More than 600 individuals are facing imminent job losses following the government’s decision to shut down a sugar factory in Namayingo District.
The Ministry of Trade, Industry, and Cooperatives directed CN Sugar Ltd to cease operations, citing the company’s failure to meet the prerequisite of establishing a nucleus estate of at least 500 hectares before commencing factory operations.
In a letter dated June 17, Trade Minister Francis Mwebesa stated that CN Sugar Ltd had initially been granted approval on the condition of developing a 500-hectare nucleus estate. However, subsequent verification revealed that only 121 hectares had been established, prompting the ministry to revoke the factory’s operational certificate.
In response, Rashid Kakungulu, manager of CN Sugar Ltd, contested the ministry’s decision, asserting that they had acquired and planted sugarcane across 1,300 acres, exceeding the ministry’s requirement.
He emphasized the significant investments already made in the factory’s construction, amounting to $6 million, and requested compensation of $15 million if forced to cease operations.
Local officials, including Namayingo District’s chairperson Ronald Sanya and vice chairperson Abdallah Twaha Kawuta, expressed concern over the economic impact on the region, highlighting the factory’s role as a key industrial presence in the area. They planned to petition President Museveni for intervention.
David Christopher Mombwe, General Secretary of the Busoga Sugarcane Outgrowers Association, criticized the government’s decision, arguing that closures like these exacerbate the economic challenges faced by sugarcane farmers rather than addressing underlying issues such as fluctuating sugar prices.
The closure of CN Sugar Ltd raises significant concerns about employment stability and economic repercussions in Namayingo District, prompting calls for government reconsideration and intervention.
Comments are closed.