Govt bows to big producers demand, to amend sugar law

Wednesday March 23 2016

By Ismail Musa Ladu


Government has conceded to large sugar manufacturers’ demand to abandon regulating the lucrative sugar industry.
The sugar sub-sector industry players also exerted pressure on the Ministry of Trade to delete provisions in the approved Sugar Bill that would determine the price of sugar, warning that if their demands are not met, they will fight to the last man.

In January 2016, Cabinet approved the Sugar Bill 2015, which spells out conditions for registration and licensing of sugar producers to ensure quality and high production standards. The proposed National Sugar Act 2015 replaced the Sugar Control Act of 1938.

However, in a recent meeting with Trade minister Amelia Kyambadde, the big sugar manufacturers among them; Kakira Sugar, Lugazi Sugar and Kinyara Sugar, represented by their umbrella association - the Uganda Sugar Manufacturers Association, said they were not consulted before Cabinet approved the Sugar Bill.

They claim some provisions in the proposed law were not in their favour and threatened to fight the Bill once it is tabled before Parliament without their input.

In his submission, chairman of Uganda Sugar Manufacturers Association Jim Kabeho told the meeting they do not agree with the provision of establishing a sugar board whose intention is to monitor, and coordinate all activities of the sugar industry.
Mr Kabeho argued that having a sugar board would create more problems than solutions. He said: “The board will instead take long to make decisions,” adding : “The proposed board of 11 members was given a lot of powers with the Ministry of Trade and Industry playing a spectator’s role.”

On the sugar prices, he said the matter should be left to the forces of demand and supply to determine and not any sort of formulae.


Mr Kabehoalso wants a law that will stop competition between big millers and small millers of cane.
In response, Mr Milan Dobaria of G.M Sugar and a member of the small millers accused the big millers of being bullies. He also lashed at the big industry players for stifling their efforts to expand.

Finally, the meeting resolved to amend the proposals in the Sugar Bill, replacing Sugar Board with an Advisory Council of 11 members with a representative from the government, the millers and out-growers.

Ms Kyambadde said after consultingthe First Parliamentary Council, the ministry realised that an 11-member Sugar Board may be expensive and very bureaucratic.

Counting losses
Major sugar manufacturers incurred losses of up to Shs182b in 2015 as a result of limited raw materials. According to Mr Kabeho, Kakira Sugar lost Shs72b, Sugar Corporation of Uganda Limited lost Shs20b and sugar growers lost Shs6b.