Nabbanja Orders CN Sugar Factory License: Namayingo Plant Approved

• Prime Minister Robinah Nabbanja has directed the Ministry of Trade, Industry and Cooperatives to immediately issue a production license to CN Sugar Company for its Namayingo factory.
• This directive follows instructions from President Yoweri Museveni and aims to end a three-year delay for the company, which claims to have met all licensing requirements.
• The Ministry had previously delayed the license, citing a policy requiring sugar millers to source at least 50% of their cane from their own nucleus estate to prevent poaching.
• Other industry players, like Bugiri Sugar Company, expressed concerns about potential cane poaching from their out-growers.
• The Prime Minister has ordered the Ministry of Trade, Industry and Cooperatives to develop new guidelines to regulate cane sharing among millers in the Busoga sub-region to prevent future conflicts.

This move signals a potential shift in Uganda's sugar industry licensing approach, with political intervention overriding ministerial policy interpretations, and suggests that new compliance obligations related to cane sharing will emerge for industry stakeholders.

Prime Minister Robinah Nabbanja has issued a direct order to the Ministry of Trade, Industry and Cooperatives, mandating the immediate issuance of a production license to CN Sugar Company. This directive will enable the company to commence sugar production operations in Namayingo District. The Prime Minister's intervention follows specific instructions from President Yoweri Museveni, who tasked her with resolving the licensing impasse and ensuring the company could begin its activities. The significant directive was delivered during a high-level meeting held at the Prime Minister's Office in Kampala, which included the presence of Minister of Trade, Industry and Cooperatives, Sanjay Tanna, and State Minister for Industry, David Bahati.

CN Sugar Company received authorization from the Government of Uganda in 2022 to establish a sugar processing facility in Namayingo. Despite making substantial investments in machinery and securing land for its own nucleus estate, the company's proprietors have faced a prolonged three-year wait for the necessary production license from the Ministry of Trade, Industry and Cooperatives. This delay has significantly hampered their operations and resulted in considerable financial losses, according to company representatives who assert they have fulfilled all licensing prerequisites. The local community, represented by the Namayingo District Chairperson, has warmly welcomed the Prime Minister's decision, anticipating that the new factory will generate much-needed employment opportunities and provide a reliable market for local farmers.

The delay in granting the CN Sugar Company production license was a central point of discussion during the Prime Minister's meeting with Minister Tanna and Minister Bahati. Minister Tanna explained that the Ministry of Trade, Industry and Cooperatives had been rigorously enforcing an established Uganda sugar factory licensing policy. This policy stipulates that sugar millers must cultivate at least 50 percent of their cane from their own nucleus estate before being licensed, a measure designed to curb the practice of cane poaching from other factories. However, Prime Minister Nabbanja underscored that CN Sugar had indeed met this crucial condition by establishing its own plantation, thereby justifying her directive for immediate licensing.

Minister Bahati, while acknowledging the Prime Minister's directive which stemmed from presidential guidance, affirmed the Ministry's commitment to compliance. He also stressed the importance of ensuring that the CN Sugar Company adheres to existing regulations, particularly in preventing cane poaching within the Busoga sub-region. This highlights a tension between established ministerial policy interpretations and a direct political intervention aimed at facilitating investment and production.

The Prime Minister's directive, while welcomed by CN Sugar and local leaders, was not without contention from other industry players. Representatives from Bugiri Sugar Company, who were also present at the Kampala meeting, voiced their opposition to the immediate licensing. They urged that strict conditions be imposed on CN Sugar to prevent it from sourcing sugarcane from their already registered out-growers, emphasizing that the new factory should rely exclusively on its own nucleus estate. This concern underscores the competitive landscape and potential for conflict over raw materials in the Busoga sub-region.

In response to these industry anxieties and to mitigate future disputes, Prime Minister Nabbanja announced that the Ministry of Trade, Industry and Cooperatives would be tasked with developing clear guidelines. These new guidelines are intended to regulate cane sharing among sugar millers, aiming to prevent conflicts and foster a more structured environment for sugar production in the Busoga sub-region. This move signals a potential shift in Uganda's sugar industry licensing approach, with political intervention overriding ministerial policy interpretations, and suggests that new compliance obligations related to cane sharing will emerge for industry stakeholders.

This directive indicates a potential shift in Uganda's sugar industry licensing approach, with political intervention overriding ministerial policy interpretations. Lawyers and compliance officers in the sector should closely monitor the promised development of new guidelines on cane sharing to understand future compliance obligations and mitigate inter-miller conflicts.

Source: Original reporting via Nile Post