Namulonge Land Deal:
PROJECT TO INCREASE EXPORT EARNINGS (AN AVERAGE $30M TO $120M),
ADD AN EXTRA 7,000 JOBS- A 60% FROM THE THEN 12,000 TO 19,000 JOBS
A series of misleading articles were run in local media and different social Medias smearing dirt on the idea of re-developing land on Plot No 9, Block 158, situated in the bushy and unutilized part of Namulonge called Nakyesasa by Premier Roses- a Ruparelia Group of Company, under the chairmanship of Dr. Sudhir Ruparelia.
For clarity, Chairperson and founder Ruparelia Group- Dr. Sudhir Ruparelia has for the first time spoken out on how genuine the deal was cracked and how it will benefit Ugandans, Red pepper can reveal.
“The subsequent media discussions have not fully looked into the process leading up to approval of our application- choosing to mainly focus on the presidential directive which was issued nearly after two years of extensive stakeholder engagements and scrutiny of our proposal. Worse still, there has been almost no mention of the significance of this project to not just the Ruparelia Group, but the floriculture & horticulture sectors, the local Namulonge Communities and the Ugandan economy in general,” Sudhir lamented.
Sudhir adds, that while they appreciate the role of research and development in agriculture, there is also need of matching sufficient levels of production through the expansion of the floriculture business as well as establishing a commercial vegetables-horticulture plantation. Besides Namulonge deal, recently a Public Private Partnership was reached on, between the Ruparelia Group and Kololo SS. The arrangement will see over Shs15bn injected in a sports complex for the shared benefit of both Kololo SS.S and Kampala Parents- a Ruparelia Group School.
“We are patiently committed to closing this process and developing this project in line with the laws of Uganda and in the mutual interest of NARO and the local communities of Namulonge,” Sudhir said. Sudhir further indicates that their application to put to greater use, unutilized government land is not only legal and morally upright, but it is also provided for in the Uganda Land Use Policy (2013) whose goal is “to ensure efficient, equitable and optimal utilization and management of Uganda’s land resources for poverty reduction, wealth creation and overall socio-economic development.” Section 4.16 (Clause 86) of National Land policy recognizes the “duty of government to deliver land to investors, based on a transparent criteria with due process and due diligence either from public land or government land without displacing public utility.” It’s based upon this that Premier Roses seeks to lease 900 acres of land (part of the 3,300 acres owned by government) in Namulonge, Wakiso District.
DECLINING AGRICULTURE PRODUCTION
As per the 2015/16 Budget Speech while government projected overall economic growth expected at 5.3%. Growth in the agriculture, forestry and fishing sectors combined is projected at a measly 2.3% vs. the industrial and services sector which are projected to grow at 5.5% and 5.7% respectively. In Vision 2040, government also recognizes that agriculture productivity of most crops has been reducing over the last decade mainly due to among other reasons poor production techniques, over dependency on rain fed agriculture, land tenure challenges and limited application of technology and innovation. Matter of fact, according to Uganda Bureau of Statistics between 2005 and 2010 arable land reduced by 8.6%. To correct the above, government, among others, recognizes the need to attract private sector participation in value addition activities and investments- this is mission critical especially given that seeing that agriculture employs up to 70% of the adult working population, agriculture exports from about 70% of total exports and food contributes up to 50% of entire household expenditure for some homes in Uganda. Away from all that, Sudhir further stipulates that as a country, we are suffering from a perennially weak shilling which over the last 6 months has lost nearly 30% of its value; thus the need to increase our export earnings cannot be over-stated.
HARNESSING UGANDA’S FLORICULTURE POTENTIAL
Ugandan flower export earnings have grown over the years by 64% from $34m in FY05/06 to $55.5m in FY14/15. But this is just a drop in the ocean compared to Kenya whose exports have grown by 91% from $318 million to $606million. “As a matter of fact- Uganda is about 20 years away from reaching where Kenya was 10 years ago; but we can, as a country do something about it,” said Sudhir. According to Rabobank’s World Floriculture Map- African producers such as Ethiopia and Kenya, which lie on the equator, have increased their share of world flower trade due to favorable climates, rising demand for competitively affordable flowers and availability of better logistics and handling facilities.
Kenya has for example increased its market share from 3% in 2003 to 6% in 2013- it is estimated that over 500,000 people (including over 90,000 flower farm employees) depend on the floriculture industry impacting on over 2 million livelihoods. Uganda, which ideally enjoys the same advantages as Kenya has not grown by as much- the sector only employs about 12,000, 40% of whom are employed by Premier Roses. RaboBank predicts that whereas traditional markets like the US and Western Europe are stagnating in growth, there is more growth anticipated from Eastern Europe, Russia and the Far East especially Japan and China. As such, Uganda like- Kenya and Ethiopia, have once-in a lifetime opportunity to increase production- and grab a share of the market from traditional growers such as Netherlands whose share of the market has been steadily declining. There are no two ways about it- Uganda must expand production!
