The CN Sugar Test: Can Political Gambling Override A Court Ruling?

By Our Reporter 

The long-running dispute surrounding the proposed CN Sugar factory in Namayingo District is increasingly taking on a political dimension, even as the core disagreement remains rooted in Uganda’s sugar industry laws, licensing regulations and a pending legal battle.

The latest development came after Namayingo District Chairperson Ronald Sanya warned that the district could consider discouraging residents from growing sugarcane if the licensing impasse surrounding CN Sugar persists.

While farmers are understandably concerned about access to reliable markets for their cane, the licensing dispute itself is not a political question. It has been litigated in court, with the High Court making specific findings on the legal framework governing the establishment and licensing of sugar mills.

The court proceedings arose from a challenge by the Uganda Sugar Manufacturers Association (USMA) against the Attorney General, the Ministry of Trade, Industry and Cooperatives, CN Sugar Limited and Shakti Sugar Limited.

In its ruling delivered in January 2025, the High Court examined the Sugar Act, the National Sugar Policy and the authority under which the mills had been allowed to proceed.

Justice Dr Douglas Singiza Karekona held that Section 7(1)(j) of the Sugar Act vested the authority to license sugar mills in the Uganda Sugar Board.

The court further found that, in the absence of a properly constituted Uganda Sugar Board, neither the Ministry of Trade, Industry and Cooperatives nor the Uganda Investment Authority could validly issue sugar mill licences.

The court consequently declared the licences issued to CN Sugar and Shakti Sugar illegal and of no consequence.

The judgment also addressed the 25-kilometre zoning policy governing sugar mills, with the court finding that the policy prohibited the establishment of sugar mills within restricted distances from existing factories.

The High Court issued several orders, including cancellation of the LONOs issued to CN Sugar, an order halting sugar milling operations until the company was properly licensed, a restraining order against further illegal construction and an order directing the Minister to constitute the Uganda Sugar Board.

The court also ordered the Inspector General of Police to remove CN Sugar’s mills from prohibited zones.

However, CN Sugar subsequently obtained a stay of execution pending appeal.

That distinction is critical: A stay of execution means that enforcement of the specific court orders is suspended pending determination of the appeal. It does not, by itself, amount to a declaration that the original High Court findings have been overturned.

It is therefore the legal process, rather than political pressure, that remains central to determining the status of the project.

This is where the recent statements by local political leaders raise a broader question.

The concerns of the farmers are legitimate. Many say the stalled investment has denied them the dependable market they expected when they planted sugarcane, forcing them to rely on middlemen and transport their produce to distant factories.

But the economic hardship facing farmers does not, in itself, change the statutory requirements governing sugar mill licensing.

Nor can a district resolution, political endorsement or public pressure replace a licensing authority established under an Act of Parliament.

The Sugar Council has said it is assessing what remains outstanding before CN Sugar can commence operations and will prepare a report in accordance with the law.

Attempts to portray the dispute primarily as a political contest risk obscuring the actual issue before the country.

The farmers need a market. Investors need regulatory certainty. Existing millers need predictable rules. And government has a duty to enforce the law consistently.

Those interests can only be reconciled through compliance with the legal framework governing Uganda’s sugar industry, rather than by turning a court-tested licensing dispute into a contest of political influence.

For Namayingo, the question is therefore not simply whether CN Sugar should operate. The more fundamental question is whether the factory can operate in accordance with the law and the regulatory requirements governing Uganda’s sugar industry.