Uganda’s two-decade grind in zero returns from a ‘Banana Pyramid’

The project was meant to transform the locally grown crop into high-quality products such as gluten-free banana flour, fibre and industrial starch – for export.

The brains behind the project says it is anchored on ground-breaking science, agronomy and technology to produce Tooke, a green banana flour brand, aiming to hit the shelves of stores and eat into the share of the wheat-dominated global market starting in 2027 – if everything goes according to plan.

Besides the two-decade lack of returns for the taxpayer, nearly 3,000 farmers who were recruited to supply fresh bananas have suffered the agony of waiting for the project factory to reach full processing capacity as their crop goes to waste.

“Our bananas are rotting,” says Yosamu Katambira, 74. “We want the factory to increase capacity so that we can supply bananas many times a month. Our bananas will be gold only if they address the project’s flaws like capacity, price, extension services and irrigation.”

“The 10 tonnes they require us to supply monthly are covered by 15 farmers, which means more than 380 farmers are left without demand. We have the capacity to supply up to 10,000 tonnes a month,” says Selian Muhumuza, chairman of Bumbaire Banana Farmers’ Cooperative Society, one of the supplier groups, with 400 members.

As potential consumers await the project’s first products to hit the stores and export markets, Uganda has imported at least 15,107 kilogrammes of banana flour varieties for commercial use between 2020 and now, spending over Ush28 million ($7,636), according to customs records at Uganda Revenue Authority.

The banana flour is sourced from South Africa, Kenya and Ethiopia as of July 2024.

Uganda’s slow pace has seen competition from South America and Asia – whose countries ventured into banana research and development much later – overtake the East African nation to dominate the export markets.

Contrasting models

Next door, Kenyan entrepreneurs have developed banana flour products on their own, setting up processing plants for both the local and export markets.

Read: Ugandan traders bemoan erratic road fees on EAC trade routes

In 2010, Kenyan entrepreneur Eric Muthomi conceived the idea to process bananas into flour, and within two years, he had the products on supermarket shelves, trading under the Stawi Foods and Fruits brand.

Muthomi’s initial total investment was Ksh5 million ($38,320) in a facility that processed 20,000 kilogrammes of flour a month, while the Uganda’s Banana Industrial Research and Development Centre (BIRDC) seeks to operate a semi-automated plant with a daily processing capacity of 14 tonnes of fresh bananas.

In addition to billions sunk into the project since 2005, in the current financial year, Uganda’s Treasury provided an additional Ush50 billion ($13.63 million) to complete the capitalisation of the company to transition into a self-sustaining business.

This allocation for just one year, is over 355 times the amount the Stawi Foods entrepreneur invested for the entire project, which produces 91 tonnes of banana and other flours per year, with its turnover at $802,501 as of November 30 2023, focusing on the local and export markets.

Part of Stawi’s challenge is supply: Kenya is not as big a producer of bananas as Uganda. For instance, the company requires 10,000 kilogrammes of raw bananas to produce 1,000 kilogrammes of flour, according to a Nation Africa. In Uganda thus far, supply exceeds what the factory has capacity to process.

According to the National Agricultural Research Organisation, Uganda is the world’s second largest producer of bananas after India, generating over12 million tonnes per year yet nearly 75 percent of the crop is grown for local consumption as a staple food and a source of income.

Despite its top position as a producer, Uganda ranks 40th in terms of export because its unprocessed products have a short shelf life and the country continues to grapple securing permits to export banana flour due to pending quality assurance approvals for foreign markets.

For its capacity and range of products, the BIRDC, is the first of its kind in Uganda and the East African region. Its return on investment, however, remains in doubt due to the time spent in incubation while rival producers have made significant progress in banana value addition and exports.

By 2027, it will be 22 years since the inception of the project, while leading countries such as Ecuador, India and the Philippines which dominate the global market took under five years to export banana flour.

Bottomless pit, no fruit

Critics argue that the Kenyan model has worked over a shorter period of investment because it is a private enterprise and owner-funded, compared to Uganda’s BIRDC, which opposition legislator Dr Michael Lulume Bayiga, describes it as “a bottomless pit” that has taken billions of shillings, with no returns.

“This year, we refused to allocate it even a single shilling but it was President Yoweri Museveni who called the shots and gave it Ush50 billion,” says Dr Lulume Bayiga, who sits on Parliament’s Budget Committee. The committee toured the factory in April 2024 and declared there had been no value for money invested so far.

Read: Uganda budget cuts, low spend ruin hospitality sector

Ugandan lawmakers say they are running out of patience on the project whose end product remains elusive.

“When we visited the facility in April, the banana peeling machine failed to work. From our inquiries, we learnt that casual labourers are brought in to do the peeling manually because the machines don’t work and the flour used to make a few items is imported,” alleged John Baptist Nambeshe, opposition chief whip and member of the budget committee.

During the presentation of the 2024/25 budget in June, legislators greeted with jeers the Ush50 billion ($13.5 million) that Finance Minister Matia Kasaija allocated the Presidential Initiative on Banana Industrial Development Project (PIBID) – now BIRDC.

The money is to support the construction of a drier farmhouse at the factory, pay salaries for 150 staff and several casual labourers.

It is also to complete capitalisation and transition into a self-sustaining business, as it seeks to service early export orders from South Korea, Saudi Arabia, Qatar, Italy and the US.

“This project has shown potential for import substitution by replacing wheat, and also by providing gluten-free starch products. These have high global demand,” Mr Kasaija said.

Prof Florence Isabirye Muranga, the BIRDC executive director, said obtaining ISO certification and the Food Safety Management System (FSMS) green light has been an ongoing and costly process. Adapting Tooke products to meet the specific requirements of each market is challenging.

“It is commensurate to understanding the difference between raising a child for the village vis-à-vis for the world stage. The demand for the product comes with a string of requisite requirements for compliance with the respective marketplace laws, regulations and appetite,” she explained.

To overcome the challenges of market access, BIRDC has been working on forming joint ventures through Uganda’s trade representatives abroad, especially in the US. By partnering with local businesses, they hope to make market entry smoother.

In early August, executives from Michigan-based firm DET Imports visited the banana flour factory to assess its capacity to supply the US market and expand culinary options for consumers, according to Tambouridis Angela Elaine, the company’s Chief Supply Chain Officer.

Another partner is Synergy Hub, a US company based in Chicago, Illinois. BIRDC is seeking alliances with them to facilitate entry into the American market, which currently accounts for 36.7 percent of the banana flour export market.

In 2005, Prof Muranga said that she had secured markets Italy, Germany and Switzerland, where demand for gluten-free starch was high, but now defends the slow pace her innovation has taken to hit those markets and post a return on investment.

"If you want to do something in a rush, you build a cottage, if you want to build a pyramid, you will take two decades," she said, in an interview with The EastAfrican.