Huge debts force Banyankole Kweterana Coop to sell prime land
MBARARA – Members of the struggling Banyankole Kweterana Cooperative Union [BKCU] have unanimously supported the sale of 55 acres of land located in Kashari North, Mbarara district to enable their union settle some debts worth about Shs 3.5 billion.
The decision was reached taken during BKCU’s 50th annual general meeting [AGM] held on Thursday at its head headquarters in Kakoba Mbarara City. The land to put on sale is part of the Mutonto ranch that that the union was sold to former Kashari North Member of Parliament, Yaguma Wilberforce Rutashokwa.
Abbasa Ainamani Rubaromba, chairman BKCU explained to the delegates that the union is heavily indebted.
Some of the significant debts include; Shs 1.5 bln Microfinance Support Centre loan, Shs 149 mln shared interest loan, over Shs 282 mln fair trade premium to primary societies, Shs 243 mln UCCFS loan, Shs 400 mln staff salaries, Shs NSSF 10 percent remittance of 238 mln, Shs 11 mln for Masaka Co-op Union coffee loan among many others.
“The union still has a lot of debts but once we sell this land, part of the profits can be used to rescue some of the mortgaged union properties in Kakoba, Ruhinda [Mitooma] and Bwongyera [Ntungama],” Rubaromba said, some of the money from the land sale will be invested in buying coffee.
“When we assumed office, the union didn’t have enough funds to facilitate both business and operational costs. Only Shs 22 mln was found on the account,” Rubaromba said.
However, this is not the first time BKCU is selling its assets to offset debts and resume coffee business.
The first to go was its ranch 22 in Kamarya cell, Akabare parish, Nyakasharara Sub county in Kiruhura district which Bank of Uganda sold to Gen Salim Saleh at over Shs 200 mln in 1990, part of Mutonto land in Kashari to former MP Wilberforce Yaguma in 2010, a square mile ranch in Bunyaruguru to Indian investors in 2013 at about Shs 500 mln.
The other property sold was Nyabikurungu coffee factory in Ibanda, land in Nyamitanga in Mbarara City which was sold to the Mbarara Catholic Archdiocese in 1980 and is presently occupied by Nyamitanga Technical Institute and Holy Innocent Children’s Hospital.
Once the land in Kashari is sold, the BKCU chairman said, some money will be used to facilitate crop finance in primary societies and fund the operationalization of BKCU SACCO.
“We need to start a union SACCO for farmers to access crop finance…,” Rubaromba said.
During the AGM, out of 170 delegates, 106 supported the sale of Mutonto land to save the union from the debt burden.
Meanwhile, Margaret Birungi, the BCKU general manager said they have only 58 tons of coffee in stores out of the projected 100 tons in a season, adding that they need capital to resume serious business.
Winnie Turyamureba, a representative from the Ministry of Trade and Industry and Cooperatives [MTIC] who probed the BKCU leadership urged them to account for Shs 67mln as reflected as missing in the supervisory report.
She said: “Members would like to know what happened to this money [Shs 67mln]. Why is not accounted for?”
Andrew Zimbe, regional manager Microfinance Support Centre said BKCU can again benefit from its financial services only if management can show a commitment to pay the remaining debt owed.
“Initially it was Shs 1.6 bln but as we speak now you have arrears of about Shs 1.4 bln but we are willing to add you more funding as long as you clear or show commitment to clear this facility,” Zimbe said.
Zimbe reported that dishonesty, greed and internal control have been the biggest challenges BKCU has battled with the previous leadership. He warned the current leadership to avoid such bad practices if the BKCU is to thrive again.
BKCU was founded on May 7,1958 to give African coffee farmers a stronger bargaining power against the Indian and white-led coffee monopolies of the day.
BKCU at one time had about 350 primary societies but now the union which used to be one of the most powerful in the country is struggling with only 67 active primary societies.
https://thecooperator.news/tea-growers-bkcu-to-hold-agms-soon/
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