TWENTY YEARS AFTER MOBILE PHONES CAME TO UGANDA

In the wake of all the brouhaha about SIM cards, my mind raced back 20 years to when the mobile phone really took off in Uganda.

It’s true that mobile phones first emerged in Uganda in 1994 with Celtel, but it really became a necessity rather than a luxury in 1998 when South African based MTN set foot in this town.

There are a lot of things that happened then that most would find hard to wrap their minds around.

Can you imagine that airtime used to be billed in dollars? And that there was something called a service charge -- $10, which was charged weekly? If you didn’t renew it, your phone would go dead – you couldn’t receive or make calls.

Can you imagine that for the longest time you could only buy airtime from the Celtel office on Wampewo Avenue? And this was only from Monday to Friday, excluding public holidays. So if you run out of airtime on Friday evening you were doomed till Monday morning. There was no Me2You. Can you believe the lowest denomination of airtime available was sh10,000?

Even I would find it hard to believe if I had not witnessed it for myself.

That mobile phones are now ubiquitous is thanks to MTN, whose story is an interesting one and one which maps quite well, the changes and changed perceptions around mobile phones in this country.

It all started with local businessman Charles Mbire trooping down to MTN offices in South Africa to make a pitch for the company to come to Uganda. At that time MTN was only in South Africa, content to be a small fish in a big pond. Vodacom was and still is the gorilla in that market.

"The MTN strategists referring to donor statistics – The World Bank reports that our per capita GDP in 1997 was $287, didn’t think Uganda was a good mobile phone market...

But Mbire put his money where his mouth was --- all of $2m, and offered to partner in the venture. Which made them think if a local businessman was willing to take the risk they needed to take a second look.

They eventually came and bid for the Second Network Operator (SNO) License, which they won. As part of the conditions of the license they were required to have rolled out (we were still thinking in terms of physical lines) 89,000 lines in five years.

Today, MTN Uganda reports that it has just under 11 million subscribers but at that time the total number of lines in Uganda stood at 50,000 lines! Or that in 35 years of independence Uganda Posts & Telecommunications (UPTL) as it was called then, had managed to roll out about 1,500 lines a year.

So we thought they were setting MTN up for failure. How would they roll out in five years what the mighty UPTL couldn’t do in three decades?

Well, on day one in November 1998 MTN opened shop. And their main switch promptly collapsed.

The story goes that the 14,000 line switch installed at Mbuya, which was thought would be more than adequate for at least the first three months, crashed under the weight of the new demand. And this was before noon.

And what was the price of SIM card? Sh70,000!!

Long and short of it, Ugandans snapped up those lines like nsenene on a November evening and the 89,000 target was surpassed before the year was done....

A lot has gone on since then that to sum it up with the cliché “and the rest is history” is to seriously short change the story.

Since that first day we started paying our phone bills in Uganda shillings, the weekly service charge was dropped, the lowest denomination for airtime is now sh500 and we discovered texting.

About the sh500 airtime denomination, I remember then marketing manager Eric Van Veen declaring that they may never go below the sh5000 denomination airtime card – they were made of plastic, about the size of a playing card, because it didn’t make economic sense. 

Since then we moved away from voice where, only but ten years ago in 2007 MTN Uganda was reporting an Average Revenue Per Unit (ARPU) of $10,  which has now fallen to $2.11 in 2016.

The action has moved to data service where MTN now has 1.5 million active data subscribers and 5.2 million mobile money users.

As a journalist reporting for a foreign media agency, I used to type or handwrite a story, walk over to the post office to have it faxed. Depending on demand I would have to wait for my story to be faxed after which I would call Nairobi to find out if they had received it. More often than not they transmission would be incomplete and would have to be repeated or just page two and four of a five page fax. And then I would have to stay by the phone at the office in case Nairobi had any questions.

Numbers were hard to come by, but that mobile telephony has forever altered the economy of Uganda cannot be disputed. The anecdotal evidence alone is overwhelming.

