The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Members of Parliament have asked the government to explain circumstances under which Tobacco farmers from Bunyoro sub-region, who are owed money by private companies will be paid off.
The matter follows a supplementary budget request of 291 billion Shillings, which among others, proposes an allocation of 11.2 billion Shillings to the Ministry of trade to pay over 1,000 tobacco farmers who were not paid by Continental Tobacco Uganda and Nimatabac Tobacco Company Limited for leaf supplied between 2017 and 2019.
Nimatabac was first licensed to sponsor tobacco growers in 2017. Although the company paid the farmers for that season, It only paid a sum of 1.23 billion out of 5.81 billion Shillings for the supply of 1000 metric tons of tobacco leaf, during the 2018 season. This left them with an outstanding balance of 4.57 billion Shillings.
The other company; Continental Tobacco owed the farmers a sum of 11.8 billion Shillings and has since paid only 4.5 billion Shillings leaving a balance of about 7.3 billion Shillings. Continental Tobacco was affected by the death of the owner, Wilfred Murungi in 2019.
The government then decided to use its money to compensate farmers with genuine receipts and necessary documents and later deal with the tobacco companies to clear the payment. Finance Minister Matia Kasaija defended the move saying that the government has a responsibility to strengthen the economy through supporting farmers who have incurred loses. He says that they will treat the payment as a loan to the companies.
But members of the budget committee of Parliament have questioned the framework within which the government committed itself to clear the payment for a debt incurred by private companies. Dokolo Woman MP Cecilia Ogwal told Uganda Radio Network that the Ministry of Finance needs to present a Memorandum of Understanding to indicate that the companies will pay the government back once the matter is sorted.
Kasaija says that Government is drafting a legal document to necessitate the payment
Although the payment being processed is for Bunyoro subregion, the companies also picked supplies from the West Nile districts of Zombo, Arua, Koboko, Maracha, and Yumbe. The tobacco sub-sector employs over 38,000 contracted farmers and about 3,000 sponsored farmers.
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