UGANDA, Amuru | Real Muloodi News | The Budget Committee has rejected a supplementary budget request of USh 108 billion in additional funding to Atiak Sugar factory in Amuru.
According to the Members of Parliament, the government has already invested in the company, and has not seen any growth.
The Executive Director of Uganda Development Cooperation (UDC), Patrick Birungi, explained to the Budget Committee that there is no sugarcane to kick start production, therefore the multi-billion factory is lying idle. He says the Shs108Bn would be channeled towards mechanization to steer sugarcane production.
However, Mwine Mpaka, the Mbarara South MP argued against approving the supplementary funding, revealing to the Committee that Clause 5 of the Shareholder’s agreement states that the day to day controls of the company shall be managed by an experienced and independent firm, not individuals. Yet, despite this clause, the CEO, Amina Hersi Moghe, is a board member and the operations manager. Her son is a shareholder, board member and chairperson of the audits committee. Mwine Mpaka spoke against approving the supplementary funding to the factory until these governance issues were addressed.
Current factory ownership includes the CEO Amina Moghe, who owns 60% of the shares and has invested USh 119 billion into the factory.
The government owns the remaining 40%, for which it paid 81 billion shillings as share capital. In addition, government contributed a further USh 75.1 billion into the factory as non-equity. With the additional 108 billion being sought, the total government capital contributions would amount to 264 billion shillings, if approved.
The National Agricultural Advisory Services (NAADs) also invested USh 64.4 billion for 60,000 acres of land, but the factory has only been able to secure 12,000 acres.
Paul Omara, the Otuke County MP, requested that the committee order a financial audit into the sugar factory to establish how Amina has used the over 150 billion shillings she has already received from government before more money can be approved.
Minister of State for Industry, David Bahati, implored the committee to consider the supplementary funding request, and to give government three months to fix the governance issues raised.
However, However, Patrick Isiagi, the chair of the committee and Kachumbala County MP, was not convinced. He said parliament will only consider the supplementary request after the governance and financials of the company are fixed.
The MPs say that until businesswoman Amina Hersi Moghe proves her contribution to the investment, they will not approve additional funding.
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