Africa-Press – Uganda. One of the greatest news to come out of Uganda in the last five years is the renaissance of the country’s coffee sector. Uganda is now one of the biggest players in Africa and globally. Unfortunately, the developments in the sector have in the last few months caused unease among stakeholders including farmers. We, as a country, risk losing the hard won gains.
The latest developments is a decision by government to enter a deal with Uganda Vinci Coffee Company Ltd (UVCCL), a privately owned firm to process and export Uganda’s coffee. Finance Minister Matia Kasaijja penned the now controversial deal on behalf of government while Enrica Pinetti signed on behalf of UVCCL in February.
Ms Pinetti is also the individual behind the multi-million dollar construction of the International Specialized Hospital which is more than two years behind deadline despite the $379 million (about Shs1.3 trillion) backing from government. This has raised eyebrows.
The deal brings to life to President Museveni’s dream of adding value to Uganda’s exports including coffee. We recommend that in our pursuit of this noble objective, we do not move blindly and create more problems that will affect a flourishing sector.
While the penning of the agreement was known in February, the details of the deal only leaked recently. UVCCL, per the agreement, will be exempted from paying import duties, value added taxes, excise duty, stamp duty, corporate income tax among others. The necessity and fairness of this is a matter of debate.
One of the top players, the Bugisu Co-operative Union (BCU), has already threatened to go to court to challenge what they have termed as an attempt to “kill coffee farming” and “make farmers slaves”. Others that have raised concern on this particular issue include Buganda Kingdom, Bulamu Coffee Buyers and Processors Limited, Uganda Quality Coffee Traders and Processors Association. Their concern rotates around the fear of creation of a quasi-monopoly to export the country’s coffee.
These allegations by top players in the sector must not just be dismissed. The cooperative and others need to be listened to and reach an understanding with government that pushes the sector forward. The news of the deal came at time when there was a debate and protests from coffee farmers following Uganda’s decision not to renew the country’s membership at the International Coffee Organisation (ICO).
Farmers and other sector players argue that Uganda cannot negotiate better terms while outside of the organisation. Government agencies behind the move including Uganda Coffee Development Authority (UCDA) insist the move is good for the country. Earlier, government had also introduced the National Coffee Bill, 2018 which was passed by Parliament in August 2020 which left more questions than answers in the sector.
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