The Attorney General Kiwanuka Kiroywa has told Parliament that the coffee contract between the Government and the Italian investor is legal and binding.
Appearing before the parliamentary committee on Trade, Tourism and Industry, on Wednesday, 27 April 2022, Kiroywa , Kiroywa told the Committee that Uganda Vinci Coffee Company Limited (UVCC) had proper legal standings in Uganda and that the contract signed had no breach of any provisions of the law.
“I confirm that I carried out a legal due diligence on the company and I am convinced it is in compliance with the provisions and any of the laws,” Kiwanuka said.
He noted that the deal was done within the law and it is good for the economy at large and the coffee sector in particular.
The Minister of Finance, Matia Kasaija who accompanied the Attorney General told the Committee that contrary to the reports and narratives that the contract favours the coffee company at the expense of local farmers, the deal is beneficial to Ugandans.
Kasaija emphasized that the Memorandum of Undrstanding between the Government of Uganda and Vinci Coffee Limited is intended to boost Ugandan coffee, which has not been realized by the over 12 million farmers across the country.
He said that UVCC provides an opportunity for the country to fetch better prices for high grade coffee. He said that UVCC would pay a competitive and market determined price for the Coffee.
He also allayed MPs’ fears that the contract deters other potential investors from investing in value addition. He added that the company aims to establish several hubs across the country intended to enhance traceability of farmers and to eliminate middlemen.
Regarding the reports that the office of the Solicitor General was not involved in the signing of the agreement, the Solicitor General Francis Atoke refuted the claims saying that he works with the Attorney General and that the contract was legal and binding.
The Minister of Finance, Hon. Matia Kasaija on 10 February2022, signed an agreement with Pinetti to allow her company establish a coffee processing plant worth US$80 million. The two represented 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 gives UVCC liverage 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 Uganda’s coffee and its concession will end in 2032, but subject to renewal.
The agreement seeks 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 government’s cost among other benefits.
Kalungu West County MP Joseph Ssewungu tasked the Attorney General to be on record to having cleared the agreement. In response, the Attorney General said that the agreement was legal, binding and that UVCC had proper legal standings in Uganda and that the contract signed had no breach of any provisions of the law.
Bwamba County MP, Hon Richard Gafabusa was concerned that there were no consultations of the public and the different stakeholders in this process. He wondered how there had been ongoing talks between UVCC and the Government for a number of years yet the country got to learn of the agreement in 2022.