What is the overall strategic issue in oil palm in Uganda to justify all these incentives ?
It is one of the best things that has ever happened to this country. Supposing you were living in Kalangala where there is no road, no electricity or even a ferry and government says now we have identified an economic activity that we believe will justify
investment in roads, ferry, electricity and weather station?
Look at it from the perspective of an ordinary Kalangala resident; what does that mean to you?
Tourism will grow up and their fish will quickly get to the market.
Remember that it is still the obligation of government to extend these things to Kalangala.
Other than you Mr Mwenda who calls this a scam, people should be hailing government and asking it to replicate this in other areas. For the first time government is directly investing in the growth of economy in areas that are distant.
There are many actors in the vegetable oil industry paying all their taxes, buying land. In this agreement government has given Bidco 26,500 hectares of land for free.
Again that is one of your misconceptions. We do not give Bidco land for free. But even if we did, what would be wrong with government getting a piece of land that is available and give it to an investor who is going to creat jobs, expand this economy and increase the revenue base?
There are other stakeholders who produce vegetable oil, spend money to buy land but you are selecting one investor to give free land.
Show me an investor who is going to make an investiment of $100 million and wait for thirteen years to get returns and I will give that investor the same incentives, same encouragement, same public investment package as I have given Bidco.
Mukwano.
Well, Mukwano has sustained this country a lot and he has imported for a long time with the support of government. I want to repeat with the support of government, Mukwano set up a soap factory, with the support of government we have been treating the importation of palm oil and palm-starlin the raw materials used to make soap and oil, we have been facilitating and allowing Mukwano to import these as raw materials. we as government have given incentives to Mukwano to be able to supply this country with soap and cooking oil.
One question, if you were minister of planning, for how long would you want your country to import raw materials to make soap?
You know that the incentives given to Bidco mean that you are likely to wipe out other players from business.
Why didn't you consult other stakeholders before you went into this project?
I am not pursuaded that for a man who is coming in to plant palm trees and produce the raw material that makes soap is going to wipe out some body who is importing raw material making soap.
On the contrary the man who is making soap now is importing the raw material from Malaysia would get it from here on the Islands.
I hope you are not saying Bidco is doing Uganda a favour
Oh yes ! It is and extreemly. Any investor does Uganda a favour to come and invest in Uganda. Didn't you know that?
Do you think that we can do without investment or do you think that there are investors lining out there and we are the ones doing them a favour?
They are the ones doing us a favour this is a high cost country in terms of production.
We are land locked so it is more expensive to produce here than in Kenya.
In the first year Bidco will bring in $21 million, in the second year $5.8 million, in the third year $6 million, in the forth year $16 million and in the fifth year $12 million.
Are you saying that people like Mukwano are not investing this amount of money on yearly basis afterall Bidco's $100 million spreads over a period of ten years?
This is not under the carpet. This is to the knowledge of all that this is a regime that will be given to anybody who is investing in plantation agriculture that has a gestation period this long.
I understand Uganda's macro-economic strategy is export-led growth, but the way I see this project, you are aiming at import substitution. Where are we standing?
It is not import substitution. Kenya does not produce palm-olin or palm-starlin they too import from Malaysia. This thing which they use for making Kimbo, Cow-boy and so on, they import. So if it is produced here, the Kenyans will get it from here.
We were discussing the Customs Union and it is one of the things we have insisted on.
We have told them in the next seven years, or so we will have started producing palm oil and palm-starlin, therefore we need to ensure that within the region of East Africa this is a raw material that can be sourced locally and therefore should be protected when it is up and going.
So it is not just that we are going to import substitute, we are also going to export to Kenya and Tanzania.
