The Government has asked Parliament to urgently approve Shs41bn Supplementary budget request to inject in Amina Hersi Moghe’s (in featured photo) Atiak Sugar Factory.
The supplementary request is being considered by the Parliamentary Budget Committee.
It was introduced to Parliament by the Ministry of Finance and the National Agricultural Advisory Services (NAADs).
It is worth noting that after becoming financially distressed, the Somali born business tycoon who owns Oasis Mall in Uganda through Horyal Investment Holding Company Limited sought to have a joint venture with the government to establish a US$50 million sugar factory in Atiak Sub-County, Kilak County, in Amuru District.
Samuel Mugisa, the Executive Director told the Committee that of the money required, Shs10.65bn was provided for in the 2018/2019 budget while the remaining Shs30.47bn remained unfunded.
He said the money is needed urgently because the dry season in Northern Uganda begins in October and it would be prudent to begin planting in the rain first season.
According to documents tabled before the Committee, Shs6.15bn is required for land preparation. This includes ploughing, harrowing and ridging.
The planting of sugarcane will cost Shs1.08bn while the purchase of planting materials will cost Shs6.23bn.
Taxpayers will also foot bills for buying herbicides for the investor to a tune of Shs975M while manual weeding will cost Shs2.33bn.
Mechanical weeding will cost Shs270M and fertilizers will cost Shs2.27bn.
However, a section of MPs have questioned the motive behind Government’s interest in this particular investor.
Patrick Isiagi, the Kachumbala County MP questioned why taxpayers should foot the cost of ploughing and buying planting materials.
“But if you are just going to put money for the sake; who is that Ugandan who sits there; you plough a garden for him until you put fertilizers, you harvest, you sell, then money goes to him, who is that lucky Ugandan? Are you not encouraging laziness?”
Ann Maria Nakabirwa, the Kyankwanzi Woman described the move as discriminatory and tasked NAADs to explain why the money is urgent for it to come to Parliament as a supplementary.
She argued; “We are talking of issues of equity and fairness; isn’t this discriminatory? We have gone, treated, we want to give seeds, weeding, we want to plough for the same people and they are shareholders who will also earn dividends and even harvest for them, if at all that is the scope the whole country is taking elsewhere, I wouldn’t mind.”
Nankabirwa added that if this is the trend that Government is taking, it needs to cut across other players in the sugar industry and have an end to discriminatory tendencies.
“We want to understand the urgency of this being in the supplementary budget. Is it useable? Is it something that can’t wait and we study and fix it in the budget because we are already in the process,” said Nankabirwa.
Background
The decision by government to invest in the company was reached at after a meeting on the July6, 2017 between Horyal Investment Holding Company Limited. Chaired by President Yoweri Museveni, government agreed to acquire equity in the company at US$5.2m.
The payback period for this loan is expected to mature in seven years.
In 2018, MPs sitting on the Budget Committee noted that government used bad negotiators for this investment to have only 10% shareholding which could have been more since this company is in financial distress, with heavy debts from a number financial institutions including dfcu.
Atiak sugar factory is expected to employ over 3000 Ugandans and its by-products produce 6MW of electricity in phase1.
