By Spy Uganda
Kampala: Leader of Opposition, Joel Ssenyonyi, has questioned the lack of progress at Atiak Sugar Factory, despite a government investment of over Shs553.71 billion.
Ssenyonyi revealed that the factory remains non-operational, with the developments on the ground not reflecting the significant financial input.
Furthermore, he noted that the government is planning to request more funding for the factory.
Ssenyonyi shared these concerns while presenting the report of an oversight visit, he conducted with opposition MPs at Atiak Sugar Factory on October 7, 2024.
He urged the Uganda Development Corporation (UDC) to strengthen its oversight of the factory and called for an investigation into the factory’s dealings.
“The factory is currently not producing any sugar, and this raises concerns given the government’s continued intervention over the years. Management claims the lack of production is due to insufficient sugarcane, despite the significant government investment,” Ssenyonyi said.
He added that while civil and infrastructure development works—such as constructing water reservoirs and irrigation systems—were ongoing, they were behind schedule. Management has indicated that more government funding would be required to complete the irrigation project.
Ssenyonyi further reported that the factory’s 7,900-acre sugarcane plantation was destroyed in a fire in December 2020, which significantly impacted operations. However, the cause of the fire remains unclear.
“Despite the heavy investment by the government, what we saw on the ground doesn’t match the Shs553.71 billion spent. This raises questions about whether this is another ‘white elephant,’” Ssenyonyi remarked.
During the visit, it was revealed that Atiak Sugar Factory had abandoned its original plan of working with farmer cooperatives to plant 60,000 acres of sugarcane. Instead, the factory now manages its own 25,000-acre plantation. Despite being non-operational for years, the factory consumes 200 liters of diesel daily to run turbines, purportedly to prevent machinery from rusting.
“This ongoing expenditure is troubling, especially since there is no production happening. We also noted delays in the delivery of necessary machinery for mechanization, with some equipment lacking the required accessories,” Ssenyonyi added.
The Uganda Development Corporation, tasked with overseeing the factory on behalf of the government, reportedly has little to no presence in its operations.
Ssenyonyi called on the government to convert its preferential shares in Atiak Sugar Factory into ordinary shares, which would increase its negotiating power and influence over the company.
“The government should also conduct a thorough audit to determine whether the factory is viable. Before considering additional funding, the Shs553.71 billion already invested must be fully accounted for,” Ssenyonyi said.
He emphasized the need for improved oversight and transparency from the UDC to ensure the efficient use of public funds and clear performance targets for the factory’s management.
Responding to Ssenyonyi’s concerns, Henry Musasizi, Minister of State for Finance, pledged to issue a formal statement in two weeks.
Parliamentary documents show that between FY 2017/18 and FY 2019/20, the government, through the Uganda Development Corporation (UDC), acquired equity shares worth Shs81 billion in Horyal Investments Holding Company Ltd, the entity behind Atiak Sugar Factory.
In FY 2017/18, the UDC provided two shareholder loans totaling Shs20 billion. Additionally, in FY 2019/20, the government, through NAADS, released Shs54.68 billion to support sugarcane outgrowers in Amuru and Lamwo districts to sustain cane supply to the factory. The government also provided a transport subsidy of Shs16 billion to transport sugarcane from Busoga to Atiak.
Despite this investment, there are concerns over the government’s actual ownership percentage in the factory, as it has continued injecting funds into Horyal Investments. The factory was initially envisioned as a milestone in Northern Uganda’s economic recovery, promising jobs and women’s empowerment by supporting female sugarcane suppliers.
However, Horyal Investments reportedly took on expensive short-term loans to set up the factory and later sought government support to avoid financial collapse, arguing that the project was strategic for the region’s recovery.