Today I could send my story over the phone, having already downloaded background off Google and can even transmit audio and video file, and all in a fraction of the time it took then. Leaving me time to chase other stories. I shudder to think at what my output today would be compared to then. 

This improvement in efficiency and output is mirrored in whatever sector you can think of – manufacturing, transport and general trade. And they say we haven’t even begun to tap the full potential of the mobile phone...

Since that exciting day in November 1998, MTN has paid sh3.7trillion in taxes to the treasury –sh450b alone last year, contributed sh120b to the Rural Communications Development Fund, which is now 2 percent of their gross revenues and It employs thousands directly.

And it has been good business for MTN too, last week they reported revenues of about sh1.6trillion in 2017.

If mobile telephony has become such an integral part of our lives and the general economy, one needs to look to MTN as the trailblazer.

As part of the liberalisation experiment, MTN has to have been the most successful in creating improved efficiencies, increased output and revitalising an industry.

If we can only match the changes that have happened in the last twenty years over the next two decades, I shudder to think how life will have changed by then … no more offices? Ownerless cars? And for the kids? No School?

KALE KAYIHURA WAS ALWAYS CHASING, NEVER AHEAD

Last weekend President Yoweri Museveni relieved long serving Inspector General of Police General Kale Kayihura of his position and replaced him with deputy Inspector General of Police Okot Ochola.

In the same announcement Museveni also replaced security minister Lieutenant General Henry Tumukunde with another bush veteran General Elly Tumwine.

Since the announcement few people have given Kayihura the benefit of doubt. They blame him for the worsening security situation, the side-lining of competent police officers to be replaced by his favourites and all that is wrong with the police today.

By the time some sympathy came through it was late in the week and brushed off as public relations for the fallen General.

Kayihura came to the helm of the police force replacing another military man General Katumba Wamala.  Kayihura had previously distinguished himself as the head of the anti-smuggling unit, with his pivotal role in pulling out the UPDF out of Congo at the beginning of the century among other achievements.

All reports point to the fact that he is an intelligent man, a diligent worker.

But clearly something went horribly wrong during his tenure as police chief.

"To begin with Kayihura was at a disadvantage being appointed police chief given his military background...

The mentality of the police and the military are different, if only because they are trained to handle different threats to security. The army is expected to be fighting external enemies while the police are charged with promoting and maintaining law and order among a civilian population. To make the psychological shift will always be difficult for even the best minds.

The argument can be made though, that our police force, a relic of a bygone era, was not designed to collaborate with the people, but as an instrument of repression on behalf of the colonial state. So even the policemen who have come through the ranks cannot be expected to make the mental shift to a more civil force. Which is a good point.

However a police officer who has undergone training specific to the force and risen through the ranks would be at a decided advantage over Kayihura, who was parachuted into the top slot.

Of course the Commission of Inquiry into the police force headed by Justice Julia Sebutinde in the late nineties unmasked the police force as having lost its way and only short of being a criminal organisation. The commission found that policemen were not only collaborating with thugs against the population but in many instances actually initiating and leading criminal activity.

It was a desperate time that called for desperate measures.

In tripling the size of the police force, winning it a bigger budget over the years and better equipping it, Kayihura may have broken the back of the original organisation but the widespread feeling is that a new one slid in to take its place.

"Kayihura did not inherit an ideal situation. It is conceivable that his elevation was not welcomed by those he found in the force. There may even have been cause for him to be suspicious of everyone around him, not to mention the tea served to him. And the urgency to show quick results may have forced him into initial errors which only snowballed out of control as time went by...

In hindsight Kayihura was really meant to be a change agent, who goes in for a short time, shakes up the old networks, sets the stage for a realignment of the police back to its original mandate and leaves. Something like what happened to his predecessor Wamala, whose famous order to put violent criminals “out of action” caused a stir in polite society.

