Announcement of Three Million Dollar Credit to Uganda for Livestock Production on September 25, 1968

FOR IMMEDIATE RELEASE • INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H ~TRE.l::T.--N.w:. ·wASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 68/23 Subject: $3 million credit to Uganda September 25, 1968 for livestock production A major effort to increase beef cattle production will be initiated by Uganda with the assistance of a credit of $3 million from the International Development Association (IDA). Funds will be provided for ranch investments by enterprises operating on some 400,000 acres of natural pastureland in various parts of Uganda, and for related technical services. Agriculture contributes about two-thirds of Uganda's gross domestic product, with the beef industry accounting for only about 4%. In view of the uncertain • price prospects for cotton and coffee, the principal exports, it is essential that Uganda diversify agricultural production. The expansion of livestock pro- duction offers the best opportunity for this diversification. Uganda has large expanses of natural grassland and a climate ideally suited to the raising of cattle. Until recent years the expansion of the livestock industry was limited by the prevalence of disease. The Government's successful efforts in clearing large areas of unoccupied land from the tsetse fly has opened up some of the country's best grazing land on which it is conservatively estimated that a million head of cattle could be carried. It is planned to exploit this potential mainly for commercial farming. The project being assisted by the IDA credit provides for the development of five large ranches, each of 38,000 to 45,000 acres, operated by Uganda Livestock Industries (ULI), one cooperatively-owned ranch of 38,000 acres, and about 50 pri- • vately-operated ranches of about 3,000 acres each. /more I IDA No. 68/23 - Uganda-Livestock Production • - 2 - The increased production of high-quality beef resulting from the project will enable Uganda to reduce imports and also to develop exports of beef products. Indirect benefits will accrue from the project's contribution to upgrading the national herd of livestock, demonstration of better production techniques and disease control, and the training of Ugandans in livestock development. Loans will be made to the ranching enterprises by the Uganda Commercial Bank and three other participating connnercial banks. Financing will be pro- vided for such investments as on-ranch roads, firebreaks, fencing, water supply, stock handling and animal health contr~l facilities, ranch buildings, breeding stock and initial procurement of feeder steers for fattening. Technical services will be provided by an internationally recruited Project Director who with a small team will assist in the preparation of individual ranch development plans and supervise their execution. The Project Director will be responsible to a Project Committee, comprising representatives from the Government Departments concerned, the Central Bank, the Uganda Connnercial ~ Bank and from the participating banks. The total estimated cost of the project is estimated at the equivalent of $5.1 million, of which $4. 7 million will be for ranch development and $400,000 for technical services, The IDA credit will cover about 60% of the costs and the balance will be provided equally by the participating banks and the ranching enterprises. The IDA credit will be for a term of 50 years. It will be free of interest but a service charge of 3/4 of 1% will be made to meet IDA's administrative costs. The Government will re-lend $2.7 million of the credit to the Uganda Commercial Bank for a period of 10 to 12 years, with an average interest rate of 6%. The Uganda Commercial Bank will in turn re-lend the proceeds to ranching enterprises both directly and through the three other participating banks for similar periods with interest at 8%B - 0 - •