Dmitri PoshidaevMany UN agencies have a very specific thematic focus: they deal with women, children, health care or other important issues. However, UNCDF can get involved in a variety of thematic areas, as long as there is a financing solution that can be used to address a specific challenge, from education to agriculture.
Uganda promises a lot. For example, 50 percent of all arable land in East Africa is in Uganda; 75 percent of the Ugandan population are young people under the age of 30.
So this potentially creates the conditions for Uganda to move towards achieving the Sustainable Development Goals and its own development goals.
But to unlock that potential, you need to invest in building systems that allow the country to use that potential and, among other things, find and apply various financial solutions and make sure that there is adequate financing for those development plans.
UN News Do small businesses in Uganda find it difficult to access finance?
Dmitri Pozhidaev Yes. We know that there is a lot of unattended demand. The real problem is that in the context of the private sector, we are talking about very rudimentary and inexperienced business structures and processes. They do not create enough confidence with potential financiers, such as banks and providers of capital, that those entities will be able to use the funds in the best possible way and will be able to pay their debts.
UN News How do they manage to tackle this problem in the north of the country?
Dmitri Pozhidaev In Northern Uganda, we are engaged in several areas. One is to support local governments and the public sector, particularly at the district level, to find financial solutions to various public projects. Those public projects may be in the area of adaptation to climate change, local economic development or in the area of forced displacement.
Agriculture employs around 75 per cent of all Ugandans, so it is important that we take agriculture to the next level, in terms of productivity and competitiveness.
We are also engaged with the private sector in digital finance and the digital economy, to connect small farmers and village savings and loan associations, integrate them with the formal banking system and thereby improve their access to finance.
UN News You have worked with companies that sell solar energy services in the north. Why?
Dmitri Pozhidaev Access to electricity remains a challenge in Uganda, and access to the electricity grid is not available in many places, especially in rural areas.
But even in Kampala and larger cities, there are frequent blackouts and interruptions in electricity supply, which has multiple implications for businesses, individuals and government institutions.
Ensuring access to solar energy provides additional opportunities for businesses, particularly micro and small ones, and especially in rural areas. Having access to electricity allows those businesses to extend their work hours because they can now work beyond daytime hours.
For people, it means enlightenment and allows students to use electronic devices and study longer.
We are working with a company that provides solar panels on a pay-per-use basis. Your customers’ payments are digitally tracked, which means they can build a credit score, making it easier for them to get loans from the formal banking system.
This is very important in an economy where 90 percent of employment is in the informal sector: in the absence of formal records, it is very, very difficult for someone to gain access to the formal financial system.
UN News Some of its projects involve financing from MTM and Airtel, the largest telecommunications companies in Africa. Why should they receive funding from the UN?
Dmitri Pozhidaev People often find this surprising. They think that a large company can afford to expand into less traditional and riskier areas.
This is not the case, even for very large and financially strong companies like MTM and Airtel; Unless the viability of the business case is demonstrated to them, they clearly will not go into areas they are not currently involved in.
And this was the case in the refugee camps. Telecommunications companies have serious doubts about the ability of refugees to buy the products they offer.
But by demonstrating refugee demand and ability to pay, and facilitating through some relatively small grants, we enabled these businesses to expand into refugee camps in northern Uganda.