By Shivan Tuhirirwe,
NATIONAL
Following a recent debate inwhich parliament adopted a report by the committee of parliament on tourism and trade to cancel the dubious coffee agreement between the government of Uganda and the Uganda Vinci Coffee Company Limited (UVCCL), the deputy speaker of parliament Rt Hon Thomas Bangirana Tayebwa has assured farmers of safety of their coffee produces, Parrots UG has learned.
“What I can confirm to you is that no body is going to take away your coffee,” Tayebwa said.
He disclosed an indoor meeting with the president inwhich cabinet agreed to make few changes in the provisions of the agreement.
“We had a meeting with the president and agreed to change a few things in that controversial coffee agreement. The president shall soon give the nation an update regarding the same matter”, said Tayebwa.
On February 10, 2022, gov’t of Uganda signed an agreement with Vinci Coffee Company Limited owned by an Italian investor Enrica Pinetti giving her the mandate to export Ugandan coffee as a single buyer.
Ramathan Ggoobi, the Secretary to Treasury signed on behalf of government while Enrica Pinetti, the board chairperson of Uganda Vinci Coffee Company Limited signed on behalf of the company.
According to the agreement, 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. The document also gives exclusive rights to buy all Uganda’s coffee and its concession will end in 2032, but subject to renewal
The company agreement with government has provisions to exempt the Vinci Coffee Company from paying taxes including Income tax, Pay As You Earn, Excise duty, and NSSF. This document has provisions that seek to subsidize this company giving them a special tariff of 5 cents per unit in terms of electricity.
This has been outrightly rejected both by the farmers and parliament.
In a report presented on the floor of parliament on Tuesday last week, the trade committee chairman Mwine Mpaka noted alleged unfair terms of the Memorandum of Understanding (MoU) between government and UVCCL further directed government to report back to Parliament within six months of adoption of the report.
The report revealed that the agreement was illegal as it contravened the Constitution and other tax laws.
“Article 8(a) of the Constitution was infringed upon by the agreement when the execution of the agreement was concluded without the input of coffee farmers who are the owners of coffee beans which are being granted to UVCCL by the agreement,” read the report in part.
The committee further observed that the structural adjustments that government undertook between 1981 and 1990 led to the liberalisation of Uganda’s coffee sector and yet the agreement introduces monopoly into the coffee industry which is against the principle of liberalization.
“The committee observes that the agreement creates monopoly in favour of UVCCL to the purchase of superior quality coffee beans from Uganda by restricting government from registering any contracts or acknowledging any arrangement for the export of coffee beans,” Mwine Mpaka said.
The committee discovered that UVCCL failed to commence the construction of the US$440 million coffee factory when it was allocated 25 acres of land in Namanvanve Industrial Park.
“The committee was informed that whereas government had spent colossal amounts of money to grade, fence, backfill the land allocated to UVCCL at a tune of Shs7 billion and relocated the power lines near the proposed facility site, UVCCL had not commenced, nor undertaken any activity as envisaged in the agreement,” Mwine Mpaka read.
It was also recommended that government should consider extending appropriate incentives to the already existing 47 local companies that are doing value addition as well as fast-track the capitalization of Uganda Development Corporation to invest in soluble coffee plant.
“The already existing 47 local processors are in the business of adding value including roasted coffee beans, roasted and ground coffee as proposed by the Vinci Coffee Company. This is being done without similar incentives as those proposed in the UVCCL agreement,” the report read.
The MPs recommended that officials who committed government to such illegalities should be penalized as a deterrent measure to avert similar occurrences.
According to the committee’s findings, the agreement signed on 10 February 2022 revealed that whereas Government represented by the Minister of Finance and Secretary to the Treasury, the agreement was not signed by UVCCL.
“The representative from UVCCL, Ms. Enrica Pinetti signed as a witness and no one signed on behalf of UVCCL. The committee notes that under the article and MoU of UVCCL, it is only a director, secretary or person appointed by the board who has the right to authenticate a document affecting the company,” said Mwine Mpaka.
This according to Mwine Mpaka means that the agreement can be challenged as not binding on UVCCL.
The Attorney General, Hon. Kiryowa Kiwanuka said that government will look into the recommendations and report back.
“The law has not changed. If the agreement is null and void, it is null and void. We shall look into the recommendations and we shall be happy to report back,” said Kiryowa Kiwanuka
On Sunday while addressing the nationon the state of national economy and escalating prices of commodities in the country, president Museveni said that he will exponentiate the outrageous coffee agreement in his State of Nation’s addressdue June 7.
“During the State of the Nation Address on the 7th of June, 2022, I will touch on the issue of the so called “coffee deal” that was being discussed in Parliament
that other day. I could see fundamental
disorientation in the position of some of the speakers that were speaking in Parliament.” Museveni said.
