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Coffee farmer Robert Kabushenga in Uganda’s Wakiso district is among the coffee producers who are upset about the country’s decision last month to withdraw from the International Coffee Organization, or ICO.

Uganda says tariffs and other barriers restricting its coffee exports triggered the decision to withdraw from a two-year extension of ICO’s 2007 international coffee agreement.

But Kabushenga describes the decision as reckless and illegal, telling VOA it will harm Uganda coffee farmers.

“How does that affect the farmer? It means that the coffee buyer who has been buying can only buy the coffee he can sell because there he is sure he has a contract," Kabushenga said. "He’s not sure he can take it to warehouses in the International Commodities Exchange. And because of that, we could quite easily end up with surplus crop here because there’s no buyer.”

But the National Union of Coffee Agribusiness (NUCAFE), which includes some 1,500 coffee farmers, supports the government’s decision to withdraw.

Executive director Joseph Nkandu says farmers now have the opportunity to take ownership of their product and to invest and upgrade their coffee.

“The farmer has been getting far less than five percent of the retail value," Nkandu said. "Where does the 95% go? And the only way for this farmer to enhance the value that he’s getting from this coffee value chain is to upgrade.”

Uganda’s withdrawal does not mean an end to exporting coffee, according to the managing director of Uganda’s Coffee Development Authority. Emmanuel Iyamulemye says Uganda small and medium-sized enterprises can now focus on promoting their coffee in other markets.

“We are looking at specialty markets," Iyamulmye said. "We have our young youth, SME’s, which are looking at entering big markets like the United States, Japan, South Korea, Australia and of course, the Scandinavian countries and Europe.”

ICO officials say the organization has tried to resolve Uganda’s complaints but has not received a response, adding that the reasons for the withdrawal were not strong or related to the agreement.

Speaking to VOA via Zoom, ICO operations head Gerardo Patacconi says the organization is looking at the integration of the private sector and a public-private task force in a new draft coffee agreement with Uganda.

“This is a new opportunity," Patacconi said. "And this opportunity, to me, is unique and I guess that’s why it’s supported by donors, it’s supported by the industry. So, Uganda is a leading producer of coffee. It’s so sad it doesn’t see that as an opportunity. And whatever concerns should be discussed within. This is a coffee diplomacy.”

Uganda is currently Africa's leading exporter of Robusta coffee, exporting 6.1 million bags annually. - Halima Athumani, Voice of America

 

NAIROBI, Feb. 25 (Xinhua) -- The value of coffee exports from Kenya rose 17.4 percent in 2021 while tea earnings remained flat despite an increase in the quantity shipped out, the national statistician said in an economic report Friday.

The Kenya National Bureau of Statistics (KNBS) said the country exported coffee worth 26.1 billion shillings (about 229 million U.S. dollars) in 2021, up from 195 million dollars in 2020.

The quantity of coffee exported during the period stood at 37,477 metric tons (MT), a decrease from 43,386 MT in 2020, with the rise in earnings, indicating better prices in the global market that averaged 6.3 dollars, up from 5.9 dollars, according to KNBS.

KNBS said the earnings from tea stood at 1.15 billion dollars in 2021, a marginal rise from 1.14 billion dollars in 2020.

During the period, the quantity of tea the east African nation exported stood at 556,459 MT, down from 575,282 MT in 2020.

The Tea Board of Kenya attributed the declined production to unfavorable weather conditions experienced in the country for the better part of 2021.

Pakistan, the United Arab Emirates (UAE), Russia, Egypt and Sudan are Kenya's main markets.

For coffee, the east African nation is the fifth largest producer in Africa after Ethiopia, Uganda, Ivory Coast and Tanzania, according to the International Coffee Organization. - Xinhua

 

Uganda is considering a Central Bank Digital Currency (CBDC) in a move that has drawn policy attention to the large investments required for a successful trading ecosystem and crucial mileage offered by digital payments systems such as mobile money services and internet banking.

Whereas the actual cost of issuing a government-owned digital currency remains unclear, the costs surrounding this venture are reflected in the development of software tools, improved electricity generation for running high energy consuming block chain technology platforms, and recruitment of specialist personnel. Implementation timelines are yet to be confirmed.

“We are studying the idea of a Central Bank Digital Currency with the aid of case studies developed by peer central banks in Jamaica, Nigeria, Ghana and Kenya among others. The law does not accommodate digital currency use in Uganda but we are exploring legal options for future amendments in financial laws that will facilitate circulation of digital currency denominations.

"The dominant youth segment is a plus for introduction of a digital currency because it fits into their tech savvy behavioural patterns. Digital currencies rely a lot on blockchain technology, which creates a big investment burden on its ecosystem in form of human resources like data scientists. The rollout of a digital currency in Uganda will be anchored on execution of high value financial transactions that may be processed at a cheaper cost on a blockchain platform compared with the Real Time Gross Settlement System and mobile money platforms,” said George Wilson Sonko, a performance measurement analyst at the Bank of Uganda.

“The previous rollout of mobile money services that depend on digital wallets has levelled the ground for a future digital currency and that means less resistance from the local population. The biggest risk posed by digital currencies in developing economies lies in high frequency transactions by market players with little scrutiny and are not backed by physical cash,” said Fred Muhumuza, a local economist. - BERNARD BUSUULWA/JAMES ANYANZWA, The EastAfrican

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