His attempt to break up the old police force and recreate it, could have been done more delicately. He could have focused on building the institution and taken a back seat, rather than hogging the limelight. In the same vein he might have looked to salvage and leverage the positives form the old police rather than tear it all up.

Kayihura did a lot for the police. They now have a purpose built home in Naguru. They are a much larger, better equipped force, with specialised units ready to respond to any number of situations. Facilitated community policing.

Kayihura is just as fallible as the next man. On the one hand it might be that the challenges of the police were too great to address in the time he was given, that his was a work in progress. On the other hand it might just be that he was a man out of his depth and that he was bound to end his tenure reviled and scorned anyway

It’s easy to criticise when looking from the inside in.

Hopefully history will be kinder to him and give him more credit than the public is willing to currently.

THE OIL INDUSTRY AND THE FIGHT FOR OUR FAIR SHARE

The plan is that first oil will start flowing in 2020. The industry estimates that between now and then at $20b (sh72trillion) will be spent in preparation for this event.

In the exploration phase at least $3b was spent over eight years. It is estimated that local companies managed to capture 28 percent of this figure or $840,000 was captured by local firms.

The challenge is to keep us much more of that money here.

The truth is the capacity to produce oil without the local help exists. To appease local constituencies back home and retain as much money as they can for themselves means that regardless of whether we are ready or not as people the oil will be extracted and we will not even get the crumbs.

The oil industry is very capital intensive and therefore there is little we can do in the higher end of the value chain where the outlays are bigger, but there are areas – providing basic services where Ugandans can participate.

To that end the government through the Petroleum Authority of Uganda (PAU) has called on Ugandans to register onto a local data base of goods and service providers, who will be given first priority in getting contracts, especially those ring-fenced for Ugandans.

Questions still remain about whether our local providers can live up to the exacting standards of the industry. A lot of work especially in the private sector is being done to ensure readiness.

"Assuming the $20b of inflows into the country attract two percent insurance premiums that would amount to about $400m (sh1.5trillion). In 2016 the industry underwrote sh634b worth of premiums...

In that line the insurance sector has been gearing up to participate in the oil industry.

At the end of 2016 they established a Syndicate to underwrite the risks in the oil & gas sector. The syndicate which was created with the approval of the Insurance Regulatory Authority (IRA) is supported by international reinsurers by way of $500m reinsurance facility.

This is important because average claims in the industry have been put at $25m according to Alliance Corporate Global & Speciality (ACGS) one of the world’s largest corporate insurers.

Essentially Uganda’s insurance companies have come together to collaborate in underwriting risk in the sector.

Being as it is a new industry they have contracted the UK based Total Risk Solution (TRS) with 150 years’ experience to train local staff in of oil & gas insurance.

And it is not as if they are reinventing the wheel. In Indonesia, Ghana, Cambodia and Nigeria similar arrangements have been put in place and have not only served the industry well but also ensured more monies remain in country.

All this is being done to conform to Ugandan Petroleum legislation which provides for the contracting of insurance services from locally registered entities.

There seems to be a loophole in that regard in the law under Petroleum Authority of Uganda (PAU) operates. While some basic services have been ring fenced – security, catering, logistics among others and fuel services, for local players, insurance services are not among them...

Some reservations persist at the regulatory level, about the capacity of local insurers to cover the magnitude of risk in the oil & gas industry, whether giving the syndicate a green light would constitute the creation of a monopoly, whether reinsuring our local insurers to do the job would not add another layer of costs and whether value will be created all around.

The truth is that foreign industry players given a choice would use their own insurers. The only way to ensure our own industry players get a fair shake is to compel the oil & gas industry to give first right of refusal to our own.

That has to be the guiding principle in ensuring we retain as much money as we can locally.

The benefits of the insurance company getting a leg up in the oil & gas industry would have a positive ripple effect throughout the entire economy.

At the bare minimum it would increase the capacity of the industry not only financially but technically as well. The industry players will get new capacity to insure for risk in the oil & gas industry, which capacity can be employed to win business in the region and further afield.

