Meridian Tobacco Company and Arua District’s Social & Economic Development
How MTC Made a Difference in Northern Uganda
The Ugandan Context
Uganda has a rapidly expanding population of 41 million people. Uganda is challenged in terms of employment-creation. This is because the country’s population is young, with millions of young people regularly entering the market.
In fact, Uganda is the world’s second youngest country. According to the 2014 Census, a total of 75 percent of Ugandans are below the age of 30 years.
The Arua District Context
Much of Arua District is rural, with over 80 percent of the economically active population engaged in agriculture. Most farmers produce their crops on small plots, using traditional tools. The farming community also relies on natural weather which is not easily predicted. Both the national and district governments seek to improve the region’s livelihoods by agricultural modernization.
Meridian Tobacco Company’s Investment & Capacity
Meridian Tobacco Company (MTC) is a US$20 million complex based in Arua, engaged in tobacco growing and processing. MTC began production in 2014 currently consisting of 32,000m² manufacturing facilities and storage. MTC has a processing capacity of 30 million Kgs per year of tobacco.
MTC’s Role In the Development of Arua District and West Nile Region
MTC contributes to Arua’s and West Nile’s development process in four ways, namely, 1) direct employment and seasonal employment, 2) farmer development program, 3) services, and 4) corporate social responsibility.
1. Direct & Seasonal Employment
With regards to direct employment, MTC has 350 permanent staff. In the case of seasonal employment, the company employs 1,700 men and women – all from Arua and its neighbouring communities. The MTC’s labor force is largely drawn from Arua and the broader West Nile region.
2. Farmer Development Program
The number of contracted farmers participating in MTC farmer program has grown tremendously to almost 10,000. In West Nile, contracted farmers increased from 4,591 in 2016 to 7,200 in 2017.
Contracted farmers in Middle North increased from 1,329 in 2016 to 2,500 in 2017. The total number of contracted participating in MTC farmer program is 9,700. And the farmers will do well financially. The MTC farmers are expected to earn US$7.5 million in 2017.
3. Services
MTC has had a significant spinoff effect on the economy of Arua District and West Nile. To begin with, over 90 percent of the required materials used by the company is sourced in Uganda and especially in Arua. Begin with the MTC workforce that incorporates 350 permanent employees, 1,700 seasonal workforce, and 9,700 contracted farmers. The combined number of people making a livelihood from MTC is 11,750. According to the 2014 Census, the average size of a household in Uganda is 4.7 – which means that the 11,750 persons earning a living from MTC support 55,225 people.
MTC has stimulated the region’s economy in other ways. A good example is the transport sector. MTC operations require over 2,500 trucks annually to transport raw materials as well as finished products. These activities have a spinoff effects on fuel consumption, accommodation, and associated general services.
4. MTC’s Corporate Social Responsibility
MTC’s corporate social responsibility is divided into two main areas – food security and afforestation.
With regards to food security, MTC trains over 1,500 farmers per year on good agricultural practices. • Over 20 different crops cultivated under good agricultural practice • Practical demonstration is provided on more suitable plant population, crop calendar, and disease control. • Training and distribution and use of organic fertilizers is equally important. • So is inter-cropping, clean and reliable water supply including wells, and • Masonry.
With regards to afforestation, MTC has accomplished the following: • 2.2 million tree seedlings distributed every year. • 1.8 million seedlings to farmers. • 500,000 seedlings planted on company land. • 200,000 seedlings distributed to schools, churches, hospitals, public institutions. • Capacity building of local non-government organizations that provide technical support to schools to ensure that trees are nurtured.
MTC IS A GOOD CORPORATE CITIZEN
MTC is a good corporate citizen in at least two important ways. Good corporate citizenship means taking responsibility of businesses beyond profit motives. The purpose of good corporate citizenship is to assist local communities lift themselves from poverty to higher quality of life. In its short 3 years of operations, MTC has made a good start, firstly, by providing livelihoods to 11,750 persons, who in turn support 55,225 people. Secondly, over 97 percent of MTC’s products are exported. This is a significant contribution to Uganda's foreign exchange earnings.
