By NANGAYI GUYSON
Kampala, Uganda - Ugandan lawmakers are pushing for the termination of a government agreement that grants a single corporation exclusive rights to buy the country's coffee, an arrangement that is considered as unfair to local exporters.
Uganda’s Finance Minister Matia Kasaija and an Italian investor Ms Enrica Pinetti signed a Shs 284 billion coffee processing deal on February 10 to process and export Ugandan beans to Europe and the Middle East.
It was later discovered that the said investor whom the government gave free land to construct a product processing plant, valued at $80 million is broke and mortgaging the same to acquire a loan so that It can start buy Uganda’s coffee.
Various players in the agricultural industry have criticized the arrangement. The Finance Ministry was chastised for failing to consult all coffee industry stakeholders before signing on their behalf.
Kasaija signed on behalf of the Ugandan government in the presence of Ramathan Ggoobi, the Secretary to the Treasury.
However, it was discovered that Pinetti, the claimed owner of Uganda Vinci Coffee Company Limited (UVCC), signed the Coffee processing contract as a witness, generating fresh issues about who is the firm's true owner.
Eveln Anite, the State Minister of Finance for Investment and Privatization, stated that she just learned of the arrangement through the media.
Frank Tumwebaze, the Minister of Agriculture, denied any role in the signing of the coffee transaction.
He stated that his ministry was not involved and that any concerns should be directed to the Finance Ministry.
This prompted the Parliament's trade committee to investigate the terms of the "contentious" February agreement with Uganda Vinci Coffee Company Ltd., according to a statement on the Kampala-based legislature's website, quoting Speaker Anita Among.
According to Ramathan GgoobiG, Permanent Secretary to the Ministry of Finance, the coffee agreement will help the government meet its goal of increasing coffee production from 7 million bags per year to 20 million bags by 2030.
According to a statement released by the Finance Ministry and Uganda Vinci, no one will be able to buy the country's harvest until "this firm gets the quota they want." He added Uganda Vinci had the right to set the price of the item, but this has not gone well with many local farmers in Uganda.
Uganda Vinci is expected to build the country's first final product processing plant, valued at $80 million, under the agreement, which also exempts the firm from all taxes, according to the finance ministry.
The agreement is seen as a critical component of the government's plan to increase coffee production to 20 million bags per year by 2030.
In a tweet, the finance ministry stated, "Uganda Vinci would pay a premium price for superior quality coffee beans, which will be calculated transparently and not lower than the price permitted by Uganda Coffee Development Authority."
Green coffee exports will continue and be determined by market conditions, according to the statement.
The President had early requested MPs to endorse the arrangement, but after strong opposition from the people's representatives, he charged the Attorney General with addressing the concerns.
President Museveni and the ruling National Resistance Movement (NRM) party Caucus agreed on Wednesday 27th, April to review the coffee deal's disputed provisions after legislators raised vociferous objections to sweeteners offered to the Italian investor, including a decade-long tax exemption and an alleged market monopoly.
The government has now formed a ministerial committee that includes representatives from the Energy Ministry, Agriculture Ministry, Finance Ministry, Works Ministry, and the Attorney General's Office.
Attorney General Kiryowa Kiwanuka, the government's top legal adviser and a signatory to the coffee transaction with Ms Enrica Pinetti's Uganda Vinci Coffee Company (UVCC), told this newspaper last night that he found no flaws in the deal.
The Uganda Coffee Development Authority (UCDA) Executive Director approved the coffee agreement that the Ugandan government signed with Uganda Vinci Coffee Company, which is owned by Italian investor Enrica Pinetti.
Some clauses of the memorandum of understanding have been interpreted to provide the investor long tax exemptions and an apparent monopoly, according to members of Parliament's Committee on Trade, Tourism and Industries, who are probing the arrangement.
The UCDA executive director, Dr. Emmanuel Iyamulemye, told MPs that the arrangement did not violate any terms of the Coffee Act and that it was a "excellent bargain" for Uganda's coffee sector's growth.
Uganda's coffee trade has been liberalized, and growers now receive roughly 80% of the export price, according to the country's coffee regulator.
The majority of the crop is exported to nations like as Italy, Germany, the United States, and Spain, and the country might generate up to 9.1 million 60-kilogram bags in the year through September.
