The new Act is silent about out-growers and other controversial issues.
Uganda’s President Yoweri Museveni has signed into law the Sugar Act 2020, ending a four-year back and forth between the executive and legislature.
The president initially refused to assent to the Bill and sent it back to parliament, highlighting areas of contention including creation of an exclusion zone of a 25-kilometre radius for sugar factories.
Major players in the industry had claimed that the exclusion zones were necessary to prevent poaching of cane from out-growers by rival factories, but parliament said the move was being pushed to kill competition.
Parliament returned the Bill unchanged earlier this year.
The new Act is silent about out-growers and other controversial issues. These will be handled by the new Uganda Sugar Board, which will be responsible for licensing of industry players.
Pricing
The Act also addresses pricing of sugarcane through a formula based on weight of the sugar cane multiplied by rendement (tonnes of sugar made out of every 100 tonnes of sugarcane) multiplied by a percentage negotiated by the different parties.
“In order to streamline the management of the sugar industry growers, out-growers, millers, out-grower associations and other relevant parties shall enter into agreements in this Act referred to as “sugar industry agreements”, which shall set out the respective rights, duties and obligations,” the Act states.
On Tuesday, the government issued a statement announcing the president’s assent, and an agreement to sell surplus sugar to Tanzania.
The first consignment is to be delivered by the end of this month, following a meeting between President Museveni and representatives from Tanzania led by the managing director of Kagera Sugar Ltd, Seif Ally Seif.
According to Uganda’s Minister of Trade and Industry Amelia Kyambadde, the deal will bring relief to Ugandan millers who have been trying to penetrate the Tanzanian market for a long time.
“Uganda has a surplus of 48,000 tonnes of sugar, which will help Tanzania with its current shortage,” said Ms Kyambadde.
The two countries agreed that Lake Victoria’s Port Bell to Mwanza will be the transportation route as it is safer and cheaper.