Uganda: Sugar factory faces closure in Namayingo district, hundreds of jobs at risk

Over 600 people are at risk of losing their jobs following the government’s order to close a sugar factory in Namayingo District, reported

The Ministry of Trade, Industry, and Cooperatives has directed CN Sugar Ltd to cease operations, citing its failure to establish a nucleus estate of at least 500 hectares before setting up the factory. Trade Minister Francis Mwebesa, in a June 17 letter to the factory, pointed out that the factory had only established 121 hectares before starting the mill.

“In your application to establish a sugar mill in Namayingo dated September 30, 2022, you were issued a no-objection letter on November 9, 2022, with the condition that you establish a nucleus estate of around 500 hectares,” the letter states. “However, during the verification exercise, it was found that only 121 hectares had been established.”

Consequently, Mwebesa said the company’s certificate to set up the factory has been revoked. “You are advised to find alternative land outside the Busoga Sub-region where substantial land can be acquired for a nucleus estate and submit the details to the minister. Any inconvenience caused is highly regretted,” the letter continues.

In response, CN Sugar Ltd manager Rashid Kakungulu asserted that they have met the government’s requirements. “We have acquired 1,300 acres of land because the directive was to buy land, and they only need 1,250 acres. We have 300 acres of sugarcane at the site and have planted about 650 acres in the field,” he said.

Kakungulu urged the government to consider the investment already made in the factory. “We have not yet installed the machinery, but the factory’s construction is 40 per cent complete with $6 million invested so far. Unless the government compensates the investors with $15 million, we will not leave the area,” he said.

He added: “The minister gave us a license to construct the stores, staff quarters, perimeter walls, and canteen. The outgrowers have spent a lot on planting sugarcane, yet the same minister has now revoked the license.”

Namayingo District chairperson Ronald Sanya said they plan to petition President Museveni to intervene, as CN Sugar Ltd is the only industry that has been built in Namayingo since its establishment.

Namayingo District Vice Chairperson  Abdallah Twaha Kawuta mentioned that they were expecting revenue from the factory in the form of taxes to enhance service delivery in the area.


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