World Bank: Low farm productivity traps millions in poverty

KAMPALA, Uganda — A recent World Bank report warns that millions of Ugandans remain trapped in poverty due to stagnant agricultural productivity, despite the country recording a 6.3% economic growth rate.

The December 2025 Uganda Economic Update acknowledges gains in inflation control and exports but highlights a persistent productivity trap. While nearly seven in 10 Ugandans earn their living from agriculture, the sector contributes only a quarter of the national gross domestic product.

This imbalance explains why economic prosperity feels abstract to rural households. Development experts argue that structural transformation is impossible when the majority of the population produces too little to accumulate savings or invest in higher-value work.

According to the report, the foundation of Uganda’s economy is hampered by several structural failures. Fertilizer use averages between 3kg and 8kg per hectare, and irrigation covers less than 1% of potential farmland. Furthermore, only a small fraction of farmers utilize improved seeds.

These factors create a cycle where a lack of surplus leads to a lack of cash flow, preventing investment in the very tools needed to escape subsistence farming. Analysts suggest that the fashionable argument to “move beyond agriculture” is flawed, noting that no country has transformed by abandoning an unproductive sector that employs the majority of its people.

The World Bank emphasized that agro-industrialization efforts will remain hollow without addressing primary productivity. They point to the coffee sector as a model where increased yields and quality successfully spurred processing capacity and surged exports.

However, the report also notes a fiscal dimension to the problem. Rising debt service and recurrent government spending are currently crowding out the investments required to raise productivity, such as extension services, rural infrastructure, and research.

Climate change adds further urgency to these reforms. Low-productivity, rain-fed systems are the first to collapse under environmental stress, making agricultural productivity a vital strategy for national resilience.