But just as important it could help boost the country’s stock of long term savings. The insurance industry took the brunt of the loss with the breakdown of stability and 1970s and 1980s, people stopped taking out insurance. The habit was lost.

"As a result the insurance industry is only just beginning to gather steam. The long term savings that insurance hold, in other countries has helped build infrastructure and support long term projects critical for national development...

The insurance industry’s attempts to get ready should not be lost and may even serve as a useful example of how other industries can position themselves to take advantage of the coming oil

FINANCING THE UGANDAN BUSINESS

Survey after survey of the business community points to the lack of access to finance or the high cost of finance.

The reduction in the Central Bank Rate (CBR) to its lowest ever at nine percent recently should promise some relief, as banks peg their lending rates to it.

So hopefully we should be seeing an uptick in business activity. I doubt.

At least nine in every ten businesses in our economy is a small or medium enterprise (SMEs). According to Uganda Investment Authority (UIA) companies in this category do not have an asset base exceeding sh360m.

One way the narrative about financing our businesses gets it wrong is that we think commercial banks would be the key financers. Commercial banks are more comfortable with and their products are structured to support going concerns – businesses which are consistently profitable or at least have consistent cash flows, which is not what can be said for most of our SMEs.

"The challenges of financing SMEs are many but the principle ones are that they have no or inadequate assets that can serve as collateral, relatedly they have low profit levels or liquidity to ensure repayment and have unsatisfactory business plans to give an indication of what the business is up to, where it is going...

A different kind of financing is needed for our SMEs, which gap is not being filled, presumably because it is too much work and too risky.

SMEs are often started using the funds of the founder. These are either savings or even loans borrowed against other income. The beauty of such funding is often the proprietor has written them off – consciously or unconsciously, as soon as they are out of his pocket.

The next best funding is from family and friends. Depending on the business acumen of these returns may not be required soon or ever.

Were it not for such startup financing most businesses would not take off. But they are rarely if ever huge sums.

The next level of financing may come from angel investors. These may or may not be family, but they are often wealthy benefactors willing to chance their money for a reasonable return. This is where Uganda entrepreneurs may get stuck.

This kind of investor may be a bit sophisticated, would want to see the business books, a business plan and have an in depth interview with the business promoters. If you are not clear about how you make money, how you use the new money and what returns the investor can expect.

This funding can be useful if the funder is not asking for immediate returns and is in it form some share of the business. If the business collapses he may walk away to lick his wounds and not follow up on his shillings.

"But the informal way we conduct our business means we would not be attractive to such investors, who can marshall significant resources on the strength of their own reputation and may even throw in the benefit of their business experience...

By this point hopefully your cashflows are growing and consistent. It may be the time to consider borrowing from the bank. Unlike the financing the business has been relying on up to this point, the bank will not be as patient. At the basic level the repayment schedule will kick off straight away, which can put enormous pressure on the business’ working capital.

The challenge for many of our businesses is that we forgo the patient capital for commercial bank loans. Before we even begin to think about the cost of that funding, the demand and discipline of regular payments against a backdrop of an uncertain business environment, often does in our business.

The point is that one should be thinking of different financing for different stages of the business and it is only until the business model has been shown to work – there is enough demand for the good or service you are hawking, that scaling up can be considered.

Our businesses often collapse spectacularly because we start to scale up before the business model is working. We use the wrong financing at wrong stage of the business development. But most importantly we are not meticulous in our record keeping, meaning we don’t know what we are doing wrong and therefore continue to replicate our errors. And probably worse, we don’t know what we are doing right and therefore cannot replicate it.

"Our financing challenges are more a function of lack of organisation, thereby reducing our bargaining power in the market...

One local example jumps to mind. One local business with a need for urgent working capital discovered it could leverage its near money assets for a bank overdraft. While the cost of the overdraft was more than 20 percent at the time, since they have been exercising the facility – two years now, they paid 3.7 percent in interest for the facility last year and 5.7 percent the previous year.

