Rule Of Law Or Rule Of Influence?Museveni’s Planned Opening Of CN Sugar Raises Legal Alarm & Policy Storm

By Our Reporter

Uganda’s sugar industry is once again under intense public scrutiny following plans to officially commission CN Sugar Factory in Namayingo District on Tuesday, an event expected to be presided over by President Yoweri Museveni. What should ordinarily be a celebration of industrial growth has instead reopened deep questions about legality, regulation, and governance in one of the country’s most strategically sensitive sectors.

At the centre of the controversy is whether political leadership can be seen to endorse an investment whose establishment, according to several industry stakeholders and regulators, is still entangled in unresolved legal and regulatory questions. The unfolding debate has reignited long-standing tensions between established players, new investors, and oversight institutions in a sector tightly regulated because of its impact on farmers’ livelihoods, employment, and national food security.

The Sugar Council & The Question Of Order

Only recently, the Uganda Sugar Industry Council was formally inaugurated by the Minister of Trade, Industry and Cooperatives, Hon. Francis Mwebesa, following Cabinet approval. The Council was created precisely to bring order, coordination, and predictability to a sector that has historically been marked by disputes over cane supply, factory locations, and market dominance.

Its mandate includes licensing new factories, enforcing zoning and minimum distance requirements, protecting cane farmers, preventing monopolies, and advising government on sustainable growth of the industry. Central to these regulations is the requirement that factories must meet all approvals before construction and production begin, including environmental clearances and compliance with factory-spacing guidelines.

CN Sugar & Compliance Concerns

According to several industry players and members familiar with the Council’s work, CN Sugar’s Namayingo plant raises multiple compliance concerns. These include questions over licensing timelines, environmental approvals, adherence to zoning regulations, and whether production commenced before regulatory clearance was granted.

Regulators argue that under Ugandan law, approvals are meant to precede construction and operation not follow them. If these concerns are upheld, they say, the matter becomes less about competition and more about adherence to established legal processes.

Ownership Concentration & Market Balance

The controversy is further complicated by concerns around market concentration. The investor behind CN Sugar, Mr. Patel, is linked to several other sugar factories across the country, including GM Sugar in Njeru, Kamuli Sugar in Kamuli District, and Mayuge Sugar in Mayuge District.

Some members of the Sugar Council and industry analysts warn that unchecked expansion by a single investor risks undermining fair competition and crowding out other potential entrants. They argue that the Council was specifically created to prevent monopolistic tendencies and ensure balanced regional development rather than market capture.

Courts, Regulation &  Institutional Authority

The Namayingo establishment has reportedly been the subject of court proceedings, where guidance was issued that the dispute be handled through the Sugar Council as the legally mandated regulator. However, concerns persist within regulatory circles that Council guidance has not been fully respected, raising broader questions about institutional authority and compliance.

Observers warn that if regulatory bodies are sidelined, it could weaken confidence in Uganda’s governance framework, not only in the sugar industry but across the wider investment environment.

Political Involvement Raises Stakes

The planned presence of both the President and the Prime Minister at the factory opening has elevated the debate to a national level. Legal experts caution that political endorsement, while often symbolic, can be interpreted as validation of an establishment’s legality a perception that could undermine ongoing regulatory processes.

Ironically, it is the same political leadership that championed the creation of the Sugar Council as a reform measure to end chaos in the industry. Analysts argue that respecting the Council’s processes would reinforce, rather than weaken, that reform agenda.

A Sector At A Crossroads

Uganda’s sugar industry has long experienced what insiders describe as “sugar wars” disputes over cane supply, factory siting, and market control. While new investment is widely welcomed, regulators insist it must occur within clearly defined rules to protect farmers, investors, and consumers alike.

Critics warn that bypassing regulation could encourage non-compliance, disadvantage law-abiding factories, destabilize farmer incomes, and weaken oversight institutions.

Recent scrutiny of GM Sugar Ltd, including temporary shutdowns by the Labour Ministry in March 2025 following serious worker safety violations, has further amplified calls for stricter enforcement across the sector.

Beyond One Factory

Ultimately, the CN Sugar debate goes beyond a single investment. It is shaping into a broader test of whether Uganda’s industrial growth will be guided by institutions and laws or influenced by political expediency.

As the commissioning date approaches, members of the Sugar Council and industry observers are urging political leaders to allow regulatory processes to take their course, warning that the long-term credibility of government reforms, and the stability of the sugar industry, may depend on it.

As the country watches closely, the question remains: will the rule of law prevail, or will influence outweigh regulation?