By Adam Bukenya updated at 0950 EAT on 29 April 2022
What you need to know:
- Government officials, led by President Museveni, reject the accusation and say value-addition to the country’s natural resources and agricultural output is key to economic growth and development.
Members of Parliament on the Trade Committee yesterday accused Finance Minister Matia Kasaija of auctioning Uganda coffee and future by signing a deal that allegedly hands sector control to a foreign investor.
Government officials, led by President Museveni, reject the accusation and say value-addition to the country’s natural resources and agricultural output is key to economic growth and development.
The minister on behalf of government signed a memorandum of Understanding with Uganda Vinci Coffee Company (UVCC) owned by Italian lady Enrica Pinetti, granting the firm generous tax holidays, subsidies on utilities, free land, and what has been interpreted as first right of refusal on local coffee purchase.
These provisions, which minister Kasaija and Attorney General Kiryowa Kiwanuka defended before the inquiry committee, has been challenged by, among others, some ministers, parliamentarians and sector players including growers and processors.
A Tuesday meeting of the ruling National Resistance Movement’s Caucus in Kampala resisted a defence of the deal by their party leader, President Museveni, prompting him to capitulate to demands for review of the deal.
In Parliament yesterday, MPs on the Trade Committee, however, continued with their investigations to establish how the deal was signed, how the investor was sourced, if any laws were violated and the impact of the decisions and associated sweeteners on industry.
Appearing before the legislators, minister Kasaija said the value-addition project was conceptualised in 2013 after President Museveni tapped Ms Pinetti to establish a plant to process 60,000 metric tonnes of Uganda’s green coffee beans into final coffee products.null
This, he argued, complemented Uganda’s agro-industrialisation agenda that aims to increase agricultural productivity and enhance value addition.
“The value of Uganda coffee would, therefore, be higher if processed to [a] final product. The price of fully processed coffee would be $14 (Shs49,000) per kilogramme, compared to $2.3 (Shs8,050) per kilogramme for green beans that was received in March 2022; representing a six-fold increase in revenues. Therefore, this project is aimed at addressing this gap and ensuring that the country earns more from its coffee,” he said.
He accused the multinational companies of only using Ugandan coffee beans to feed their home coffee industries.
The minister was accompanied by Solicitor General Francis Atoke, the Deputy Solicitor General Pius Biribonwoha, and other senior officials from both Finance ministry and chambers of the chief government legal advisor.
Attorney General Kiryowa who said he was present to “back up” minister Kasaija interjected multiple times during the MPs’ questioning of the minister, helping to clarify legal matters or simply defend the memorandum of understanding.
He told this newspaper on Tuesday evening that although NRM Parliamentary Caucus members demanded a review of some impugned sections, he saw no wrong with the document because it broke no law of the country and incentives provided to the foreign investor are available Ugandan entrepreneurs.
MPs subscribing to NRM had argued that the deal was likely to boomerang for the party, and its electoral fortunes, unless its problematic provisions were changed.null
At yesterday’s hearing in Parliament, tempers flared after lawmakers, referring to Mr Kasaija as a grandfather, questioned how he inked a MoU that threatens Uganda’s future and grants near-exclusive rights to Ms Pinetti, whom they said is a foreigner who has failed to build a promised specialised hospital in Lubowa almost three years after Uganda government issued her promissory note in excess of Shs300b.
Ms Pinetti never showed up despite a summon by the Committee.
Mr Kasaija yesterday shot back, asking where the MPs wanted him to go.
This prompted Committee chairman, Mr Mwine Mpaka, to intervene and calm the waters.
Once order returned, the minister told the committee that Uganda Vinci Coffee Company Limited is planned as a first¬ of-a-kind $80 million (Shs281b) integrated coffee processing plant to add value to Uganda coffee and exports.
He said through the deal, UVCC will generate at least $672 million at full capacity per annum, which is much more favourable compared to $718.96 million that Uganda earns from all coffee exports as of 2021.
However, lawmakers questioned minister Kasaiaja why he signed a contract with the firm without conducting due diligence on it, which Mr Matia disputed until MPs discovered that a copy that he waved purporting it to be the feasibility report was a different document.
Solicitor General Atooke, in reference to the feasibility report, said “Honourable chair, I must admit that we have never seen that document because the owners told us that the document contains their trade secrets which they cannot share”.
Arua City Woman Member of Parliament Morine Osoru asked the committee chairperson to order Mr Kasaija to continue submitting but only under oath, accusing him of telling lies and misleading the committee.
Mr Mpaka, however, overruled her, but asked Mr Kasaija to withdraw the “lies”.
The committee is expected to present its report to the whole House today afternoon during the plenary.
In Parliament yesterday, MPs on the Trade Committee, however, continued with their investigations to establish how the deal was signed, how the investor was sourced, if any laws were violated and the impact of the decisions and associated sweeteners on the industry.