Business 12 April 2026 Daily Monitor (Uganda)
Uganda Tea Sector Urges Quick Release of Shs152b Bailout Amid Fragile Recovery
The Uganda Tea Association is pressing the government to expedite Shs152 billion in working capital support to bolster the tea industry's recovery from global shocks that slashed prices to $0.50 per kg and cut production by a third. Officials warn delays could jeopardize progress, while highlighting partnerships for better financing and a shift to direct exports. Source: https://www.monitor.co.ug/uganda/news/national/tea-sector-seeks-shs152b-bailout-to-sustain-recovery-5421462
Uganda’s tea industry is on a tentative path to recovery after global conflicts like the Russia-Ukraine war and Middle East unrest hammered prices and operations. Uganda Tea Association (UTA) chairperson Victoria Ashabaahebwa noted production fell from over 60 million kg to about 40 million kg annually, with factories closing temporarily and scaling back.
At the crisis peak, tea prices dropped to as low as $0.50 per kg, squeezing smallholder farmers and producers. In 2023, UTA proposed short-, medium-, and long-term fixes, including 30% of needed working capital for factories to buy green leaf from farmers. President Museveni committed Shs152 billion for this, plus fertiliser subsidies, but UTA now calls for swift disbursement to avoid setbacks.
The sector, representing 22 companies and 36 factories, faces high costs, labour shortages, poor roads, and credit access issues. Despite this, 2025 saw prices rise over 20%, beating regional rivals, with 90% of output sold at Mombasa auction.
UTA is partnering with banks like Diamond Trust Bank (DTB) for tailored financing, drawing from Kenyan successes. A new five-year plan targets financing, logistics, market access, and value addition to cut reliance on bulk auction exports in favour of direct buyer links.
Kayonza Growers Tea Factory’s board chair Grace Kyomugisha says this year’s Shs26 billion fertiliser allocation falls short, urging simultaneous bailout and subsidy rollout. State Minister for Agriculture Bwino Fred Kyakulaga outlined a Shs310 billion plan treating tea as strategic, including Shs46 billion yearly for fertilisers, Shs152 billion bailout, and Shs112 billion for seedling debts.
Kyakulaga stressed industry discipline on quality and plucking standards for global edge, plus government efforts for a national commodity exchange to enable direct quality-based trade.
Source: Daily Monitor (Uganda)