Another business recognised a need to beef up its balance sheet went to its shareholders and managed to raise sh200m to boost the business. It helped that the business’ records showed that their initial investment was valued at many times over the value of their initial outlay and that the projections, assuming the business was even half as successful over the next ten years, meant the pattern of capital accumulation was bound to be repeated. The new equity infusion, apart from the arranging costs – mostly mineral water, has cost the business almost nothing to date.

The point is that the story of expensive financing our market is a convenient excuse for many of our businesses poor management practices. That and our unwillingness to relinquish some share of our businesses to other partners. But that is a story for another day.

THE ISSUES SURROUNDING TRYING TO BE A GOOD LEADER

In the last fortnight the issue of leadership has really come into the fore.

In South Africa Jacob Zuma stepped down from the presidency, more like he was forced out kicking and screaming by his erstwhile allies. During his term he has blighted the notion that an African leader handed an emerging economy to manage can shed his baser instincts and run a tight ship.

Closer to home, disturbing, but not surprising, noises have been raised about our handling of refugees. Only last year the world was in awe of us. How as a poor country we were managing to handle a historic influx of refugees, up to a million from South Sudan alone. It turns out of course that that number might have been grossly overstated for the purpose of skimming, more like shovelling, the excess funds to connected individuals in the Office of the Prime Minister (them again?) and related UN and donor agencies. An investigation is ongoing but everyone is seating tight.

In Ethiopia prime minster Hailemariam Desalegn resigned following a wave of mass protests around the capital Addis Ababa. It was a classic case of, if you give them an inch they will take a mile. 

Previously to the recent protests the Ethiopian government had released hundreds of political prisoners to ease mounting pressure. But as soon as they were released protests begun calling on Adis Ababa to release more. Desalegn, might have stuck his neck out, betting that by releasing some prisoners the tension would ease and when it didn’t, and in fact mounted, he jumped – or was he pushed out?

Leadership is not for the fainthearted. On one extreme side of the pendulum are the leaders – rare indeed, who with former US president Harry Truman profess that “The buck stops here” or on other side of the pendulum, the leaders who will take all the credit for all the good but no responsibility for any of the bad that happens in their time.

Whether one tends towards one side or the other is a function of their upbringing, mentoring and world view.

The moralists would like to believe it is a cut and dried subject. You are either one or the other, with no space for grey in between. But such people have often not had authority or leadership placed on their shoulders.

Imagine you become a leader. Say of Wakanda.

 Up to this point your credentials – academic, moral and reputation are beyond reproach.

The first thing you realise is that to get anything down you need power, the ability to influence people and events, without which you cannot bring your vision to life. But you also discover that you will not be allowed to go about your business unmolested. There are plans to unseat you no sooner have you assumed the throne, and not only from the official opposition. Even from within your own ranks. External agitators will not be left out too.

"Despite your best intentions in an effort to retain power, you may be forced to get dirty, doing or sanctioning actions you would never have dreamed of. And it is very possible that your desire to stay in charge even compromises your ability to achieve your program...

The longer you go down the murky road, the more you lose touch with reality, up to the point where like Zuma, you protest that you see no wrong you have done.

Meanwhile all of us standing on the sidelines wonder why you don’t resign and are shocked you show no remorse.

To avert the above scenario, what if you became a leader. But when faced with the above scenario, of needing to cling to power to manifest your vision, you instead choose to sell your vision far and wide, in the hope that a critical mass of your people will internalise it, so much so that, if the need arises you can step down, safe in the knowledge that your mission will be completed without you.

But as was pointed out to me, the same mechanism that propels one to leadership, the ego, would not allow such an act of selflessness. The ego demands that you take credit for your achievements, stepping down is not an achievement that seats well with the ego. So you soldier on convinced that you are doing good work and the moral questions are but a distraction. And at another extreme would argue that the end justifies the means.

