With takeover of milk industry, Museveni turns Ugandan presidency into a looting machine
By Charles Kamya Ssentamu
Ugandan taxpayers are on the verge of once again losing out on another public investment to President Museveni as he moves to appropriate the milk cold chain in the key milk basin of western Uganda.
Legislators recently were taken aback when Fred Turyamuheza, their peer from Rujumbura County tabled before the house a letter from the president. In it Museveni was ordering farmers in the districts of Rukungiri, Kanungu, Ntungamo, Kiruhura, Isingiro and Lyantonde to hand over the milk coolers under their control to Brookside Dairies – a firm in which Museveni has controlling shares.
This is the latest evidence of Museveni’s wanton looting of Uganda, by first getting the public to invest in key sectors before walking in to forcefully take ownership of everything – most often under the guise of shady privatization or “joint venture” deals. The takeover essentially removes the farmers’ ability to bargain for better prices. They will no longer have storage capacity, leaving them beholden to Museveni through his proxies.
For the record, these cooling stations, worth millions of dollars, were set up using public money as Uganda set about building its then non-existent dairy industry into and organized sector during the 1990’s. Museveni who has ordered his enforcers, the resident district commissioners to ensure that the order is complied, wants them handed over to Brookside on a silver platter.
To those familiar with the Dairy Corporation story however the orders are not new, and are only the final card in a scheme Museveni hatched long ago to take, for free, a public investment in the dairy industry. The story begins in the early 2000’s when under the guise of privatization; he handed over Dairy Corporation for a token price of US$ 1 to Sameer Agriculture and Livestock, a Kenyan outfit that until then had no background in agriculture.
Under the privatization deal, Sameer was not supposed to transfer or sell the company. Two years to the end of their lease period however, Sameer whose only addition of value was the installation of a powdered milk line, quietly “transferred” its interest to Brookside Dairies in 2014. The value of the deal was not disclosed and although it should have been nullified since it was in violation of the conditions Sameer had signed to. Museveni used his muscle to defend the deal.
The president of Uganda had once again ripped off the taxpayer, in yet another humongous way!
Indications that Museveni had taken Dairy Corporation for himself first came in October 2009 when the Red Pepper tabloid reported that Iran had blacklisted Dairy Corps powdered milk over fecal contamination of the product from a sewerage station that operates near the factory. For several years Museveni has been content with his closed loop since he supplies a quarter of Brookside’s raw milk from his extensive Kisozi Ranch, another public investment he transferred to himself.
But the market has changed sharply in recent years following the entry of private player Pearl Dairies, in which the New York Exchange-listed Rise Fund holds a significant stake. Pearl Dairies has recruited 8000 farmers in western Uganda and set up an extensive cold chain. This has given them a stranglehold on the raw milk market, with their daily purchases equal to 7 times what Museveni’s Brookside is able to process.
Museveni’s first reaction was as shabby as giving an order to grab the farmers’ coolers. In December, he ordered Pearl Dairies to shut down its collection centres, or hand them over to farmers’ cooperatives. But after realizing the wider implications of his move he retreated and opted to take over the public funded coolers.
Museveni has revealed himself as an individual ready to strong-arm competitors for his businesses. Dairy Corporation (Brookside now), is not the first public enterprise Museveni has taken.
Still under the guise of “privatization”, he used Sameer to take a 51 percent stake in Kinyara Sugar Works, the largest estate of cane in the country. Under the deal, the rest of the shares were supposed to be split between Bunyoro Kingdom and a listing on the USE in the ratio of 20/29 percent.
But the public was shocked to learn five years ago that Sameer has assumed 100 percent ownership of the business. Museveni then ordered treasury to compensate Bunyoro for their 20 percent stake.
Not content, he has now teamed with Somali immigrant Morgan Hersi to set up a sugar factory in Atiak in northern Uganda. Recently Museveni ordered the government to but a 10 percent stake in the venture at a price of Ushs 20 billion.
Nobody apart from Museveni knows how value was arrived at since there has been no formal valuation of the business.
For now, nobody can guess his next target as the grand grab continues but eyes are on Uganda Airlines whose registration is still in the names of two individuals despite a huge public outcry.
The Ugandan presidency is a looting machine in all but name.