Members of the academia and EfD research fellows on 25^th April, 2024 held a co-creation workshop with representatives from government ministries, civil society organization and the private sector to generate a context-relevant Micro, Small and Medium Enterprise (MSMEs)-led model for supporting the transition to low-carbon ag-tech by smallholder farmers.

The EfD in collaboration with Partnership for Economic Policy (PEP) embarked on the study titled, “Clean Energy For Development: A Call For Action (CEDCA): Renewable Energy MSMEs operating to modernize agriculture in Sub-Saharan Africa and South-East Asia: Barriers, opportunities, and implications for an inclusive low carbon transition”

The project funded by the International Development Research Centre (IDRC) is being implemented in four countries namely; Burkina Faso, Kenya, Uganda, and Vietnam.

The EfD-Uganda project team is composed of Prof. Edward Bbaale, who is also centre Director, Dr. Aisha Nanyiti Lecturer, School of Economics, Dr. Florence Lwiza, Lecturer, School of Agricultural Sciences and Gyaviira Ssewankambo, Junior Research Fellow.

The objectives of the study were to establish the barriers and opportunities for the emergence of a vibrant MSME sector to support the use of modern energy technologies in agriculture for inclusion of women and youth in the ag-tech MSMEs value chains and to undertake rigorous tests of context-relevant models to support the transition to low-carbon agricultural technologies.

The study undertook a three phased approach namely the Diagnostic, Design and Test phases.

The Diagnostic phase whose findings were presented by Dr. Lwiza Florence sought to understand the state of affairs on the supply side and the demand side of the renewable ag-tech industry in Uganda. Among other things, the diagnostic phase sought to establish the type of ag-technologies supplied by the renewable ag-tech industry, the scale of supply-side players, State of women, youth, and other groups involvement on the ag-tech supply side, the type of ag-technologies demanded and needed by the farmers, the state of women, youth, and other groups involvement on the ag-tech demand side, barriers to up-take of low-carbon ag-techs and opportunities for supporting the emergence of a dynamic MSME-led transition to the use of low-carbon ag-techs.

The Test phase will involve rigorous impact evaluation of an MSME-led model.

In the Design phase, a Co-creation workshop with MSMEs and Stakeholders had a plenary session to generate a context-relevant MSMEs-led model for supporting the transition to low-carbon ag-tech by smallholder farmers.

Participants joined in a discussion on renewable energy projects in their organizations and their experiences with low-carbon ag-techs like solar or hybrid water pumps, batteries, generators, driers, fridges, and millers.

The research team also sought the stakeholders’ opinion about the effectiveness of sensitization programs in advancing the uptake of modern ag-technologies, their opinion of a fairly feasible MSMEs-led model for enhancing smallholder farmers, women, and youth uptake of modern ag-technologies plus any feedback or questions to the research team.

The workshop was officially opened and closed by the Director Directorate of Graduate Research and Training Prof. Edward Bbaale who is also Director EfD-Uganda.  Bbaale emphasized the contribution of stakeholders a key to the project success.

 “If we must do research that will change our society, then it is you, colleagues, that must work with us. If you don’t agree to work with us, then we shall be developing solutions and developing policy recommendations that will not actually serve the purpose.

And because of that, then we count on you continuously to work together, to craft together, to co-create together so that we can be on the point. We need to work together so that the results that we get and the recommendations can be usable by you, can be acceptable by you, and then in so doing we shall change our society and experience the true socio-economic transformation,” Bbaale stressed that in trying to understand many of the intricate aspects of the society and economy, the centres key focus is to work with stakeholders in government, the private sector and other non-public entities.

He stated that the issue of green transitions is a global question being approached from different aspects where energy and low carbon solutions occupy a very important space. Commending Government of Uganda for different initiatives promoting use of clean energy, Bbaale expressed the need for agriculturalists and those in the value chain to use renewable energy for production, processing, value addition and marketing.

