Amuru Sugar Works: What is in it for Uganda?

Saturday January 24 2015

President Museveni (in hat) inspects part of the land i

President Museveni (in hat) inspects part of the land in Amuru District, proposed to be given to Madhvani Group to grow sugarcane. PPU PHOTO  

By Nelson Wesonga

Amuru- State House last week said the Lamogi, a community in Amuru in northern Uganda, would withdraw their petition against Amuru Sugar Works Limited (ASWL).

Once formally withdrawn, this will pave way for the Madhvani Group to set up a sugarcane factory and plantation in Amuru District.

ASWL will nestle on 40,000 hectares of which 20,000 will be a nucleus estate for the factory whereas the rest will be, supposedly, rented out by the group to sugarcane outgrowers.

The estimated cost of the project is $100 million (approximately Shs290 billion).

Mr Gabriel Ajedra, the State Minister for Investment, told Daily Monitor on January 15 that government’s “contribution will be in terms of acquisition of land”.

Madhvani Group director of corporate affairs P. K Eswar refused to comment when this newspaper sought his comment on Wednesday.

But the receptionist at the group’s Kampala office said they are just “spectators”.

Jobs for Ugandans
Through a 2012 article, Mr Mayur Madhvani, a director in the group, said the factory will create 8,000 jobs, among many other benefits.

Further, it will guarantee 7,000 outgrowers a market and stable prices, for the sugarcane.

“The cane payment will translate into enormous development within 100 km of the factory and will improve livelihood of individuals in Amuru,” Mr Mayur said in the article.

Mr Ajedra said the plant will boost Uganda’s sugar cane production, which, when exported, will earn Uganda foreign exchange and boost its foreign reserves.

ASWL will use sugarcane waste to generate and supply electricity to the national grid, and mitigate power rationing that might result from unmet demand outstripping supply.

Prof Ogenga Latigo, a former Member of Parliament (MP) of Agago, adds the plant “will bring auxiliary services, such as banking, to the area”.

More roads will be opened in the area, which will enhance transport.

The roads are currently decrepit because the 20–year Lord’s Resistance Army insurgency put on hold such infrastructural projects.

Why pick Amuru over other districts?
Mr Mayur argued in his article that after examining various areas in Uganda, “it was found that the land located in Amuru District, south of Zoka Forest, had no inhabitants”.

Some observers say the land was vacant not because there are no people in the area but because many had fled the villages in fear of abduction by the Lord’s Resistance Army rebels.

While they were away, the prevailing conditions dictated that the land lies fallow.
In 2006, many internally displaced persons started to return to their homes.

Oil rumours
There is a school of thought government could have zeroed on the Amuru land because it neighbhours Nwoya, where oil has been found.

However, no oil company has asked for a license to explore the area for oil.

Residents willing to give land
Mr Gilbert Olanya, the Member of Parliament of Kilak, where ASWL will be located, says the residents are not, per se, against the project.

But they are against the Madhavani group relying on State House to secure the land for the group.
“Let the investor come and negotiate with the landowners. We might say the landowners should be given shares in the company,” Olanya says.

However, Prof Latigo says it would be hard to negotiate with each resident.
“That is not what happens in the world; it will not happen in Acholi. No investor will talk to every household,” he says.

Prof Latigo says God endowed the region with vast land and “if not used for the benefit of His people, He will blame us”.

What is at stake?

According to a report titled, “The Quest for Development Through Dispossession: Examining Amuru Sugar Works in Lakang–Amuru District of Northern Uganda” by Eria Serwajja (2012), land rights, among others, are at stake.

“The allocation of the land to the group could be equated to giving away the cultural rights and disorientation of the identity of local communities,” the report says.

“This scenario is likely to create a landless community or a new set of land grab related to IDPs in northern Uganda.”

It adds that the streams such as Achwa, Ome and Apaa that pass through Lakang village have for long been a source of fish for the local people.

“Since the land will become private property, the women are likely to find difficulty in accessing the resources,” it says.

One can infer the other potential risks, associated with such land acquisitions, by reading the “African Agriculture: From Meeting Needs To Creating Wealth Report”.

The risks include threats to water resources from intensive agricultural production.

The report says the lack of transparency in the negotiations can foster corruption and that bargaining power is often on the side of the foreign companies especially when supported by the host state or local elites.

Other land giveaways
The Amuru, land giveaway is, however, not the first. It might not even be the last.

In August 2014, government said it would give 17,000 hectares in Masaka District to Chinese investors to carry out commercial agriculture.

Earlier, it had given Bidco Oil Uganda 6, 100 hectares in Kalangala Disrict to cultivate oil palm.

In 2011, the First Lady reportedly requested the Napak District leaders to allocate land to private commercial farmers.

The local leaders refused, saying it was a ploy to grab the areas vast land.

Government has a policy to give land to companies or individuals who can invest more than $100,000 (Shs290 million) in a particular project.

The policy is meant to spur Uganda’s industrialisation by 2040 in order to even Uganda’s balance of payments and to create more job opportunities to absorb the labour force.

Industrialisation would help to move Uganda from the rungs of low–income to middle–income, whose consumption patterns impact on economic growth.

In case an investor who got such land fails to develop it within 18 months, the government ‘takes it back’. This is done to discourage speculators from getting free land.

According to Mr Mayur’s 2012 article, the project will be a joint venture between the group and the government, which will hold shares at the initial stage on behalf of the public and the people of Amuru.

In 2007, Amuru District allocated the Madhavani Group 40, 000 hectares in Lakang village to establish a sugarcane factory.
This prompted five opinion leaders from the area to petition the High Court in Gulu to halt the implementation of the project on the land.

They said the land on which the government wants to establish ASWL is customary land, and, thus, the local people had to consent to its change of use.

However, the court in 2012 dismissed the petition by the five Ms Concy Aciro, the Woman Representative of Amuru District, Mr Michael Ocula, the Member of Parliament of Kilak County, Mr David Ocheng Penytoo of Gulu Municipality, Mr Zachaeus Uma and Mr Jackson Obalim.

The court in ruled that the land in question is public.

That meant it belongs to the government and that the district local government was within its rights to lease the land to whomever.

However, the community’s leaders insist the land is communally owned.

The five petitioned the Constitional Court to overturn the high court’s ruling, a case that is still pending since the petitioners are yet to formally withdraw the petition.

On January 13, State House announced that the community had agreed to withdraw the petition .