Of course in our thought experiment above we assume that the leaders in question have goals beyond their own self-aggrandizement or enrichment.

"This in no way justifies why leaders, at every level of society,  behave the way they do, but is a partial explanation, a rough psychoanalysis of their motives, which may help in understanding and even dealing with them....

AGRICULTURE IS MORE THAN FARMING

The second annual Harvest Money Expo held this weekend was a great success, judging by the number of people who trooped to Namboole for the event.

It’s heartening to see too that the interest in agriculture is being shown by all classes of people. Heartening because to fulfil our agricultural potential as a country we have to have all hands on deck, because as it is, while we feed ourselves, we have not even begun to scratch the surface of what we are capable of.

As it is now everyone is being encouraged to get into production, which is as it should be, because we need to produce more to take advantage of economies of scale and more importantly to kick start the agribusiness sector that will create thousands of jobs.

"The truth is the hundreds of jobs we need will not be created on the farm. As production methods become more mechanised there will be less use for manual labour. It is arguable that, with the entrance of more computerised processes in the factories even there manual labor will be required less and less. 

But for us here that might still be some time away.

In the US at the end of the Second World War there were 30 million farming families, people who derived a livelihood directly from their land, today they are under three million. The rest have gone to work in industry and services.

Chances are that is the same way our agriculture will go too.

However when we think of agriculture we only think about growing crops or rearing animals. The right way to think about agriculture is as a value chain, where production is just one part of a whole chain and not necessarily, the beginning.

For argument’s sake let us start on the farm. So one can be the farmer who produces the crop or rears the animals. But one can also be the person who deals in the inputs – tools, drugs, fertiliser, herbicides or pesticides. Down the chain one can be the trader who buys the produce or the warehouse owner who provides storage or the man with the grinding mill or the trucks to ferry the produce to the market. Further down one can be the exporter or the processor. If we want to be more sophisticated one can be the breeder or the nursery bed owner who sells to the farmer. Or one can even be in finance, specialising in meeting the sectors peculiar needs for money. And we haven’t even started yet.

Getting down and dirty on the farm may not be your thing. And that is fine. There are many ways one can insert themselves into the value chain.

One farmer I know after fumbling for close to a decade has found his niche. He is going to be a breeder of quality dairy animals. While dairy cows on the regular market can go for up to a million he is already selling his animals at more than five million shillings a cow.

Interestingly he zero grazes his herd of about 40 animals and has managed yields of up to 40 liters of milk daily. The shed occupies under an acre of land, the remaining 40 cares he uses to produce the silage to feed the cows. When we last talked he had silage to last more than a year and half.

He pointed out to me too, that one can decided to only grow hay for sale to the market. There is already demand, which he anticipates will grow with time.

Another person is exploring the use of coffee as an ingredient in cosmetics. She has set up her supply chain, her production facilities and is in advanced stages of product development.

Quality cuts has no herds of its own. It buys its meat from the market and packages that for sale in the super markets.

Dutch Radobank is one of the world’s biggest agricultural bank, which while it has other traditional banking products, is on the cutting age of financing agribusiness at home and around the world.

It is important that we appreciate this perspective because for our agriculture to reach its full potential the whole value chain, from farm to plate, has to be well developed. Specialisations up and down the chain have to be created.

"Of course if our production is not adequate we cannot develop specialisation and the temptation will always be for people in the sector to try and do it all. A nice ego trip but which does not lend itself to efficiency....

To support industry we need to produce much more than we are actually producing right now. Businessman Patrick Bitature pointed out in a commentary last week that in 2007 we produced about 14,000 tons of tomatoes. That is the equivalent of 700 20-ton containers.

Sounds impressive until you try and workout what that means for industry.

A small tomato paste processing plant which goes for about $10,000 (sh37m) can go through a ton an hour of tomatoes, he pointed out. Assuming 50 plants – one in every two districts, working 12 hours a day it would take less than a month to process Uganda’s annual crop.

