Uganda signs into law the Sugar Act 2020 as export deal to Tanzania is finalized

UGANDA – Uganda’s President, Yoweri Museveni has signed into law the Sugar Act 2020 that will govern the country’s sugar sector.

“In order to streamline the management of the sugar industry growers, out-growers, millers, out-grower associations and other relevant parties shall enter into agreements in this Act referred to as “sugar industry agreements”, which shall set out the respective rights, duties and obligations,” the Act states.

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The Act also addresses pricing of sugarcane through a formula based on weight of the sugar cane multiplied by rendement (tonnes of sugar made out of every 100 tonnes of sugarcane) multiplied by a percentage negotiated by the different parties.

However, Sugar producers say the law has ignored some issues that were set forth such as zoning of the sugarcane producing areas.

Major players in the industry had claimed that the exclusion zones were necessary to prevent poaching of cane from out-growers by rival factories, but parliament said the move was being pushed to kill competition.

While rejecting the Bill last year, President Museveni had reasoned that not everyone, for instance people with about six acres of land, should be involved in sugarcane growing, noting it should be left to large scale farmers.

In the Bill government had proposed zoning of 25 kilometers, which would essentially not allow establishment of a sugar mill within such a distance as well as proposing that out growers in particular areas should only supply cane to mills within that area.

However, Members of Parliament, especially from the Busoga sub-region rejected the proposals, arguing that small scale farmers cannot be left out as long as they can find factories where they can sell their cane.

Last week the Bill was gazetted into an Act after the President had signed it.

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The new Act is said to be silent about out-growers and other controversial issues. These will be handled by the new Uganda Sugar Board, which will be responsible for licensing of industry players.

Exports to Tanzania

The signing comes at a time when the President has made final deliberations for Uganda to export sugar to neighbouring countries such as Tanzania.

Tanzania had previously locked out Uganda’s sugar on claims that dealers where dumping cheap sugar on its market.

Uganda and Tanzania have been involved in months of negotiations since last year.

According to the Minister of Trade Amelia Kyambadde, Uganda has the capacity to export about 48,000 tonnes to Tanzania alone.

“There is a shortage of sugar in Tanzania … they have accepted to partner with us to export our sugar,” she said.

Uganda, according to Ms Kyambadde has about 11 functional sugar mills producing about 510,000 tonnes.

Local consumption stands at about 360,000 tonnes per annum with a surplus of about 150,000 tonnes, which is sufficient enough for export.

The first consignment is to be delivered by the end of this month, following a meeting between President Museveni and representatives from Tanzania led by the managing director of Kagera Sugar Ltd, Seif Ally Seif.

The two countries agreed that Lake Victoria’s Port Bell to Mwanza will be the transportation route as it is safer and cheaper.

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