Coffee deal brews controversy

Finance minister Matia Kasaija (2nd left) exchanges documents with Ms Enrica Pinetti (right) after signing an agreement with the Finance ministry to establish a coffee processing plant in Uganda, on February 10. PHOTO / FILE

What you need to know:

  • Opposition lawmakers led by Shadow Agriculture minister Abed Bwanika say the deal was done without involvement of Parliament and the Attorney General.

A multibillion deal to process Uganda’s coffee has continued to stir controversy in the country, as well as government, where senior officials in a rare public show of independence, have indicated Opposition to the same, questioning its value and significance to Uganda’s coffee sector.

Mr Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury in the Ministry of Finance, is expected to address the country on the matter later today, including the prevailing economic situation.
 On Tuesday, it emerged that Parliament Speaker Anita Among had directed the Parliament Committee on Trade, Tourism and Industry to probe the contentious coffee agreement signed between government and Uganda Vinci Coffee Company Limited, a privately owned firm, to process and export Uganda’s coffee.

Finance minister Matia Kasaijja signed the controversial deal on behalf of government while Enrica Pinetti signed on behalf of UVCCL in February. 
Ms Pinetti is the individual behind the multi-million dollar construction of the International Specialised Hospital, which is more than two years behind deadline despite the $379 million (about Shs1.4 trillion) backing from government.  
Ms Pinetti’s firm, according to the secret agreement, whose details have since been leaked to the public, will be exempted from paying for import duties, value-added taxes, excise duty, stamp duty, corporate income tax, among others.  

Ms Pinetti is reported to be a close friend of President Museveni and has previously caused a senior official in the Finance Ministry to be sacked.
In a series of tweets on Wednesday, Agriculture minister Frank Tumwebaze said neither he nor the Agriculture ministry was privy to the agreement.
“...Be advised that neither myself nor the Ministry of Agriculture  is a party/privy to that agreement. It was signed on behalf of the government of Uganda by the Finance Ministry. So I advise that all queries regarding the same be directed to the Ministry of Finance for correct information and reporting. Thank you!”

Opposition law makers led by Shadow Agriculture minister Abed Bwanika have also questioned the deal’s legality insisting that it was signed without the involvement of Parliament and the Attorney General.
In response to the tweet by Mr Tumwebaze, the Sheema Municipality MP, Mr Dickson Kateshumbwa, raised questions about the agreement.

“That agreement violates the PFM Act [Public Finance Management Act] and undermines economic liberalisation. We have had a success story in the coffee sector and creating a monopoly without clear justification will have negative consequences on the sector,” he said.
Several top players in the coffee sector have already proposed the deal and other new developments in the coffee sector which they say are likely to push back on the gains the country has made in reviving the sector.
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They include the Bugisu Co-operative Union (BCU), which 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 issues on the agreement are Bulamu Coffee Buyers and Processors Limited, Uganda Quality Coffee Traders and Processors Association.  The players also fear the creation of monopoly in the sector.

The news of the government agreement with UVCCL came amid debate and protests from coffee farmers following Uganda’s decision not to renew the country’s membership at the International Coffee Organisation (ICO). There is also the controversial National Coffee Bill, 2018 which was passed by Parliament in August 2020 which has been questioned by players, especially Buganda Kingdom.