Kanungu : Fresh cracks have emerged in the Shs68 billion Kanungu tea nursery compensation saga, after beneficiaries accused lawyers and association leaders of denying deductions they say were taken from their payouts.
The dispute is laid out in a May 7, 2026 letter in which former Attorney General Kiryowa Kiwanuka briefed President Museveni on complaints raised by Kanungu tea nursery operators over compensation paid under a court settlement.
Kiwanuka said the matter arose from two cases filed by nursery bed operators against NAADS, the Attorney General and Kanungu District Local Government over tea seedlings supplied under the Tea Development Project.
The claimants had sought about *Shs157.17 billion*. Government later settled through a consent judgment worth Shs69.27 billion and has so far released Shs68.25 billion in instalments.
Under the judgment,all outstanding payments were to be deposited into an account designated by the claimants. The account provided was Pathways Advocates’ Client Account at NCBA Bank, Nakasero Branch. The Attorney General said all payments were made through that account on the claimants’ instructions.
The controversy centres on what happened after government released the funds.
Kiwanuka said his office wrote to Pathways Advocates on April 20, 2026 following concerns that some funds due to nursery operators were being withheld. A meeting was then held on April 29 with representatives of the operators and their lawyers.
At that meeting, both the legal representatives and the operators’ leadership denied allegations that 30 percent had been deducted from beneficiaries’ money. They also submitted a list of nursery operators said to have already been paid.
That position has been challenged by beneficiaries in Kanungu,some of whom insist they were charged before receiving their money and many more others have never been paid any coin.
Some claim the deductions went beyond the 30 percent figure initially raised, with fresh allegations suggesting more than 40 percent was taken in certain cases.
The contradiction creates a major gap between what was formally presented to the Attorney General’s office in Kampala and what some beneficiaries on the ground say happened during payment.
It also shifts scrutiny to the chain of payment after funds left government hands and were deposited into the claimants’ designated account.
Kiwanuka said the matter has been referred to the State House Anti-Corruption Unit [SHACU] together with documents submitted by the claimants’ side. Further action will depend on the outcome of investigations that have been ongoing.
The probe report will test the accountability of the payment chain after government exited the process and could determine whether hundreds of farmers got the full compensation they have waited more than a decade.
