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March 31, 2009

Ugandan government to limit land for foreigners

by Elias Biryabarema

Foreign investors should not be allocated huge chunks of land especially that which measures in square kilometres because such land should principally be owned by Ugandans, President Museveni has directed.

“With high food prices around the world (which is an opportunity for us) some countries that do not have agricultural land want to buy the land of ‘sleepy Africans,” Mr Museveni said in a February 29 letter, a copy of which Daily Monitor has seen.

The letter addressed to the Finance Minister titled, “Foreigners Buying Big Chunks of Land”, Mr Museveni argued that foreigners, intent on profiteering from the global food price bubble, were rushing to Uganda to buy large tracts of land on the cheap for agricultural production.

Mr Museveni said such investments in agriculture by foreigners have no solid and lasting economic advantages for Uganda except for provision of cheap labour.

Foreign investors, Mr Museveni wrote, should only be limited to small pieces of land ranging from three to 50 acres where they could establish factories. “The purchase of big chunks of land in square miles by foreigners should be discouraged,” he directed.

While Mr Museveni’s intent in the letter would appear to protect national interests in the competition for a dwindling resource, his directive also seems discordant with his government’s long-running policy of pampering foreign investors by lavishing them with cushy incentives, including large pieces free land.

For example, in 1998 Mr Museveni’s administration doled out 10,000 acres of forest land in Kalangala District to edible oils producer, Bidco, to grow oil palms. Since then 8,000 acres of forest cover have been cleared and planted with palm oil trees in defiance of protests from environmentalists and Parliament.

The government also gave a German agro-investor, NKG Tropical Management, 2,500 acres of land in Kaweri, Mubende district in 2000 to establish a Robusta coffee farm.

In 2007 President Museveni’s unpopular effort to give out a huge chunk of Mabira forest, the only remaining large, climate-stabilising natural forest in Uganda, to the sugar manufacturer, Mehta Group was thwarted after outraged environmentalists and Ugandans at large mounted a public protest that ended in the slaying of an Indian.

It is now unclear whether the President has decided to change his investment policy in favour of indigenous investors, particularly in the agricultural sector. It’s also not clear why the President wrote to the Finance minister about matters of land and not to the Lands minister or the Uganda Land Commission.

The new Finance minister, Ms Syda Bbumba, acknowledged receipt of the letter but said she could not explain the President’s new position on land and foreign investors. “Find out his intentions from him,” she said.

In the letter, Mr Museveni said the country doesn’t need foreigners in farming because “Ugandans do that very well,” and that foreign investors instead should only be in the business of processing what is produced. He cited Sameer Agriculture and Livestock Limited, as the perfect example of an agro-processor.

In a telephone interview yesterday, Uganda Investment Authority (UIA) boss Maggie Kigozi would not explain Mr Museveni’s policy change but said UIA’s long-standing practice was to let foreign investors in agricultural areas like plantation farming establish nuclei that would be surrounded by a large number of outgrowers. Pressed about Bidco’s case, she said: “Bidco was a stand alone outside of the general practice and we are really pleased with their work.”

The majority of Ugandans in the agriculture sector lie under the subsistence component, using crude methods and producing largely for consumption. It is a situation that would hardly keep the nation’s agriculture profitable and sustainable.

The Monitor

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