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Court has directed the trade ministry to constitute the Uganda Sugarcane Board within three months, which will in effect grant licences to industry players.

The court has instructed the Ministry of Trade to establish the Uganda Sugarcane Board within three months, which will then be responsible for issuing licenses to industry participants. This decision came after the court ruled on January 20, 2025, that the Ministry of Trade did not have the authority to issue licenses to industrialists.

The case arose when the Uganda Sugar Manufacturers Association Ltd (USMA) challenged the minister’s authority to grant such powers.

USMA is an association of sugar manufacturers, including Kakira Sugar Works Ltd, Kinyara Sugar Works Ltd, the Sugar Corporation of Uganda Ltd, Bugiri Sugar Ltd and Sango Bay Estates Ltd.

The association claimed the minister had no power and was acting illegally when it granted sugar manufacturing licence to CN and Sharkti Sugar factories, located in Busoga region.

In his ruling, Justice Douglas Karekona Singiza of the Civil Division of the High Court stated that in the absence of a properly constituted Uganda Sugarcane Board, neither the trade ministry nor Uganda Investment Authority could validly issue any sugar and jaggery mills licences on account of exercising their concurrent powers.

“The acts of the trade ministry in licensing CN and Shakti, or indeed any other sugar enterprise, to establish and operate sugar and jaggery mills were unlawful,” he ruled.

The judge noted that failure to put the Uganda Sugarcane Board in place was a breach of a statutory duty by the trade ministry (a line ministry in the sugar sector), a manifestly illegal breach.

“It is the finding of this court that the licences granted to CN and Sharkti sugar companies or any sugar mills and jaggery mills after the coming into force of the Uganda Sugar Act 2010 are illegal and of no consequence,” he stated.

The court also declared that the establishment of CN and Shakti sugar factories and jaggery mills within the 25km radius of the other existing sugar and jaggery mills is contrary to the Government policy on sugar, as amplified by the presidential guidance on the zoning of sugar business enterprises.

Consequently, the judge issued an order for the cancellation of new sugar licences or permissions in the form of letters of no objection that had been granted to CN and Shakti.

The Judge also granted an order halting CN and Shakti sugar and jaggery mills from operating until they have been duly licenced by an authorised body.

Meanwhile, Section 10 of the Act grants the trade ministry general powers to issue policy directions and guidance to the board, which must be complied with.

The judge said operating a sugar mill or jaggery mill without a valid license is expressly prohibited by law and attracts serious criminal sanctions.