President Museveni has backed a multi-million-dollar proposal by Egyptian investors to construct a state-of-the-art dairy processing facility in Ngoma, Nakaseke District, as Uganda aggressively hunts for new continental markets to absorb its massive milk surplus.
The processing plant, expected to handle up to one million litres of milk daily, is slated to be spearheaded by the Arab Organization for Industrialization (AOI)-a massive state-backed Egyptian conglomerate established in 1975 with vast footprints in manufacturing, renewable energy, and infrastructure.
Speaking during a high-level meeting at State House Entebbe with an Egyptian delegation led by Maj. Gen. Khaled Shokry Ghaith, a consultant to the AOI Chairman, President Museveni noted that the investment aligns with Uganda’s broader strategic shift toward commercial agricultural mechanisation and value addition.
The development comes at a critical time for Uganda’s dairy sector, which has faced intermittent trade blockades and strict quotas from traditional East African Community (EAC) partners like Kenya. By courting North African capital, Kampala is seeking to diversify its export portfolio and process raw milk into high-value powders, cheese, and butter for the broader African market under the African Continental Free Trade Area (AfCFTA).
President Museveni revealed that Uganda’s deliberate transition from subsistence to commercial farming has yielded a dramatic boom in milk volumes, positioning the country to compete with global dairy giants.
“We are now producing 5.4 billion litres a year and we are going to overtake Holland,” Mr. Museveni told the delegation, which also included Egyptian investor Maj. Gen. Abdelkader Mohamed Nagy and Mr. Abdel Nasser Mohamed. “With 5.4 billion litres, local consumption is still only about 800 million litres, meaning we have a surplus of about 4.6 billion litres.”
“The transformation from manual to mechanised systems is not a big issue. It is a question of mobilisation and investment because the manual system is the ancient way. We have been keeping cows for the last 7,000 years,” the President added.
Historically confined to domestic consumption or suppressed by colonial-era policies that prioritised cash crops like coffee, tobacco, and tea, Uganda’s dairy sub-sector has undergone rapid commercialization over the last two decades.
Beyond agriculture, Mr. Museveni linked the investment to geopolitics and the management of the River Nile resources-a frequent point of diplomatic friction between upstream East African nations and downstream Egypt.
The President argued that the ultimate protection for the Nile lies in the rapid industrialisation of countries within the tropics, which would lift populations out of poverty and reduce environmental degradation.
“I told Field Marshal President Abdel Fattah el-Sisi that if you are talking about the Nile, there must be socio-economic transformation,” Museveni revealed. “There must be electricity in the tropics so that people stop cutting trees for firewood and engage in modern agriculture like in developed countries.”
To support the proposed one-million-litre capacity plant, the President urged local farmers to abandon traditional free-range grazing, which requires large swathes of land, in favour of zero-grazing and modern pasture management.
“If you grow pasture, harvest it and feed the cows in the shed, one acre can feed eight cows. The yield will be higher because they are eating better,” he noted, adding that the government is actively working on genetic improvements to ensure local breeds produce at least 20 litres of milk per cow daily.
The Egyptian delegation confirmed they had already conducted extensive field assessments in Ngoma-the heart of Uganda’s cattle corridor-and engaged with the Dairy Development Authority (DDA).
Aside from processing, the investors plan to overhaul the local supply chain by introducing automated, hygienic milking equipment to eliminate manual handling, alongside refrigerated transport networks linking farms to cooling centres.
Welcoming the technology, President Museveni directed the Ministry of Agriculture and dairy stakeholders to immediately draft a comprehensive technical proposal mapping out the efficient movement of milk from farms to the planned factory.
Maj. Gen. Khaled Abdul Nasser expressed Cairo’s commitment to the venture, stating that the project will foster mutual economic benefits and deepen the historic ties between Uganda and Egypt.