Uganda: Sugar War Rages in Parliament

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President Yoweri Museveni wrote to the Speaker of Parliament, Rebecca Kadaga, rejecting the Sugar Bill, which was passed by Parliament recently.
21 November 2018

Parliamentarians are on the defensive in face of allegations that some have received financial perks to support the writing of a law to regulate the production of sugar in Uganda.

MPs first debated the draft law on November 15, throwing out a minority report by Nelson Lufafa (Butembe), which was pushing for the government line of zoning sugar producers.

The government policy literally protects the already established sugar producers from competition from newcomers as it prohibits licensing of new sugar mills to open up within a radius of 25km of an existing factory.

For a new mill to be licensed, its proprietors must satisfy the Uganda Investment Authority (UIA) that it has a nucleus sugarcane-growing estate of at least 500 hectares.

During the second reading of the draft bill on Tuesday, November 20, the state minister for Industry Michael Werikhe unsuccessfully tried to convince MPs to accept the government proposal. He told them that the law will not affect the newly established sugar factories as it will not be applied retrospectively.

Werikhe was not believed since previously, during a retreat organised by the ministry of Finance, at Lake Victoria Serena Resort Kigo, an idea was mooted for government to acquire a loan to compensate recently established sugar factories that are within the 25km radius of the already established sugar mills.

The retreat was organised for members of parliament Trade, Industry and Tourism committee along with their counterparts on the National Economy committee.

"The ministry invited us to explain the loan performance and the level of national growth but the minister, Matia Kasaija, provided no details on the performance of the economy. Immediately he got off the [podium], they invited some man from State House to make a presentation on the Sugar Bill," Mukono South MP Johnson Muyanja Ssenyonga told The Observer.

Ssenyonga is a member of the committee on National Economy. Other members of the National Economy committee said that while they took on the State House official, their colleagues on the Trade, Industry and Tourism committee appeared to have been part of the "deal."

"You could see that they had received prior briefing, and, the State House official appeared disturbed by the prodding he received from the rest of us," Manjiya MP John Baptist Nambeshe said.

Other MPs on the National Economy committee argued that acquiring a loan for purposes of compensating sugar millers before relocating them to new areas would be another avenue for increasing the debt burden on the taxpayers.

Sugar bags

Before the three-day retreat at Kigo, the Trade, Industry and Tourism committee had visited sugar millers and sugarcane outgrowers in Buikwe, Jinja, Mayuge, Kaliro, Masindi and Hoima districts.

From each sugar factory, the MPs visited, each went away with at least a 50kg bag of sugar. At one of the well-established factories, the proprietors allegedly handed a huge stash of cash to a flamboyant youthful MP to distribute to his colleagues.

The MP, however, angered his colleagues when he reportedly disappeared with all the money. They responded by voting against the interests of the funder. Some MPs whom The Observer spoke to on Tuesday claimed that the said MP again showed up last week in parliament to persuade them to support Lufafa's minority report because it best represented the interests of the sugar producer.

Some MPs claimed that some of their colleagues had pocketed about Shs 10 million to support the zoning of sugar producers on grounds that newcomers should not benefit from efforts of the old-timers.

The argument advanced is that the old-timers such as Madhvani's Kakira Sugar and Mehta's Lugazi-based Sugar Corporation of Uganda Ltd had invested in outgrowers. Allowing a new investor to set up a factory would subject them to unfair competition.

These were met with counter arguments that the old-timers were exploiting the outgrowers, and the only way outgrowers will enjoy competitive prices is by allowing competition.

Some of the new investors are also reported to have reached out to the MPs with financial incentives to vote against the zoning clause. Some of the MPs who are accused of being behind the bribery scheme pleaded innocence when The Observer spoke to them on Tuesday but none wanted to be quoted on the record.

One of them from western Uganda who is said to have been part of the racket claimed that he did not attend most of the committee meetings since he was out of the country. Another MP said to be promoting the interests of a big sugar corporation said, "they are accusing me because they know that [the sugar producer] is my friend and based in my constituency."

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