Uganda’s sugar industry is once again at the centre of a heated national debate following plans to officially open CN Sugar Factory in Namayingo District on Tuesday by President Yoweri Museveni, an establishment that has emerged amid serious legal, regulatory and policy controversies.
At the heart of the dispute is whether political leaders, including the President and the Prime Minister, can be drawn into legitimizing an investment that some sugar players say was conceived, constructed and operationalized outside the law. The controversy has reignited long-standing tensions between established players, new entrants and regulators in an industry that is strictly controlled due to its strategic importance to farmers, employment and national food security.
The Sugar Council And Its Legal Mandate
Recently, the Uganda Sugar Industry Council was inaugurated by the cabinet Minister of Trade, Industry and Cooperatives Hon. Francis Mwebesa.
The Council was established to regulate, coordinate and streamline the sugar industry, especially in light of rapid expansion and emerging conflicts.
Among its core mandates are:
• Guiding the licensing of new sugar factories
• Enforcing zoning and minimum distance requirements between factories
• Protecting cane farmers from exploitation
• Preventing monopolies and unhealthy competition
• Ensuring orderly growth of the industry
• Advising government on sugar production, pricing and sustainability.
One of the key regulations is that sugar factories must be located at prescribed distances from each other to avoid cane poaching, factory wars and market distortion.
CN Sugar And Alleged Non-Compliance
According to industry stakeholders and council insiders, CN Sugar has failed to comply with several of these mandatory requirements.
Concerns raised include:
• Lack of proper licensing before construction and production
• Absence of required environmental approvals prior to establishment
• Alleged violation of zoning and factory-spacing guidelines
• Entry into production before regulatory clearance
These issues, some sections of the sugar council members argue, make CN Sugar illegal from inception, as Ugandan law requires approvals to precede construction and operation, not vise vasa.
The Patel Factor And Claims Of Unhealthy Competition
The controversy is further fuelled by ownership concerns. Mr. Patel, the investor behind CN Sugar, reportedly already owns or controls multiple sugar factories across the country, including:
• GM Sugar in Njeru
• Kamuli Sugar in Kamuli District
• Mayuge Sugar in Mayuge District
The addition of CN Sugar in Namayingo has alarmed industry leaders and members of the Sugar Council, who argue that this expansion amounts to market capture rather than genuine investment.
Some council members are quoted as saying; “He wants to book every district to block other upcoming investors. This is not development; it is greed and monopoly.”
They warn that allowing one investor to dominate multiple regions undermines fair competition and defeats the very purpose for which the Sugar Council was created.
Courts, Defiance And Regulatory Breakdown
CN Sugar has reportedly been challenged in the courts of law on the Namayingo establishment, where guidance was issued that the dispute be resolved through the Sugar Council, the legally mandated regulator. However, reports indicate that Mr. Patel has declined to heed the council’s guidance, despite its statutory authority. This alleged defiance has raised serious questions about respect for regulatory institutions and the rule of law not just in the sugar sector but Uganda in general.
Why Involving The President And Prime Minister Is Controversial
The planned invitation of President Yoweri Museveni and Prime Minister Robinah Nabbanja on Tuesday to officially open CN Sugar has drawn sharp criticism from legal experts and industry regulators.
Pundits argue that such an action would:
• Appear to rubber-stamp an illegal establishment
• Undermine the authority of the Sugar Council
• Contradict the very reforms championed by the President and Prime Minister
• Set a dangerous precedent where political power overrides the rule of law.
Ironically, it is the same political leadership that supported the creation of the Sugar Council to end chaos in the industry. Supporting CN Sugar in its current form would be seen as negating that reform agenda, added a city law pundit.
Sugar Wars: Old Guards Vs New Entrants
Uganda’s sugar sector has long been plagued by “sugar wars” — conflicts over cane, licensing, factory locations and market control. While new investment is necessary, regulators insist it must happen within the law, not through shortcuts backed by political pressure.
Allowing CN Sugar to proceed unchecked, critics say, would:
• Encourage lawlessness among investors
• Weaken regulatory institutions
• Disadvantage compliant factories
• Destabilize farmer livelihoods
Rule Of Law Or Rule Of Influence?
At its core, the CN Sugar saga is no longer just about one factory. It is a test of whether Uganda’s investment environment is governed by clear rules or political influence.
Members of the Sugar Council are now publicly appealing to the President and the Prime Minister not to be used to legitimize an illegality, warning that doing so would erode confidence in government reforms and weaken the integrity of the sugar industry.
GM Sugar Ltd is known for its operations in Buikwe District, but has faced recent scrutiny and temporary shutdowns by Uganda’s Labour Ministry in March 2025 due to severe worker safety violations, including fatal accidents. While providing quality sugar and industrial alcohol, the company has been grappling with significant safety and labor issues that have led to government intervention and public concern.
As the controversy deepens, the question remains: Will Uganda protect the rule of law in its sugar industry, or will regulatory institutions be sacrificed at the altar of political expediency? Watch the space….
