President Yoweri Museveni has tasked the Prime Minister, Dr Ruhakana Rugunda to explain who approved the establishment of a so-called ‘sugar bond’ in Uganda which according to him is stockpiling imported sugar for export to neighbouring countries.
In the strong toned letter to the Prime Minister, Museveni asks the motive behind the facility, the proprietors and who approved it.
“Amazingly, I have been informed that some genius authorized the existence of a so called ‘Sugar Bond’ in Kampala,” wrote the President.
He says the concern was raised by neighboring countries with the East African Community (EAC) which have expressed skepticism as to whether the sugar Uganda is exporting to their jurisdictions is actually from Uganda or imported through the so-called sugar bond.
Museveni in the same letter wonders why Uganda which has an installed capacity of 550,000 tonnes and the only East African country with surplus sugar of about 80,000 tonnes per annum would be importing subsidized sugar from countries like Brazil.
According to the August 19 letter, the sugar stockpiled in the ‘sugar bond’ is meant to be exported to destinations like DRC and South Sudan.
“The question is – who allowed the sugar bond to be established? I really demand to know,” Museveni asked Rugunda.
“Was a paper brought to Cabinet to allow a self-undermining policy of being the promoters of imported sugar while our own sugar industry was recovering?” he went on to inquire.
Accordingly, the President directed Rugunda to work with the Attorney General to ensure that this sugar bond is closed and never to be reopened again.
Earlier this year, sugar prices in Uganda significantly dropped to as low as Shs 2,760 per kilogram and according to the Minister for Trade, Amelia Kyambadde, it was attributed to the smuggling of sugar into the country.
At the time, she told Parliament that smugglers were sneaking duty free sugar into Uganda through illegal routes and repackaging it in branded bags of Kakira, Kinyara and Lugazi sugar making it difficult for URA to seize it.
Importation of duty free sugar from countries outside the EAC or Africa is retrogressive to the economic integration agenda, particularly the harmonized levies on certain products entering the region, an effort meant to protect local producers from unfair competition.