Licenses that were granted to millers after the enforcement of the Sugar Act, 2020 are void, the Deputy Attorney General, Hon. Jackson Kafuuzi has said.
The Sugar Act established the Sugar Board whose mandate among others, is to issue licenses to millers, but the governing body has not been established due to rationalisation of government agencies.
Since the enforcement of the Sugar Act, the Ministry of Trade has licensed five millers including; Tyrol Investments Limited, Kikajo Sugar Limited, Bon Sugar Limited, Modern Agri Sugar limited, Kelon Sugar Limited and Shakti Sugar Limited.
Kafuuzi, together with the Minister of State for Trade, Industry and Cooperatives, Hon. Frederick Ngobi, appeared before the Committee on Tourism, Trade and Industry on Thursday, 30 November 2023 to respond to a petition by Uganda Sugar Manufacturers Association against licensing of new millers.
“In the absence of Sugar Board to enforce the Sugar Act, no person or authority may lawfully issue a license to establish and operate a new sugar mill. We can go backwards and rectify them,” Kafuuzi said.
He added that the lacuna in the current law explains the need for an amendment to establish the Sugar Council.
“It is government officials in Trade Ministry that have acted with good intention but erroneously outside the law and issued licenses. We need to go backwards and correct some of these errors,” he said.
Kafuuzi said that investors have spent and invested millions of dollars, hence the need to avoid loss of funds to those who acted on these erroneous licenses and made investments.
“The Ministry of Trade was under pressure, receiving applications from industrialists and the policy of this government has been to encourage investment. So, they took other measures which I want to say that are not legal but they were taken out of necessity,” he said.
Committee Deputy Chairperson, Hon. Catherine Lamwaka, urged government to fast track amendment of the law, saying that the current vacuum is to blame for the bickering in the Sugar industry.
“I pray we do not get into legal battles with the licensed millers because this is not god. The Committee is ready to process the Bill,” Lamwaka said.
In his justification, Ngobi said that the licenses in question were issued based on consultation with Uganda Investment Authority.
“In absence of the Sugar Board to enforce the Sugar Act 2020, the Ministry in consultation with Uganda Investment Authority provides a letter of ‘no objection’ following a verification of the area and crushing capacity stated in application to the application to the Minister,” he said.
He agreed with the Deputy Attorney General that the proposed amendment will rectify the challenges faced by the sugar millers.
He added that the Ministry will take action against millers who have been in operation for over 10 years without factories, contrary to the Sugar Act.
According to the Act, a miller is expected to set up a factory, three years after acquiring a license, failure of which, a license will be revoked.
“Those millers who got licenses before 2020 and have not established factories are redundant. We shall write to the Attorney General to guide us on next action to take,” he said.
Hon. Richard Gafabusa (NRM, Bwamba County) however raised concern, saying that the Ministry ought to have waited for the law to be amended to issue licenses.
“By the time the law was enacted, Uganda Investment Authority existed but it was not given authority to issue licenses, the Investment Code Act existed but we did not give it the power,” Gafabusa said.
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