UGANDA, Amuru | Real Muloodi News | The State Minister for Finance, Henry Musasizi, has urged Members of Parliament to support the USh274.1b supplementary budget for the Atiak Sugar Factory.
The factory, which is owned by tycoon Amina Hersi Moghe, is the only sugar factory in Northern Uganda and is a national strategic investment.
“There are sugar factories in the Central, Eastern and Western regions. Atiak Sugar Factory is the only sugar factory in Northern Uganda. The factory will support the sugar cane out growers as well as tap into the DRC and South Sudan markets,” Musasizi said.
The government’s intervention is in line with the government’s industrialisation policy and commitment to balanced regional development and equity.
The Atiak Sugar Factory started operations in October 2020, but it did not see a smooth take-off from the onset as expected.
The committee reported that the company was faced with a host of challenges arising from a disintegrated and piecemeal approach to the planning and implementation.
MPs have expressed concerns about the government’s huge investments in the company, with risks increasing, and no sugar being produced as expected.
MPs are worried that the government’s expenditure through Uganda Development Corporation and NAADS in Atiak Sugar to date stands at USh563.22b, while the private investor has only contributed USh121b.
The budget committee argues that since the government has invested much more in the factory than the private investor, it does not make economic sense for the private investor to be the factory’s majority shareholder (60% shares) and leave the government as the minority shareholder with 40% shares.
The supplementary budget for Atiak was part of the funds that were already released before securing Parliamentary approval, as the Public Finance Management Act allows the government to spend up to 3% of the national budget as a supplementary budget before getting Parliamentary approval.
Deputy Speaker Thomas Tayebwa has told MPs it would be a waste of time for Parliament to reject the supplementary since they already gave the executive powers to spend up to 3% of the national budget before seeking Parliamentary approval.
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