Don’t dissolve UCDA, strengthen it
Throwing away institutions like paper towels is so very difficult to understand. As you say, it is truly a conundrum.
KAMPALA, October 30, 2024 — There are indeed many things we do not understand about rationalisation. My understanding of “Rationalisation” of government agencies is to cut costs. Yet when we proposed Uganda Coffee Development Authority [ UCDA ] in 1990 we provided a revenue source for it so that it would not need money from government. We recommended what we called a “cess”, that is a small service charge of 1 percent on coffee exports to cater for UCDA’s administrative expenditures.
This recommendation was approved by government so UCDA never needed money from government. I think the problem may have come when the cess was increased to 2 percent. When the cess increased, the UCDA started getting much money which attracted government attention. This came at a time when coffee production was increasing so much that the cess revenue became big! The Ministry of Finance decided to take all the cess and UCDA became another agency needing money from government!
This may be the fatal mistake that UCDA made. Instead of lowering the cess now that coffee exports were increasing, they raised it and collected huge amounts of money.
Now government has taken over those revenues and decided to make UCDA another department in the Ministry of APEOPgriculture.
This reminds me of privatisation.
In 1987, the foreign supporters of privatization recommended that we either dissolve or sell all government banks. They said our banks were unprofitable and insolvent [bankrupt]. I fought to restore Uganda Commercial Bank to profitability until we turned it around and returned it to profitability as it had always been since 1965 when it was created. When we succeeded in making it profitable the neocolonialists said it would now get a better price. So you can see that I had not understood that the reasons they were giving for dissolving and privatizing our banks were deliberately misleading. They were not telling us the truth of their intentions.
In the case of UCDA clearly the problem is not cost because with the huge growth in coffee exports a cess of even 0.25 percent of exports would cover its requirements for supervision of the quality of our coffee exports; promoting coffee research and promoting increased production. In all the countries we visited [Costa Rica, Columbia, Madagascar] to learn about best coffee export practices they all had an autonomous coffee export institution.
For anyone who has engaged in coffee export in Uganda or knows anything about coffee exports, it is frightening to imagine exporters looking everywhere for absentee bureaucrats often scattered anywhere in a “department” in the Ministry of Agriculture. Ask people who tried to get photo sanitary certificates from the Ministry of Agriculture recently and how they fared.
Ideally one wishes this matter could be put to a referendum so that the population can decide.
The most efficient services come from specialised institutions whose knowledge and expertise take many decades to learn and achieve. I can’t Imagine, for example, making Mulago Hospital a department in the Ministry of Health or Makerere a department in the Ministry of Education! The low quality of service delivery in many government departments deserves improvement, not additional work. Throwing away institutions like paper towels is so very difficult to understand. As you say, it is truly a conundrum.
Oh Uganda, may God uphold thee
We lay our future in thy hand.
The writer is a former Minister for Finance and senior economist.
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