Empower local investors to have say in economy
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, 2022. PHOTO | COURTESY
What you need to know:
- The issue: Local investors
- Our view: People in government need to wake up to the fact that what is good for foreign investors is good for local investors too. Government good do well to borrow a leaf from South Africa’s Black Economic Empowerment policy.
On Thursday, Ministry of Finance and Uganda Vinci Coffee Company Limited, owned by Italian business personality Enrica Pinetti, signed an agreement that is meant to pave way for the establishment of a coffee processing plant in Kampala Industrial and Business Park Namanve.
The signing of the deal is the latest development in a story that commenced in July 2014 when President Museveni hosted a delegation of Italian investors who, according to a State House statement, demonstrated “seriousness” by roasting coffee beans using a mini roaster and made the President taste “different delicious samples that excited him a great deal”.
We shall not go into whether that would be a worthy criteria by which one’s seriousness, commitment and competence can be measured. It is, however, disturbing that Vinci Coffee has been benefitting from tax waivers since about June 2014.
That must feel like a kick in the teeth for local entrepreneurs such as the proprietor of Good African Coffee, Mr Andrew Rugasira, who was the first Ugandan to sell processed coffee in supermarkets in the United States of America (USA) and the United Kingdom (UK).
Mr Rugasira did not enjoy any tax waivers from government like Vinci Coffee has been enjoying.
The President, who had been advocating for addition of value to our coffee, did not commit himself to provide Good African Coffee “with all the necessary assistance to ensure that the project takes off soon” as he has done with Vinci Coffee.
As Mr Rugasira battled to put Ugandan coffee on shelves in the West, Uganda Revenue Authority (URA) was unrelenting in its demand for taxes, at a time when Good African Coffee could have benefitted from the kind of support that government has been giving the likes of Vince Coffee.
URA eventually closed several Good African Coffee outlets in Kampala and its factory too. That story is not peculiar to Good African Coffee.
It has been replicated with so many Ugandans who have tried their hand at manufacturing, which has unfortunately handed foreign investors the initiative.
People in government need to wake up to the fact that what is good for foreign investors is good for local investors too.
Government could do well to borrow a leaf from South Africa’s Black Economic Empowerment (BEE) policy and work to empower local entrepreneurs and investors to have greater say and control of the economy.
