Uganda's NARO turns to private investors as research funding tightens

Uganda's National Agricultural Research Organisation (NARO) wants private investors to commercialise its dairy and fish feed plants, feed mills, automotive garages and hostels, as declining development-partner support and competing budget demands squeeze its financing model.

Director General Dr Yona Baguma presented the plan on Wednesday at a Top Policy Management meeting at Speke Resort Munyonyo in Kampala. Public-Private Partnerships (PPPs), he argued, are the way for the organisation to extract revenue from infrastructure it already owns.

"NARO has several facilities whose capacity we need to harness to generate revenue for sustainable agricultural research and also make a contribution to the national coffers," Baguma said.

Which assets are on the table?

The proposal names specific facilities across NARO's institute network:

• The Dairy Processing Plant and Livestock Feed Mill at the National Livestock Resources Research Institute (NaLIRRI)
• The Fish Feed Mill at the National Fisheries Resources Research Institute (NaFIRRI) in Kajjansi
• The Feed Sorting Facility at Mbarara Zonal Agricultural Research and Development Institute (Mbarara ZARDI)
• Automotive garages at the National Semi-arid Resources Research Institute (NaSARRI), NaLIRRI and the National Crop Resources Research Institute (NaCRRI)
• Hostel facilities at NaFIRRI in Jinja and Mukono Zonal Agricultural Research and Development Institute (MuZARDI)

Project concept notes and feasibility study reports went to NARO's top management for review before further development of the potential investments. No timeline, valuation or partner-selection process appears in the documents presented.

What is driving the shift?

Government remains NARO's primary funder under the law establishing the organisation, and Baguma acknowledged that the annual budget has risen from Shs61 billion to Shs223 billion over the past decade — a roughly 3.6-fold increase. He contends public financing alone cannot meet the organisation's growing research and innovation needs.

"Over the last 30 years, we have done a lot as NARO, but we must continue finding ways of securing resources for sustainable research. We need to add value to the facilities we have and make them work for us," Baguma said.

NARO already runs commercial initiatives that it points to as proof of concept. Licensing improved crop varieties to private seed companies generates more than Shs1 billion annually. Its seed hubs, notably the coffee seed hub, produced products valued at more than Shs20 billion in the last financial year. An anti-tick vaccine manufacturing facility holds vaccine stock valued at more than Shs20 billion.

"These investments are intended to make NARO more self-sustaining. We must invest our brains and make the right decisions," Baguma said.

How would the partnerships work?

Jim Mugunga, Executive Director of the PPP Unit at the Ministry of Finance, Planning and Economic Development, backed the initiative and framed it as fiscal necessity rather than preference.

"No country can fund everything it needs to do entirely through its national budget. Government has therefore been encouraging institutions to identify opportunities where private sector partnerships can bring in the strength, technology, innovation and financial resources needed to expand service delivery," Mugunga said.

Under the model he described, NARO would retain the capacity it needs for scientific work while private investors exploit surplus production capacity — feed processing plants and improved pasture production were his examples. The arrangement, he said, generates value from investments government has already made rather than leaving machinery underutilised.

Mugunga tied the partnerships to the government's Tenfold Growth Strategy and the Parish Development Model, arguing that agricultural research must increasingly become products and services that reach farmers. The PPP Unit pledged to support NARO in developing viable investment opportunities alongside the Ministry of Finance, Operation Wealth Creation and the Ministry of Agriculture, Animal Industry and Fisheries.

What remains unresolved?

The commercialisation process still requires investment structures that protect NARO's public research mandate while ensuring private participation delivers value from publicly funded infrastructure. How the organisation balances revenue generation against its core scientific mission will depend on the terms of the agreements now awaiting development.