BUSHENYI, October 21, 2026 — More than 7,000 smallholder tea farmers from south-western Uganda have called for urgent intervention from President Yoweri Museveni to save Igara Growers Tea Factory Limited from a looming auction over an outstanding loan of Shs 5 billion owed to DFCU Bank.
The farmers convened an emergency meeting at Mary Karooro Memorial Stadium in Bushenyi Town on Monday to devise a rescue plan for the 57-year-old enterprise, following a 30-day foreclosure notice and an auction scheduled for November 6, 2026.
The meeting follows a public auction notice published on October 7 by S&L Advocates, acting on behalf of DFCU Bank, seeking recovery of the outstanding loan secured against the company’s assets.
While the bank’s immediate claim stands at Shs 5 billion, stakeholders and financial disclosures cited at the meeting indicate that the factory’s total liabilities, including unremitted statutory obligations, unpaid payments for green leaf deliveries and operational debts, exceed Shs 25 billion.
The auction notice states: “Upon instructions from our client, a financial institution and registered mortgagee, we shall proceed to sell the undermentioned properties together with developments thereon by public auction unless the debtor pays to us all outstanding loan balances, fees, costs, and disbursements before the expiry of 30 days.”
It further requires occupants to vacate the properties within seven days of the notice to allow prospective buyers to inspect the assets.
Farmers also seek court order to prevent factory auction
The emergency meeting was convened by Mzee Eliab Muhoozi, a founding shareholder, former board director and tea grower from Kyamuhunga Subcounty.
It brought together leaders and stakeholders from the Greater Bushenyi sub-region, including Willis Bashaasha, Ronald Rwankangye, Agaba Turikwendera, Prof. Tarsis Kabwegyere, Prof. Abel Mucunguzi and former board member Muhangisa.
In his appeal to shareholders, Muhoozi urged them to unite to prevent the factory’s collapse.
“Fellow shareholders, I call upon all shareholders to attend this emergency meeting and devise ways of saving our company from being sold by creditors,” he said.
“Saving the factory from the scheduled November 6, 2026, auction requires our collective action. All shareholders must come with valid membership cards and maintain peace.”
After deliberations, the meeting adopted two key resolutions: to appoint Muhoozi to lead a select committee of prominent tea farmers in petitioning President Yoweri Kaguta Museveni for urgent government intervention, and to seek a court order allowing shareholders to convene an Extraordinary General Meeting [EGM] to elect a substantive board of directors.
The shareholders said the proposed EGM would help address what they described as a leadership vacuum at the factory.
Board leaders accused of financial mismanagement
During the meeting, shareholders expressed concern over reports that the factory had not made any loan repayments to DFCU Bank’s recovery account since March 2026, a development they said had triggered the foreclosure process.
The assets at risk reportedly include the main processing plants in Kyamuhunga and Buhweju, forest plantations, real estate holdings and tea estates.
Several shareholders accused current and former board members of financial mismanagement, alleged over-invoicing in land purchases and presenting falsified financial reports at previous Annual General Meetings to conceal the company’s financial position. The allegations were raised by shareholders and were not independently verified.
Agaba Turikwendera, a shareholder, said efforts to demand greater financial accountability had been met with resistance.
“The problems that have brought Igara Tea Factory to the brink of collapse started a long time ago. When we began advocating for a forensic audit, the leadership resorted to blackmailing us,” he said. “Now, the consequences are there for everyone to see.”
Bashaasha, Director of the Manifesto Implementation Unit in the Office of the President, said attempts to push for a special general meeting had been frustrated.
“Anyone who raises questions about accountability and governance is immediately labelled a politician,” he said. “Our efforts to demand a special general meeting to restore proper administration have consistently hit a snag.”
The financial crisis has affected tea growers in Bushenyi, Sheema, Buhweju, Mitooma and Rubirizi districts, with some suppliers reporting that they had gone more than five months without payment for green leaf deliveries.
Tea farmer Alfred Musiime blamed the factory’s leadership for failing to protect farmers’ interests.
“The people we expected to be educated are the ones who have let us down,” he said. “We saw how some people bribed their way onto the factory’s board, and now farmers are left without an income.”
Another farmer, Ronald Monday, called for investigations into the factory’s financial affairs.
“The board members need to be arrested and made to account for how this borrowed money was used,” he said.
Former Cabinet minister Prof. Kabwegyere said the factory’s governance problems worsened when leadership moved away from active tea growers.
“The President needs to know how the collapse of this factory started,” he said. “Entrusting the leadership of a farmer-owned cooperative to people who are not active tea growers contributed immensely to this downfall.”
Unpaid farmers, workers face economic hardship
The factory’s operational difficulties have affected businesses in tea-growing communities, including Butare, where traders have reportedly experienced a sharp decline in economic activity.
The disruption has also affected factory workers and young people who depend on the enterprise and the wider tea value chain for their livelihoods.
To prevent the factory’s assets from being sold, shareholders proposed temporary government intervention to facilitate an independent forensic audit and explore alternative ways of settling the bank debt without disposing of the main processing facilities.
They also suggested examining whether other assets and associated entities, including the Igara-Buhweju Tea Farmers [IGABU] SACCO, the company’s security subsidiary and its Kampala office properties, could be used in a lawful debt-restructuring arrangement.
Igara West MP Cohen Kyampene and Bushenyi District Woman Member of Parliament Annet Mugisha said they were engaging government officials and parliamentary committees in efforts to halt the November 6 auction.
Tea sector challenges compound factory’s woes
Igara’s financial difficulties come amid wider challenges in Uganda’s tea industry, where low black tea prices at the Mombasa auction, rising fertiliser costs and high energy expenses have put pressure on processors.
The Government previously announced plans to write off more than Shs 35 billion in tax arrears owed by tea processors and outlined a Shs 212 billion investment package for the sector. A separate proposed Shs 152 billion presidential bailout was also reported to be subject to verification by the Auditor General.
However, access to government support depends on the applicable verification requirements, including the establishment of credible governance structures and operational stability.
Meanwhile, a Uganda Registration Services Bureau [URSB] roadmap for electing a substantive board reportedly runs until January 6, 2027, raising concerns among shareholders about the factory’s future if the auction proceeds before a new board is in place.
The farmers are now counting on government intervention and negotiations with DFCU Bank to prevent the sale of the factory’s assets and protect the livelihoods of thousands of smallholder growers who depend on the enterprise.
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