that the views given by the Opposition will be incorporated.
“Cabinet is yet to approve the agreed upon framework; in this regard, I wish to undertake that we will come back to this House with a comprehensive statement,” he said.
MP Aisha Kabanda (NUP, Butambala District) said government should guard against having this programme suffer the same fate as its predecessors.
“What are we doing differently so that when we say there will be processing, the processing actually happens; we have put a lot of money into the Uganda Development Bank, but we know it is nearly impossible for ordinary people to access the funds,” she said.
The Minister of State for Agriculture (Animal Husbandry), Hon Bright Rwamirama welcomed the ideas, promising to give them due consideration.