A group of investors from Mauritius are currently in talks with the government to invest in sugar production, an official in the Ministry of Trade and Industry has said.
Emmanuel Hategeka, the Permanent Secretary in the Ministry of Trade and Industry, said the group that comprises of global investors, has already completed preliminary studies to identify where the sugar factory will be established.
"Currently, the group is in the last phase of feasibility studies; and based on their findings, we shall have to discuss the way forward," Hategeka said.
The studies are being conducted in the Eastern Province; the same area where similar studies that were conducted in the 90s proved some places as being suitable.
If the investors set up the factory, it will be the second in the country after Kabuye sugar factory owned by East Africa's investment giant, Madhvani Group.
The sugar factory is seen as one of the measures that will in future help curb sugar shortage in the country.
At full production Kabuye produces 11,000 tonnes of sugar annually yet the demand stands at 70,000 tonnes, according to the Ministry of Trade and Industry. Last year, Kabuye announced it will triple its production but still this brings its production capacity close to a half of the demand.
Until recently when the government allocated more land to Kabuye, the factory has been growing sugar cane on 3,148 hectares of land in Nyabarongo and Nyabugogo areas.
However, the factory says that about 1,448 hectares are permanently submerged due to a poor drainage system and that this reduces or affects not only the quantity but also the quality of sugar produced, according to Thiru Navukkarasu, the General Manager of Kabuye.
The deficit has left the government with no option but to import sugar from various countries including Zambia, Brazil and other member countries of the EAC.
This has effects on the national economy in terms of trade imbalances and forces the public to consume imported sugar which is more expensive compared to the locally produced product.