In the 1960s, Uganda was sub-Saharan Africa’s largest cotton producer. Political instability and poor policy choices of the 1970s led to the sector’s decline. Attempts to revive the sector with lending operations during the 1980s failed, but policy reforms combined higher cotton prices revitalized the sector in the 1990s. Nevertheless, there remained the sense that the sector lagged behind its full potential due to low quality of cotton, lack of domestic textile industry and a limited use of inputs due to a lack of rural credit. Cotton today remains a key priority sector for the government of Uganda as it is one of the top five exports. It is particularly important to northern Uganda as a traditional cash crop.
AgDevCo is providing $2,500,000 in working capital to GADC as part of a consortium with other social lenders including the Lending for African Farming Company (LAFCo.) GADC is a cotton, sesame and chilies aggregator and processor established in 2009 in northern Uganda providing inputs, training and marketing access for tens of thousands of local farmers. It was one of the first commercial companies to establish operations in northern Uganda following the end of the civil war.
AgDevCo is also providing a grant alongside the loan to help farmer groups access credit and affordable mechanisation solutions. The grant funding is through AgDevCo’s Smallholder Development Unit in partnership with the MasterCard Foundation. See case-study of AgDevCo’s impact on agribusiness and smallholder farmers at GADC here.