KAMPALA, October 31, 2026 — Government has secured a four-month suspension of the planned auction of Igara Growers Tea Factory Limited by DFCU Bank as it moves to address the factory’s financial and governance challenges.
This was achieved during an emergency high-level meeting at Parliament involving Deputy Speaker Thomas Tayebwa, Minister of Finance, Planning and Economic Development Henry Musasizi, Permanent Secretary and Secretary to the Treasury [PSST] Ramathan Ggoobi, Members of Parliament [MPs] from tea-growing constituencies, DFCU Bank officials and representatives of Igara and Buhweju tea factories.
The meeting, held on Thursday in the Deputy Speaker’s office, followed an auction notice published on October 7, 2026, by S&L Advocates on behalf of DFCU Bank, seeking to recover an outstanding mortgaged loan of Shs 5 billion.
However, financial disclosures presented during the meeting indicated that Igara Tea Factory’s cumulative liabilities exceed Shs 25bln, including unremitted statutory obligations, unpaid green leaf deliveries and other operational debts.
“This morning, together with Hon. Henry Musasizi, Minister of Finance, Planning and Economic Development, PSST Ggoobi, and MPs from the tea-growing areas of Greater Bushenyi and Tooro, we held a meeting with officials from Igara Tea Factory and DFCU Bank at my office in Parliament,” Tayebwa said after the meeting held yesterday.
“The government is fully aware of these challenges and is working to address them.”
Four-month auction suspension agreed
Following negotiations between government officials, legislators and DFCU Bank executives, the bank agreed to suspend foreclosure actions, asset inspections and public auction proceedings against Igara Tea Factory for four months.
The suspension is intended to give the Ministry of Finance time to undertake verification audits, structure government relief measures and support efforts to resolve the factory’s governance challenges.
“We discussed the challenges facing the factory, particularly its debts and the need for tax relief, as well as ways to expedite efforts to restore its operations to normalcy,” Tayebwa said.
“I’m glad we have agreed on halting the auction of the factory for four months as the government finalizes efforts to intervene.”
Tayebwa said any government financial support would be accompanied by comprehensive audits and stronger governance arrangements.
“The government is committed to supporting tea factories across the country while also auditing them and requiring them to establish stronger governance structures to ensure sustainable operations,” he said.
“The government recognises the critical role tea plays in our economy, and we cannot allow our tea factories to collapse.”
He said government had already delivered fertilisers promised to tea farmers and urged growers to remain hopeful as further interventions are pursued.
“To all tea farmers in Greater Bushenyi and across the country, remain hopeful—governance support is on the way,” Tayebwa said.
MPs reassure tea farmers
The development has provided relief to smallholder tea farmers in Bushenyi, Sheema, Buhweju, Mitooma and Rubirizi districts, some of whom have reportedly faced losses after green leaf deliveries were affected by factory closures.
Bushenyi-Ishaka Municipality MP Idi Basajjabalaba said the agreement had averted the immediate threat of liquidation of the factory.
“Today we had a good meeting with Deputy Speaker Rt. Hon. Tayebwa, the Minister of Finance, PSST Finance, DFCU management, Igara-Buhweju tea management, and Members of Parliament from tea-growing areas, and we have closed this issue of DFCU selling Igara and Buhweju tea factories. That will not happen,” Basajjabalaba said.
He thanked government and DFCU for agreeing to suspend the auction and urged farmers and shareholders to support efforts to strengthen the factory’s governance.
“I encourage all the farmers to elect good leaders on the board as we process the government bailout quickly,” Basajjabalaba said.
“We have agreed with the bank and management on what to do, and therefore the farmers’ factory is safe. Supply the green leaf as we process the bailout.”
Basajjabalaba said Parliament and government would continue prioritising the tea sector and protecting the interests of farmers.
Tea sector faces wider financial pressure
The crisis at Igara Tea Factory comes amid wider financial pressures facing Uganda’s tea industry, including depressed black tea prices at the Mombasa auction, rising fertiliser costs and high energy tariffs.
Government has previously announced plans to write off more than Shs35 billion in tax arrears owed by tea processors as part of efforts to stabilise the sector.
The government has also announced a Shs 212bln sector investment package and proposed a Shs 152bln presidential bailout, which is undergoing verification by the Auditor General.
However, access to government support has been linked to verified governance structures and financial accountability.
At Igara, the process has been complicated by corporate disputes and a Uganda Registration Services Bureau [URSB] electoral roadmap for the election of a substantive board, which runs until January 6, 2027.
The four-month suspension of the auction is therefore expected to provide time for government, the bank, farmers and factory management to address the outstanding financial and governance issues while efforts to restore tea processing operations continue.
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