MPs reject UGX108Bn additional funding to Atiak sugar factory

KAMPALA, UGANDA: The Budget Committee has rejected a consideration of a supplementary budget request worth 108 billion shillings as additional funding to Atiak sugar factory in Amuru district.

The MPs say government has heavily invested in the company and yet the shares remain stagnant. They say that until businesswoman Amina Hersi Moghe proves her contribution to the investment, they will not provide the funding.

Minister of State for Industry, David Bahati had led the team from the Ministry of Trade and officials from Uganda Development Corporation (UDC) to defend the supplementary request for additional funding to the sugar factory.

Patrick Birungi, the Executive Director of Uganda Development Cooperation (UDC) told the Budget Committee that the multi-billion factory is lying idle because there is no sugarcane to kick start production and the Shs108Bn would be channeled towards mechanization to steer sugarcane production.

However, Mwine Mpaka, the Mbarara South MP warned the committee against approving the supplementary funding revealing that although Clause 5 of the Shareholders agreements states that the day to day controls of the company shall be managed by an experienced and independent firm and not individuals, she Amina is the CEO, operations manager and board member, while her son is a shareholder, board member, and chairperson audits committee with no proper management.

Information before the committee indicates that Uganda paid 81 billion shillings as share capital for the 40% shares, while another 75.1 billion shillings was sunk into the factory as non-equity and the factory is seeking for 108 billion that would bring total capital injected in the factory to 263 billion shillings.

Moghe who owns 60% shares has injected 119 billion shillings. The National Agricultural Advisory Services (NAADs) also injected 64.6 billion for clearance of 60,000 acres of land, but the entity has only been able to secure 12,000 acres.

Maxwel Akora  the Maruzi County MP tasked UDC to explain whether the additional 108 billion shillings is a loan or it is intended to increase share capital of government.

Paul Omara, the Otuke County MP asked the committee to order for a financial audit into Atiak sugar factory and establish how Amina has used the over 120 billion shillings she has got from government before more money can be approved.

Minister David Bahati pleaded with the committee to consider the supplementary and give government three months to fix the governance issues at Atiak sugar factory.

However, Patrick Isiagi, the chair of the committee and Kachumbala County MP castigated UDC and Minister Bahati for allowing taxpayers money go to waste. He said parliament will only consider the supplementary request if the governance and financials of the company are fixed.

This is not the first time Parliament is protesting investment into Atiak sugar factory, MPs on the budget committee of the 10th Parliament rejected the proposal, but funds ended up being approved.