Government Ordered To Renegotiate BIDCO Palm Growing Contract

Parliament’s Public Accounts Committee has directed government to renegotiate the BIDCOs palm oil growing contract.

The directive follows concerns that the company is not paying its fair share of taxes.

The agreement signed with BIDCO back in April 2003, provided that taxes were differed until government hands over the entire 26,500 hectares needed for palm growing.

But government seems to have failed to see this through.

According to the Auditor General’s (AG) June 2018 audit report, only 11,500 hectares have so far been availed by authorities. Of those, 6,500 hectares are in Kalangala and 5,000ha in Buvuma.

Connie Magomu Masaba, an official from Ministry of Agriculture says government is in advanced talks with BIDCO to encourage small holder farmers to join this project. This she says is imperative since efforts to raise the required land have proven abstract.

“The first phase was in Kalangala for three years. The next phase was an opportunity to further study. We studied Bukakata further. The investors looked at the area, did their own tests and reported that land was too sandy for them to grow oil palms there”, she said.

Magomu, who doubles as the Vegetable Oil Development Project (VODP) manager says Government as such has switched focus to Sango Bay.


Members of Parliament however raised concerns on the initial agreement.

Hon. Wilberforce Yaguma the Kashari North MP categorized this act as thuggery. Specifically, Yaguma asked when Ugandans will be relieved of this tax burden since the required hectares are yet to be found.

Article 5(7) of the contract stipulates that government has to pay Value Added Tax (VAT) on products envisaged under this project for eleven years commencing with that when the 26,500 hectares will be received.

“This was a plan of people to steal money until the world ends”, he said

The MP called for all officers who were involved in signing this contract at the time to be summoned and a rigorous audit to be undertaken.

Hon Nandala Mafabi the PAC Chairperson ruled that the agreement be renegotiated within six months, something which was disputed by Moses Kaggwa the director economic affairs at the finance ministry.

“We cannot come here and confirm that within six months the agreement will be renegotiated because there are two parties. What if the other party says no”, Kaggwa defers.

Hon. Mafabi asked officials to furnish the committee with critical documents and to renegotiate contract terms with immediate effect.

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