Govt to sue two tobacco companies over sh11b debt

Government is contemplating whether to sue two private tobacco trading companies over sh11.2b debt owed to Bunyoro region outgrowers.

On Friday, Finance Planning and Economic Development minister, Matia Kasaija, told the press at Uganda Media Centre in the capital Kampala, that such an option was open.

However, Kasaija said for starters, the management of Continental Tobacco Limited and Nimatabac Tobacco Company, would be summoned to agree on a lasting solution.

The debt arose from an undertaking between 2017 and 2019, when the two companies contracted the outgrowers but failed to pay.

The minister said in the event that the talks fail, government will have no other option but to recover the money through the courts of law.

"Government is considering suing these companies to force them to pay. First of all, we shall write to them for discussions. If they refuse, then we shall move to court," said Kasaija.

He explained that the predicament and incessant calls for financial rescue from the 10,000 outgrowers, compelled government to shoulder the burden.

Last year, President Yoweri Museveni directed Kasaija, and Trade, Industry and Cooperatives minister, Amelia Kyambadde to scrutinise the plight of the Bunyoro sub-region tobacco farmers.

Kasaija observed that even as government shoulders the burden, it is incumbent upon it to recover such taxpayers money.