Uganda’s journey from sugar shortage to regional supplier

At 74, Mr Muhmad Ofwono still remembers the day he and other Busia residents were caned after begging former Kenya president Mr Daniel Arap Moi for sugar.
In 1988, Mr Ofwono, a resident of Arubaine in Eastern Division, Busia Municipality, and other residents braved the rain to meet Mr Moi, who was visiting the Kenyan side of the border.

They asked him to stop the arrest of Ugandans crossing into Kenya, commonly known as “Makanyago”, and also appealed for sugar.
“We told president Moi that his government should stop arresting Ugandans who cross over to Kenya, and also requested him for sugar,” Mr Ofwono said.

Mr Moi responded by giving the crowd 10 bags of sugar. However, the residents fought and struggled over the scarce commodity, prompting the then resident district commissioner (RDC), Afande Amooti, to order our arrest and caning, on allegations that we had embarrassed the sovereign State of Uganda.

“It was raining, but we braved the shower and struggled for the sugar. However, we did not escape the punishment ordered by the RDC,” Mr Ofwono recounts.
He said Uganda was facing a severe sugar shortage at the time, with a kilogramme costing Shs2,000 in Kampala and Jinja.
The high price came at a time when the old currency had been devalued.
Mr Wilson Muhumuza, who was in Busia as early as 1984, told this publication at the weekend that the sugar shortage was caused by the collapse of the Kakira, Lugazi and Kinyara sugar factories.

“Following the expulsion of Asians in 1972 by then president Idi Amin, Uganda’s manufacturing sector had largely collapsed by 1976,” Mr Muhumuza said.
He said the shortage of sugar and other basic commodities, including soap, clothes, matchboxes and salt forced Ugandans to resort to smuggling goods from Kenya, giving rise to the infamous “magendo” trade.
Nearly four decades later, the situation has reversed. Uganda, which once struggled with sugar shortages and depended on Kenya for basic commodities, is now producing enough sugar to meet local demand and supply the surplus to the Kenyan market.
Mr Muhumuza said Uganda has since undergone an economic turn-around, moving from a sugar-deficit economy to an exporter of the commodity.

According to Bank of Uganda figures, the country produces more than 800,000 metric tonnes of sugar annually.
Figures from the central bank indicate that despite shifting trade barriers and permit restrictions, Uganda’s annual sugar exports to Kenya stood at $23.16 million (about Shs87 billion).

Driven by supply deficits in Kenya following the near collapse of Mumias, Nzoia and Chemelil sugar companies, production was too low to meet local demand, pushing prices sharply higher.
However, as Kenya struggled to fill the sugar gap in the local market, Uganda has since emerged as a source of cheaper but quality sugar.
Mr David Ogeya, a trader in Busia, Kenya, said although the price of sugar had dropped from Ksh220 to KSh200 and later to about KSh150 per kilogramme, equivalent to about Sh6,160, Sh5,600 and Sh4,350, respectively in Ugandan currency, it remained more expensive in Kenya than in Uganda.

“In Uganda, a 50-kilogramme bag of sugar sells for as low as Sh145,000. In Kenya, the same quantity sells for at least KSh6,000 (about Sh170,000),” he said.
Each day, truckloads of sugar continue to offload at Sofia in Busia Town, where traders stock the product.
Mr Bruno*, who sells sugar informally to Kenya, said the business was booming, partly driven by sugar shortages and high prices in the neighbouring country.
“We are stocking sugar and waiting for our Kenyan customers to come and buy it for the local market,” he said.

He told the Daily Monitor that the high cost of producing raw sugarcane and the near collapse of Mumias, Chemelil and Nzoia sugar factories had affected sugar production in the neighbouring country.
Ms Apofia Nawasiima, a trader in Sofia, said most businesses were stocking sugar to benefit from the high demand in Kenya.

“The volume of sugar being taken to Kenya is increasing, and as a result, most businesses are stocking sugar,” she said.
The turn-around
The implementation of Kenya’s Finance Act 2026, which increased excise duty on imported sugar by KSh40 (about Sh1,200) per kilogramme and KSh40,000 (about Sh1.2 million) per tonne, has contributed to increased informal sugar trade through the porous borders.

Figures from the Bank of Uganda indicate that sugar exports to Kenya dropped from $41.1 million (about Sh151 billion) in late 2025 to $12.11 million (about Sh44.5 billion) in the first quarter of 2026.
This was attributed to the high excise duty on sugar and the Kenyan government’s efforts to revive domestic sugar production.
The new Kenyan policy has forced Uganda to seek alternative markets, particularly in regional countries such as Rwanda, the Democratic Republic of Congo and South Sudan, among others.

However, observers say the increase in Uganda’s exports to Kenya and other regional markets is a sign that the country’s economy is beginning to recover.
Mr Muhumuza said political stability in the country was driving increased investment in the manufacturing sector, making basic goods available for the local market and creating a surplus for export.
Kenyans such as Mr Ogeya said it was time for their government to work towards ensuring low and stable sugar prices in the country.
“We who live at the border keep looking out for where prices are low. If a commodity is cheaper on the Ugandan side, we will easily cross and buy it there,” Mr Ogeya said.

Uganda’s sugar industry has since expanded, with established producers such as Kakira Sugar Works, Sugar Corporation of Uganda Ltd (Scoul)  and Kinyara Sugar Works, alongside newer factories in Kaliro, Kamuli, Buyende, Bugiri, Mayuge and Buikwe.
The expansion has increased sugar production, helping Uganda move from a sugar-deficit country to a producer with a surplus for regional markets.
 
Current trajectory
 Uganda’s sugar industry has since expanded, with established producers such as Kakira Sugar Works, Sugar Corporation of Uganda Ltd and Kinyara Sugar Works, alongside newer factories in Kaliro, Kamuli, Buyende, Bugiri, Mayuge and Buikwe.