“So if we are to transit, we must get a solution in terms of energy. We must get a solution for the energy at home, in the workplaces, in the industries and we must get a solution for the energy in the transport sector” he added and appreciated participants for the exchange of ideas especially the  number of ideas on what other people are doing as far as SME energy solutions are concerned. He assured participants that in doing research, the center and university are open to ideas, and so was the reason for this workshop.

Makerere University, as an institution, Bbaale explained, is focused to becoming a research-led and innovation-driven institution. And because of that, he added Makerere is looking at research that interrogates into the different technologies and research that lead to new innovations.

“And I want to say that the type of work that we are doing in this research is about the energy solutions as they exist in the small and medium enterprises. And as a result, we are right in connection with you, stakeholders, in an attempt to address the problems that our society faces.”

 It is now well known that the world is transiting, but now through the transition to low carbon solutions, research is at the core of what we are, what we must do and where we must go. The country is relying on us”, the professor said.

The approach to research he added is building with colleagues, through collaborations, making sure that the policy actors, the researchers from Makerere, people from  government ministries SMEs, civil society, the private sector and others come together to craft a solution that is workable in the real world today.

Presenting the study overview Dr. Aisha Nanyiti explained that Climate change poses significant risks to farming households around the world but the risk is higher for SSA with about 600 million people living in severe energy poverty.

Households, according to Nanyiti, have limited potential to cope with climate risks. While not among the big emitters, Uganda’s climate action contributes to global climate efforts, and reduces the country’s vulnerability to spatial climate change effects, given the limited coping potential.

“Uganda’s agricultural sector contributes highest to its emissions and accounts for 53.3% of the GHG emissions.  Low-carbon agricultural energy technologies are hence an indispensable fragment of Uganda’s energy transition.

However, the uptake of these technologies is low.  Lack of access, affordability, knowledge of alternatives, and financing are cited as the key barriers to uptake”, Nanyiti said.

Dr. Nanyiti further explained that MSMEs can play a central role in driving the uptake of low-carbon ag – technologies. The highest proportion of Uganda’s MSMEs she reported are engaged in the agricultural sector with high potential for involvement of women and youth, potential adopters of ag-tech, and distribution of ag-tech, through innovative business models.

Participants appreciate the project, ready for further engagements

Key outputs from the stakeholders engagement included agitation for sensitization, relating the project to government initiatives and existing legal framework, scaling up the project, learning from other countries what they have done, the need for heavy polluters to pay more, use of carbon credits as incentives to SMEs using clean energy, targeting real users of clean energy and standardization of products to eliminate counterfeits.

Representing the Assistant commissioner Ministry of Water and Environment Nathan Mununuzi also Senior Environmental Officer, appreciated the project and expressed the need to look at government initiatives in regard to promoting clean energy to safe guard the environment and increasing agriculture productivity.

“I really appreciate so far what has been presented. These are real facts on the ground, and we look forward to further engagements. So far you’ve engaged the MSMEs, but you’ve not had the story of what initiatives government is putting in place in regard to that subject”.

 He highlighted some of the government projects including the Uganda Intergovernmental Fiscal Transfer that is supporting farmers with irrigation technologies and promoting solar powered irrigation schemes. Another one is the wetland restoration project engaging and encouraging farmers to voluntarily leave the wetlands, but give alternatives to grow high-value crops and fish ponds on the fringes of the wetlands and a green fund which can support some of those initiatives.

Representing the Commissioner Ministry of Energy and Mineral Development, Micheal Ahimbisibwe a Senior Energy Officer, hailed the project team and implored them to consider numbers and percentages.

“I’m happy with the study myself and I would be very glad to read the detailed report. This was a summary and the summary usually doesn’t give a lot”.

Most of your observations were in terms of, more people agreeing to this, less people agreeing to this. It would do more in terms of percentages and numbers, so that it gives a very good comparison. Because more can be 70, can be 100. And then I think you also concentrated on a few technologies, mainly solar. There are many more technologies out there which are very helpful to agriculture sector than solar itself. Of course, everybody, when we talk about renewable, many people understand solar quickly because that’s what has been flushed into everybody’s mind.