NEED TO EXPAND PREMIER ROSES
Given the changing tides that for once are in favour of East African growers, Premier Roses sought to expand our production capacity and was in need of approximately 1,500 acres of land. Land fragmentation as a key inhibitor of advanced and mechanized agriculture is well documented- making government perhaps the only source of such vast amounts of land.
After unsuccessfully trying to locate such amounts of commercially viable land from the private sector, on 5th of August 2013 Premier Roses wrote to the Minister of State for Agriculture expressing interest to lease and develop approximately 1,200 acres of arable land at Plot No 9, Block 158 at Namulonge for the expansion of our floriculture business as well as establish commercial vegetables/horticulture plantation. In their proposal, Premier Roses- which already owns 60 hectares of greenhouses and produces 13 million of cut-rose stems per month with a 35% market share detailed plans to invest in excess of $100m over 4 years.
“In particular we sought to use about 500acres for tomatoes, chilies, pepper, cucumber and salad and 200 acres for growing selected herbs & spices, while 300 acres would be used for growing guava & water melon. The remaining acres would be used for storage facilities, a pack house, processing plant, offices, staff houses, a health center, laboratory, vocation training center, parking space, recreational facilities and a school for children of our staff,” Sudhir added.
INCREASE IN EXPORT EARNINGS, ADD AN EXTRA 7,000 JOBS
The planned investment would increase Uganda’s flower acreage from the current 170hectares to over 500 hectares. The project would also increase export earnings from (an average $30m then to $120m a year in 4 years) and would also add an extra 7,000 jobs- a 60% from the then 12,000 to 19,000 jobs.
More importantly, with Ethiopia entering the flower market- increasing Ugandan production was crucial in keeping Uganda in the flower business as consistently low production would force our buyers to look elsewhere so as to benefit from economies of scale. The project would also open up local community opportunities by providing out-grower opportunities to local farmers.
TRANSPARENCY & DUE PROCESSES FOLLOWED
Following receipt of the application, ministry of agriculture carried out various consultations with NARO and Ministry of lands and there is documented proof of the same, according to Sudhir. On 1st October 2013, Ruparelia also wrote to the Minister of State for Investment at Ministry of Finance, expressing their interest in the said land with detailed investment plans and projections inclusive.
“The Minister of state in mid-October in a “no objection” letter wrote to the Minister of Lands and recommending that our application be considered because of its merits to the economy. The Minister of Lands then wrote to the Chairman of Uganda Land Commission asking them to evaluate and consider our proposal and take the necessary action. Six months later, in April 2014, after a rigorous study of our proposal, the Uganda Land Commission approved a 5 year lease term, extendable to full form- but only granted to us 900 acres instead of the applied-for 1200 acres on condition that we enter into a MoU with NARO on how both institutions would mutually benefit from the project,” he said.
He also explains that in the course of their work, their application was considered and given a no-objection by the Ministers of investment and Lands as well as the Uganda Land Commission who consulted the NARO board and MAAIF. The Chairperson of NARO Governing Councils on record, in his letter, Ref 03 0000 dated 14th April 2014 addressed to the Minister of Agriculture and copied to the Minister of Lands said that given the pressures from land grabbers entering into an agreement with the private sector on clear terms on which to utilize the land was more preferable. It should be noted that about 1,000 acres had already been irregularly grabbed by different developers in Namulonge Township and in 2011; the Wakiso District Land board irregularly attempted to allocate 8 parcels of the land to private developers, but was thwarted by the Uganda Land Commission. It is also important to note that, all this time, (nearly 2 years) the His Excellency the president was not involved. However, following the April 2014, decision by Uganda Land Commission, the Minister of Lands on 27th June 2014, wrote to the president seeking his guidance on the final decision by ULC.
The president, 9 months later and after extensive consultations, on 12th March 2015, wrote to the minister of lands and ministry of agriculture) asking that our application be given due consideration. Subsequently the minister of agriculture on 23rd June, 2015 wrote to NARO instructing them to work out a Memorandum of Understanding with Premier Roses on this collaborative venture. While we wait for the finalizing and signing of this MoU which will guide how both NARO & Premier Roses will mutually benefit from this project, we wish to reiterate our commitment to this project. We have already secured the necessary resources to finance this development without any further delay.