The Observer (Kampala)

Uganda: Gomba - Delight Turns to Despair

All is going well for Marvin Kaitesi, a single mother of four. She can now sell her cows and easily deposit the money at her village bank at Kirasi, something that was never possible two years ago.

For Kaitesi, all this is possible because of the Kisozi poverty alleviation Sacco, which was started in 2010, under the presidential initiative, to help people of Kisozi access financial services. Since the inception of this 'village bank', some people of Kisozi are no longer threatened by thieves who used to torment them whenever they sold their property.

"We used to live in great fear. Whenever one sold a cow or agricultural produce, they had to hide the money in the house or dig and keep it underground, where thieves couldn't reach," Kaitesi, who also grows coffee, says.

Things are different today. People can now deposit their savings or get short-term loans at an affordable interest rate from the Sacco.

"I can borrow to pay my children's school fees and then refund when my coffee is ready. With the little savings, I'm now even constructing my own house," she adds.

Despite this success story for Kisozi, Gomba district is still struggling to have most of its residents out of poverty. Gomba was in 2010 curved out of Mpigi district, but it now struggles without a single commercial bank. It does not even have an ATM. Gomba's problems reflect the troubles many new districts in Uganda face. The problems bring to light government's policies of creating new districts that can barely stand on their own financially.

President Yoweri Museveni was recently quoted in the press saying he was tired of creating new districts. Uganda has 113 districts. District chairman Abdul Kyabangi confirms that more than 80% of the population in this district is unbanked. Many people, therefore, still prefer to keep their money at home, exposing themselves to theft. Gomba's civil servants have to travel up to Mpigi or Kampala, more than 50 kilometres away, in order to access their salaries.

"Here, there are only a few village Saccos and some mobile money points," he says.

According to the district Chief Administrative Officer, Elias Byamungu, banks do not just establish themselves in any area; they first look at the money in circulation.

"I have been in talks with dfcu bank and they are willing to come but they need at least money circulation of Shs 25bn," he says.

Byamungu is, however, optimistic that it will be a matter of time before a bank sets up in the district. Local revenue grew from Shs 53m in 2011 to Shs 200m in 2012. District officials expect this figure to double this year. Most revenue comes from cattle and its products.

Business hub

Despite the poor roads and limited banking penetration, Gomba remains a prospective business area. Its strategic location makes it a focal business point for the districts of Sembabule, Masaka, Mpigi, Butambala and Kampala. Last year, Maddu sub-county in the district was ranked second to Mbarara among the top milk supplying areas in Uganda.

On a daily basis, Maddu sends 20,000 litres of milk to Kampala, which Byamungu believes can increase to 100,000 in the coming years.

"We are now promoting exotic breeds and improved farming methods and also intensifying on veterinary services to improve milk production," he says.

Byamungu plans to promote the construction of a milk processing plant as well as a shoe factory to make good use of the skins and hides. Byamungu also says that people are being sensitized to engage in commercial agriculture. In the process, more than 50,000 coffee seeds and 5,000 mango plantlets have been given out.

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