Then there’s also the issue of the life cycle analysis. When we are deploying renewable energy it would be actually also important in value addition. When you are harvesting, you may need energy for harvesting. And I want to see you touching on that part”.

Ahimbisibwe clarified that the ministry designed a project that is supposed help the farmers and the companies have access to affordable financing, which will help them to deploy further and wider. The financing is structured in a way that the company which is dealing in renewable products can access the financing to expand their product line as well as the market range.

With established office countrywide this financing enables famers and SMES, get the renewable energy equipment that they would wish to have and pay back in small installments.

The other drawback was the research concentration in Kampala area, Wakiso and Entebbe which he argued do not have a lot of agricultural hinterland and therefore the agricultural inputs for which these companies are targeting to give out may not be so big. If the research team went out beyond this area, Ahimbisibwe reasoned, there’s more agriculture taking place there which can help the companies to sell much.

Ahimbisibwe reported that recently, government launched a free connections policy and got funding from World Bank to actualize that connection to anybody who is near an electricity pole and has never been connected but is willing.

“You can go and ask in your neighboring office to be connected, or even tell your friends and neighbors because the funding is available. What we are looking for are the people to be connected. But you must get your house wired properly for a connection to take place. But it is a free connection. If you are near a pole or you need one pole to your house, you can use that opportunity.”

 And since this is an agricultural symposium, Ahimbisibwe explained it is linked to energy with a component of clean cooking. Uganda according to Ahimbisibwe is highly dependent on biomass for cooking and the Ministry is trying to advocate for alternatives to biomass by making sure that biomass is used sustainably, but also deploying other alternatives into the market such as LPG, ethanol and electricity for cooking.

Assistant Commissioner for Agribusiness in the Ministry of Agriculture Animal Industry and Fisheries Yusuf Ogwang said the use of clean energy is a worldwide initiative which is also being emphasized by government ministries, agencies and departments covering the whole value chain from production to marketing.

Ogwang noted because most of the technologies come from the National Research Organisation, the ministry was encouraging the private sector to produce some of these technologies, that are user-friendly by the farmers, and also that are clean energy.

The ministry he said implemented the agricultural transit development project, in production, encouraging farmers in many irrigation sites on the use of solar, renewable energy.

The ministry he added has zoned our agriculture and within each zone there is a center for demonstration picking up and most of the people are using solar for irrigation.

 “And also in value addition, we discourage our farmers to use generators. Internationally it is not allowed. So we encourage them to use hydro power and also solar, clean energies. And this has picked up. This project supported so many farmers engaging in production, value addition and packaging”

He reported that government has a big project which is related to this one- the Uganda Climate Smart Agricultural Transformation Project covering about 70 districts all over the country. He called on the EfD researchers to join hands.

“… we should work together because there are so many things that you are doing here that we can borrow from you, and there are so many things that we are doing that you can borrow from us. Because this project is covering the whole value chain, animal, crops, animal stock, livestock, crops, and fisheries. Discovering all those value chains”.

The commissioner added that the ministry is now employing officers that have techniques in soil and land management. The project he said developed climate smart practices in coffee, plantations, and has five enterprises namely rice, beans, coffee, maize, and then cassava discouraging environmental degradation, in the whole value chain, from production up to marketing.

“In addition, the project is going to cover the whole areas of livestock, fisheries, and crop. So I think you are spot on. The only thing I want to emphasize is let’s work together. I think there’s a missing link. There are so many things we can do together so that we develop our farmers.”

Ogwang also appreciated the project presentations.

“I really like the presentation from my sister, Florence. Dr. Florence, you really put everything on the ground. Well put all those challenges, those are the real issues that are affecting our farmers. And then the recommendations, I was very happy with it”

Presentation on the Project overview and Diagnostic phase findings attached.