Simple math shows that to have these plants optimally employed throughout the year, we would need at least 168,000 tons or 12-times the 2007 output to make these processing plants viable.

And I am sure the same calculation can be applied to any product we hope to produce.

THE UGANDA SUGAR INDUSTRY IS COLLAPSING, DON’T SAY WE DIDN’T TELL YOU

There is a real danger that the sugar industry in this country will not be around in 20 , ten , even five years if government continues to fold its arms and do nothing about current developments.

A bit of background should help put the scene in context.

Uganda’s sugar industry goes back to the early 20^th century when the precursors of the Kakira Sugar Works and Sugar Company of Uganda Ltd (SCOUL) planted their first seedlings in Kakira outside Jinja and in Lugazi respectively.

By the time of independence we were already self-sufficient in sugar production with the addition of Kinyara Sugar in western Uganda.

The Idi Amin era and the expulsion of the Asians in 1972 sent our production back to scratch. The industry has only been resuscitated in the last 30 or so years.

The three major players have used the time tested method of using outgrowers to supplement the sugar cane harvested from their nucleus plantations.

They have helped the outgrowers with seedlings, credit and other extension services to ensure the productivity of their farms, in addition they have provided social services like health and education for their areas.

In fact seeing as government has forgotten how to promote agriculture, the ministry would do well to study these industrial estates to learn how to support farmers in increasing the productivity of their farms.

"Until the turn of the century the three big sugar concerns have been expanding their production to the point that we are currently the only country in the community that has a surplus of sugar, meaning that we do not have to import sugar...

But they haven’t stopped there. The three industry have created supplementary industries – power generation and ethanol manufacture from the by-products of sugar production.

Of all the industries government has tried to grow the sugar industry has been the most successful. 

They are the largest employer of any industry with at least 20,000 direct employees and tens of thousands more of people employed up and down the supply lines.  Last year financial between themselves they paid about sh300b in taxes. And from nearly zero 30 years ago installed capacity has been beefed to crush 400,000 tons per annum.

But in a classic case of biting the hand that feeds it government through its indifference or even worse out right collusion is overseeing the collapse of the industry.

In the last decade government has licensed more than half a dozen mills to crush cane without a corresponding increase in the acreage of sugar plantation. It does not take rocket scientist to work out that the sugar cane has to come from existing plantations.

"The trade ministry has disingenuously argued that there is no law that prohibits the licensing of sugar millers. The existing policy, issued in 2010, while it lays out the parameters within which the sugar industry will operate, has not got the force of law the ministry argues. In the meantime they has been a pointed lack of urgency in passing a law for the sector. We know that if this government wants something passed it will be passed in double quick time. Passing the Sugar Bill, 2016 is clearly not one of its priorities....

It should be because not only have these new operators disrupted the operations of existing players --- they claim they are plants are now working at only 47 percent but thousands of tons of sugar have been smuggled into the country, meaning existing players are just stockpiling the sweetener – 600,000 bags at last count, priced out of the market by the smuggled sugar.

The three major producers have only just expanded their production capacity to take advantage of regional opportunities having planned for the increased acreage under cane, which they now find is being poached voraciously.

The Uganda sugar industry faces the real danger of going the way of their Kenyan counterparts. Kenya, who supplied the region in the days when our sugar industry was in doldrums, have seen their industry collapse following a similar pattern as is happening in Uganda, a deliberate conspiracy between the sugar importing cartels and corrupt government officials. As a result the government has opened the flood gates for imported sugar to come in unabated.

At the height of its powers Kenya’s sugar industry was producing almost 700,000 metric tons of sugar annually and has still been brought to its knees. Uganda at its peak in 2015 produced 420,000 tons of sugar.

The big three are not angels and their might be legitimate concerns about how they do business, but that is not cause to throw the baby out with the bathwater.