President Yoweri Museveni has revealed that he initiated the controversial Coffee Agreement signed between Italian business woman Enrica Pinetti’s company and the Government of Uganda.
Museveni said this while delivering the 2022 State of the Nation Address in Kampala this Tuesday 7th June 2022.
He admitted that Pinetti had no experience and that he is the one who asked her to help the country in that line of business, a concern earlier raised by stakeholders in the coffee sector.
“When I met madam Pinetti, she had no idea about coffee. I, however, could see she had a wide network of contacts and I asked her to look into coffee. After some time, she came back with a positive report- that it was doable. I’m the one who told her… For her, she was in hospitals.” Museveni said.
He was concerned that some individuals were opposed to the initiative yet it would go a long way to boost the economy.
“Those attacking that project are supporters of perpetual bleeding of Africa. If they were not, they would have responded to our call to add value to coffee and seek government assistance,” He added.
The remarks by Museveni follow the controversial deal recently sealed between the Government and Uganda Vinci Company Limited.
Museveni explained that coffee-growing countries all over the world get less revenue from the sale of their coffee, adding that it is other countries that benefit from this coffee.
“The total value of coffee in the world is $460 billion. However, of this figure, the coffee-growing countries only take $25 billion. The African coffee-growing countries only take $2.4billion When we de-hust, roast, grind, and pack here, Uganda will get more dollars and we shall also pay higher prices to our farmers,” he added.
The Minister of Finance, Hon. Matia Kasaija on 10 February 2022, signed an agreement with Pinetti to allow her company to establish a coffee processing plant worth US$80 million. The two represented the Government of Uganda and UVCC respectively.
According to the deal, the coffee company would retain exclusive rights to buy all Uganda’s coffee. The agreement gave Vinci Coffee Company Limited (UVCC) leverage to have exclusive rights to buy Uganda’s coffee for processing on top of several incentives and concessions extended to the same coffee company.
The company was given free land in the Industrial and Business Park at Namanve measuring 27 acres after it indicated its capability of establishing a coffee processing facility in Kampala. It will be given exclusive rights to buy all of Uganda’s coffee and its concession will end in 2032 but is subject to renewal.
The agreement sought to exempt the Vinci Coffee Company from paying taxes including Income tax, Pay As You Earn, Excise duty, and NSSF, Government to construct an access road linking the plant to the main access road, power transmission to the plant at the Government’s cost among other benefits.
Parliament on 17th May 2022 directed Government to terminate the coffee agreement it recently signed with Uganda Vinci Coffee Company Limited (UVCCL), a foreign company that was awarded exclusive rights to buy Uganda’s coffee.
This followed a report by the Parliamentary Committee on Trade, Tourism, and Industry that recommended the cancellation of the agreement the government signed with Uganda Vinci Coffee Limited terminated in the public interest.
The Committee on Trade, Tourism, and Industry chaired by Mbarara City South MP, Mwine Mpaka described the agreement as illegal further noting that, “officials who committed the Government to such illegalities should be penalized as a deterrent mechanism to stop similar occurrences in future.”
“The Government is directed to terminate this agreement and report to Parliament, within 6 months from the date of adoption of this report. Upon termination, the Government should regularize its relationship with Uganda Vinci Coffee Company Limited through proper due diligence, due process and proper stakeholder consultation before any further business can proceed. Thus initiating fresh negotiations,” said Mpaka.
The President promised to support any of the coffee stakeholders to have value addition of the locally produced coffee.
“I am ready to sit down with all the coffee people. If you want to add value I will support you. Instead of attacking the savior, if you are genuine, join the liberation effort,” the president said.