Cabinet to decide fate for two sugar factories which were stopped due to operational issues
President Yoweri Kaguta Museveni has announced that the government will purchase the Mayuge Sugar Factory for Busoga sugarcane farmers.
The President made the announcement on Wednesday August 6, 2025, while meeting sugarcane growers, millers, and sugar manufacturers from across Uganda at Kityerera State Lodge, Mayuge.
The move is in fulfilment of the government’s pledge to build a sugarcane processing plant for Busoga sugarcane farmers.
During the meeting, the farmers gave the government a green light to go into purchase negotiations with the sugar factory.
The new ownership model is expected to restore fairness in the sugar industry and ensure that profits return directly to the farmers.
“I pledged to build a sugar factory for you. Recently, the people of Mayuge Sugar Factory came and wanted to sell it to me and give it to the poor people. Do you agree?” President Museveni asked, receiving a resounding “Yes!” from the farmers.
“Okay, we shall negotiate with them and buy it for you,” the President assured.
The meeting brought together key stakeholders from Uganda’s major sugarcane growing regions — Busoga, Buganda, Western, and Northern Uganda — and is part of President Museveni’s wider agenda to reform the agro-industrial sector and uplift communities from poverty.
In the same meeting, President Museveni revealed that the cabinet will decide the fate of CN Sugar Ltd and Shakti Sugar limited which were closed due operational issues. He said the issue should be handled next week on Monday.
On the other hand, President Museveni directed the Minister for Trade, Industry and Cooperatives, Hon. Francis Mwebesa, to ensure the long-awaited Sugar Council is established in accordance with the Sugarcane (Amendment) Act, 2023, passed by Parliament in April, 2025. He ordered that the names of the council members should be confirmed by next week.
The council is expected to regulate the industry and represent the interests of growers and millers alike.
The council will consist of a chairperson, four representatives of sugarcane out-growers, four from sugar millers, and Permanent Secretaries from the Ministries of Agriculture, Finance, and Trade.
During the same meeting, Mr. Budugo Isa, Chairperson of the Uganda National Association of Sugarcane Growers, expressed concern over the continued deduction of a 5% levy from farmers delivering sugarcane to factories, a cost management charge that was supposed to be scrapped under the new law.
“We had hope in this council, but the Ministry of Trade is taking too long to implement it,” Mr. Budugo lamented.
President Museveni responded firmly, directing that the charge should stop and urged the sugar manufacturers to reject sugarcane deliveries that are mixed with husks and tops, which degrade processing efficiency.
“Can we now agree? Reject the unclean sugarcane,” President Museveni said. “And the 5% charge must stop.”
Minister Mwebesa pledged to enact new regulations in line with the President’s directive. He also disclosed that the government has secured funds to compensate suppliers of the Atiak Sugar Factory, and the payments would be effected next week.
Delving into Uganda’s historical struggles with poverty, President Museveni shared personal insights on wealth creation, the challenges of land fragmentation, and the transformation of traditional communities.
“The idea of transformation was not clear in the 1960s. Some people believed that poverty must exist — that some be rich while others stay poor. I refused that logic,” he said.
“When I went to school, I compared traditional systems with capitalist economies and saw how industrial revolutions changed societies,” he added.
H.E. Museveni said his early efforts in the cattle corridor focused on ending nomadic lifestyles, promoting food production, and introducing income-generating activities. However, the long years of war against Idi Amin disrupted economic progress and led to further land fragmentation, weakening household incomes.
Who should grow sugarcane?
The President gave a detailed economic analysis of sugarcane production, noting that the average returns — UGX 4 million per acre annually — are insufficient for families with small land holdings.
“Sugarcane should be grown by people with large chunks of land. Those with 2 acres will never get out of poverty with sugarcane, let’s be clear. You, the sugarcane growers, must agree on the minimum land size for one to engage in sugarcane farming,” H.E. Museveni said
He contrasted the income from sugarcane with alternative models, recommending the four acres model for smallholder farmers. This includes growing food crops, coffee, pasture, and engaging in livestock, poultry, fish farming, or piggery.
President Museveni highlighted the case of Joseph Ijara of Serere, who uses only 2.5 acres to generate over UGX 1 billion annually through poultry and zero-grazing dairy farming.
“Ijara sells 310 eggs a day and 320 liters of milk daily. That’s what I have been talking about for years,” the President emphasized. “Another farmer, Nyakana, earns UGX 300,000 daily from eggs — that’s UGX 108 million a year.”
He urged communities to adopt evidence-based agricultural choices based on land size, advising those with smaller plots to avoid sugarcane and instead focus on more profitable, intensive models.
The President also discussed cotton farming, noting that returns are too low for smallholders. He cited large-scale models as viable, recommending prisons and institutions with large landholdings to take on cotton cultivation to support the country’s textile industry.
“If you have 1,000 acres, you get UGX 1 billion from cotton. But smallholders with just two acres should avoid it,” Museveni said.
To further support sugarcane growers, President Museveni pledged a revolving fund to help them buy fertilizers, aimed at boosting sugarcane productivity per acre.
Mr. Budugo also welcomed the President’s commitment, thanking him for promising the factory acquisition, fertilizers, tractors, and halting the controversial trashing of sugarcane tops. He noted that the tops are a valuable animal feed, feeding up to three cows per acre.
The Third Deputy Prime Minister, Rt. Hon. Rukia Nakadama Isanga, welcomed the President to Mayuge and assured him of Busoga’s support in the forthcoming 2026 elections.
“This time, the Basoga want to campaign for you themselves. They don’t want outsiders coming in to speak for you without understanding our local issues,” she said.
Hajji Idi Isabirye, the Bunya South MP and Chairperson of the Busoga Parliamentary Caucus, thanked the President for addressing key challenges, including sugarcane pricing and swamp reclamation. He also praised the transformation around Mayuge State Lodge, calling it an inspiration for locals.
The event was attended by senior government officials, Members of Parliament, former leaders, among others.
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