No Sugar Produced by Atiak Factory Despite Shs 553 Gov’t Investment – Ssenyonyi :Uganda
Uganda’s Leader of the Opposition, Joel Ssenyonyi, has criticized the Atiak Sugar Factory for not producing sugar despite the government investing Shs 553.71 billion since its launch in 2020. Following an oversight visit, he noted the factory has been idle since April 2022 due to a sugarcane shortage, raising concerns about financial mismanagement and the effectiveness of the investment.
Amuru, Uganda – October 2024 – Uganda’s Leader of the Opposition, Joel Ssenyonyi, has raised concerns about the lack of sugar production at Atiak Sugar Factory, despite the government’s investment of Shs 553.71 billion in the venture.
Ssenyonyi made the remarks following an oversight visit by the Shadow Cabinet to the factory in Amuru District on October 7, 2024, to assess its performance and economic impact on the region.
The factory, launched in 2020, was seen as a flagship project aimed at revitalizing the economy of Northern Uganda, providing jobs, and fostering local development in post-conflict areas.
However, Ssenyonyi revealed that the factory has been non-operational since April 2022 due to a chronic shortage of sugarcane, rendering the government’s substantial financial commitment fruitless.
“Despite the government’s intervention and massive financial support, the factory has not produced any sugar,” Ssenyonyi noted in his statement.
This discovery has sparked concerns over whether the investment has been wasted, as the factory remains idle with little to show for the funds injected.
Atiak Sugar Factory, initially a private-community partnership spearheaded by Horyal Investments Holding Company Limited, was launched to process sugarcane into sugar and its by-products, with the land provided by the local people of Northern Uganda.
The factory was supposed to bring significant economic benefits, including job creation and women’s empowerment through their involvement as sugarcane suppliers.
However, due to financial difficulties stemming from high-interest loans, Horyal sought government intervention.
The government, through the Uganda Development Corporation (UDC), stepped in between 2017 and 2023, progressively purchasing equity shares worth Shs 81 billion and providing additional funds for the factory’s completion.
These included Shs 54.68 billion through the National Agricultural Advisory Services (NAADS) to support outgrowers, Shs 108 billion in 2021 for mechanization, and another Shs 274.1 billion in 2022 for preferential shares.
Red Flags
Despite the significant investment, Ssenyonyi’s visit confirmed that the factory has not produced any sugar since its closure in 2022. The factory’s management cited the unavailability of sugarcane as the primary reason for halting production.
The initial plan to plant 60,000 acres of sugarcane through a farmer cooperative model has since been abandoned, with the factory now relying on its own 25,000 acres of plantation in Atiak.
Further compounding the issue is the discovery that the factory continues to incur daily operational costs despite being non-operational.
“The factory spends 200 liters of diesel every day to run turbines and prevent the machinery from rusting and malfunctioning,” Ssenyonyi revealed.
This ongoing expenditure, coupled with a lack of production, raises concerns about financial mismanagement and the long-term viability of the project.
The oversight team also found that critical infrastructure development at the factory, such as water reservoirs and irrigation systems, remains incomplete. The delayed delivery of essential equipment has further stalled the factory’s mechanization efforts, with many of the necessary machines either missing or incomplete.
Government’s Stake in Question
Ssenyonyi also questioned the transparency surrounding the government’s stake in the company.
Despite the ongoing financial support, it is unclear what percentage of shares the government currently holds in the company, given the continuous injection of funds since the acquisition of equity shares.
“What is on the ground is not commensurate with the investment made,” Ssenyonyi stated, underscoring the need for greater accountability.
The oversight visit also revealed that the Uganda Development Corporation (UDC), the government body responsible for overseeing the project, has limited involvement in the factory’s day-to-day operations.
Additionally, the management disclosed that a fire in December 2020 destroyed 7,900 acres of the factory’s sugarcane plantation, further affecting production, though the cause of the fire remains unclear.
Ssenyonyi called for urgent action to address the issues plaguing Atiak Sugar Factory, starting with a comprehensive audit of the company.
“Before any more funds are allocated, the Shs 553.71 billion already invested must be fully accounted for,” he emphasized.
He also recommended that the government convert its preferential shares into ordinary shares to strengthen its decision-making power within the company.
In conclusion, while the Atiak Sugar Factory was meant to play a pivotal role in Northern Uganda’s economic recovery, its failure to produce any sugar despite massive government investment raises serious questions about the management and viability of the project.
The opposition leader urged the government to ensure that taxpayers’ money is not wasted and that the factory delivers on its promises of economic growth and development.
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