Parliament has approved an additional Shs 115 billion investment into Atiak Sugar Factory, owned by Amina Moghe Hersi. This brings the total government expenditure on the project to Shs 668.71 billion. However, the Opposition has strongly criticized the continued funding, arguing that despite the massive investment, the factory has yet to produce a single kilogram of sugar.
Atiak Sugar Factory, a subsidiary of Horyal Investments Holding Company Limited, was commissioned in October 2020 with an annual production capacity of 66,000 tons. However, the project has faced persistent financial struggles, particularly following the 2017 acquisition of Crane Bank, one of its major creditors. After Crane Bank was sold to DFCU, restructuring its liabilities became difficult, prompting the government to step in as an equity partner.
Among others, in May 2018, the government, through the Uganda Development Corporation (UDC), acquired a 10.1% stake in the factory for Shs 20 billion to support its completion. By July, an additional Shs 45 billion investment raised the government’s stake to 32%. In April 2019, the factory requested another Shs 24 billion to construct staff houses and offices, bringing the government’s shareholding to 40%.
According to Mohamud Ahmed, Director of Planning and Business at Atiak Sugar Factory, the initial government investment was in ordinary shares. To acquire its 40% stake, the government injected Shs 80 billion through UDC, purchasing eight million shares at Shs 10,000 each.
The company maintains that no further resources were required from UDC to complete the factory. Instead, additional funding has been directed toward making the project sustainable, covering expenses such as dam construction, irrigation, equipment procurement, and worker housing.
Following multiple fire outbreaks, the government allocated Shs 108 billion in 2022 for agricultural mechanization equipment under a finance lease arrangement.
Despite these investments, the factory has yet to commence sugar production, fueling concerns over the viability and management of the project.