Jane Anyango is the Communication Officer EfD Uganda

A recent study by researchers at Makerere University’s College of Business and Management Sciences has identified the lack of a structured taxation framework for informal businesses as a significant cause of tax non-compliance among traders in Uganda. This revelation came from a collaborative research project involving eight university scholars, who examined the underlying factors contributing to the shadow economy and its implications for the national tax system.

The findings were presented by Dr. Ismail Kintu, the study’s Principal Investigator, at a dissemination workshop held in Nansana Municipality Council, Wakiso District, on Thursday. The research, initiated in 2022, aimed to assess traders’ perceptions of fairness within the taxation system and how this relates to voluntary tax compliance.

“Traders said the system is unfair to them,” Dr. Kintu explained during the workshop. “Our research aimed to understand what fairness means in Uganda’s context.” According to the study, fairness in the tax system is crucial for voluntary compliance, suggesting that taxes should be aligned with one’s revenue, and penalties should be applied equitably.

The researchers developed a proposed framework for taxing the informal economy, emphasizing the importance of consulting key stakeholders, such as district commercial officers, tax consultants, and leaders from traders’ associations, before implementing tax policies. The framework recommends engaging these stakeholders in meetings with the Uganda Revenue Authority (URA) and the Ministry of Finance to ensure that new tax policies are inclusive and fair.

The study also suggests the need for flexibility in tax collection, advocating for payment in installments and prior notification to traders before collecting taxes. This approach, the researchers argue, would help build trust and encourage compliance among informal traders.

The researchers’ proposed framework includes annual mapping of policy gaps in the informal economy and developing solutions to address them. This process would involve regular consultations with stakeholders to refine the tax system and maintain fairness.

Local officials who attended the workshop expressed support for the research findings. Mr. Festo Tandeka, Nansana Municipality town clerk, encouraged traders to cultivate a culture of paying taxes but cautioned against excessive taxation. He recommended allowing tax payments in installments to avoid overburdening traders.

Similarly, Mr. Shaffic Ali Nsubuga, Nansana Municipality Deputy Resident District Commissioner, urged tax officers to approach tax collection with compassion, suggesting that prior notices be given to traders before taxes are collected.

The findings of the Makerere University study arrive at a critical time, as Ugandan traders have recently protested against increasing taxes. Mr. Joshua Mawerere, a youth representative from the Kampala City Traders Association, welcomed the study, noting that it brings clarity to issues surrounding tax policies. He urged the government to raise awareness about new tax systems, like the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), which some traders mistakenly perceive as additional taxes.

The study’s comprehensive approach to understanding the informal economy’s taxation challenges may pave the way for a more inclusive and equitable tax system in Uganda, fostering greater compliance and reducing the size of the shadow economy.

The research was funded by the government of Uganda through the Makerere University Research and Innovations Fund (Mak-RIF). Speaking at the stakeholders’ engagement on April 25^th, Ms Evelyn Nyacho who represented the chair of the grants committee, congratulated Dr. Kintu and team upon the timely research finding. She said the findings would help URA and the traders coming after a traders’ strike over taxation. She said Mak-RIF was happy to sponsor research that is aimed at solving society issues like taxation. “I was happy to learn that taxes can be pay in installments. I hope traders can embrace this flexibility in paying taxes,” she said. She appreciated government for the research funding to the university. The government commits Shs30 billion annually to research at Makerere University in an effort to spur development of the country.

The research team

Dr Kintu (PI), Prof Eria Hisali (Co. PI), Dr Fred Bateganya, Dr Willy Kagarura, Mr Patrick Lumala, Mr Nicholas Musoke, Ms Marion Atukunda, and Ms Winfred Nalwoga.

The Makerere University Public Investment Management Centre of Excellence and the Ministry of Finance, Planning and Economic Development (MoFPED) have today 22^nd April 2024 started training of public officers in Public Investment Management. The team is undertaking the Economic Appraisal and Stakeholder Analysis module. The training, being held in Mbarara, was opened by Director, Directorate of Research and Graduate Training (DRGT) Prof. Bbaale Edward and Commissioner Ashaba Hannington represented by Ms. Gertrude Aerone Basiima.