What you need to know:
- Running through June 2027, the STAR project targets agribusinesses across 10 districts in Northern and Northeastern Uganda, including Lira, Oyam, Pader, Lamwo, Kitgum, Agago, Abim, Karenga, Kaabong, and Kotido.
- The initiative focuses on building natural disaster resilience and market competitiveness across the cassava, shea, and oilseed value chains.
Exorbitant interest rates, stringent collateral demands, and fragmented producer networks are crippling the competitiveness of Uganda’s shea butter sector on the global stage, trade experts and local processors have revealed.
Small and medium-sized enterprises (SMEs) operating within Northern Uganda’s shea value chain face significant hurdles when attempting to scale up operations, primarily due to commercial lending constraints that make capital virtually inaccessible.
Speaking on the sidelines of a two-day assessment of the Strengthening Agribusiness Resilience and Competitiveness (STAR) project in the Acholi sub-region on Friday, Ms. Anna Summer, a program officer with the International Trade Centre (ITC), highlighted the financial barriers frustrating local processors.
“Very high interest rates—which SME would want to take a loan with 18 to 20 percent interest rates? They cannot manage that, and the collateral requirements are very heavy, so there are very few suitable financial products available,” Ms. Summer noted during the field visit conducted alongside officials from the Ministry of Trade.
Beyond financial bottlenecks, Ms. Summer pointed out that supply chain inefficiencies and geographical isolation hamper the steady aggregation of shea nuts needed for bulk processing and export.
“Aggregation is very key, and in these districts, this is a very big challenge due to remoteness, the fragmentation of producer groups, and the quite loose aggregation capacity. In many cases, we are dealing with quite weak cooperatives that need a lot of strengthening,” she explained.
To cushion agribusinesses against these systemic shocks, the STAR project—a initiative funded by the Korea International Cooperation Agency (KOICA) and implemented by the ITC—introduced targeted financial interventions.
Mr. Allan Wayira, the STAR project program officer, explained that a matching grant facility was created to inject fresh capital into struggling enterprises.
“We introduced the grant as catalytic support to SMEs to catalyze their investment and gain access to markets, because many SMEs really struggle to access finance,” Mr. Wayira said. “It was an envelope of 86,000 United States dollars, but since it is a co-investment, the SMEs contributed 50 percent.”
Mr. Wayira added that beyond financing, product presentation remains a critical obstacle preventing Ugandan shea products from reaching premium overseas shelves.
“Farmers and producers also struggle with branding and packaging. It is quite a challenge for many of them because, for those who are really interested in exporting, some of that packaging cannot be accepted in the export market,” Mr. Wayira stressed.
Running through June 2027, the STAR project targets agribusinesses across 10 districts in Northern and Northeastern Uganda, including Lira, Oyam, Pader, Lamwo, Kitgum, Agago, Abim, Karenga, Kaabong, and Kotido. The initiative focuses on building natural disaster resilience and market competitiveness across the cassava, shea, and oilseed value chains.
Over the past three years, the project has facilitated international trade exposures, sponsoring local processors to exhibit products at trade fairs in France, South Korea, Kenya, and across the European Union.
Local beneficiaries report that these interventions are beginning to yield direct commercial dividends despite lingering structural challenges.
Ms. Margaret Laloyo, Director of Blessed Organic Release Ltd—a Pader-based social enterprise working with over 6,000 local farmers—acknowledged that technical capacity building has transformed their business trajectory.
“Our partnership with the STAR project pushed our sales from 10 percent to 50 percent because of improvements in branding and packaging. It was from this project that we deliberately named and branded our product,” Ms. Laloyo said.
She noted that international exposure has opened major supply channels in European cosmetic markets.
“The project exposed us to the In-Cosmetics trade shows in South Korea and Paris. From the Paris exhibition alone, we secured trial orders of more than 200 kilograms, another 50-kilogram trial order from Germany, two metric tons from Belgium, and an additional 200-kilogram order from France,” Ms. Laloyo added.