MBALE – On April 15, 2022, at 9: 06 am, Finance ministry Permanent Secretary [PS] /Secretary to the Treasury, Ramathan Ggoobi, in a lengthy explanation, twitted, “Dear Ugandans, I am minded to make a few comments about the debate that has ensued over the agreement the @GovUganda recently signed with an investor [Enrica Pinetti ] to produce instant coffee in Uganda.
Vinci is the investor that came forward with a plan to do what the government wanted to be done. They offered to invest $80m to process coffee here, and then sell it in virgin markets in Europe and elsewhere.
The cost and risk of penetrating those virgin markets are for Vinci to shoulder. All the Government has done is to provide Vinci with a measure of incentives that are available to every strategic investor – in coffee, dairy, iron and steel, name it.
The incentives that have been availed to Vinci, just like it happens for other investors – local or foreign – are for the first 10 years. It is just to help it lay a foundation. Government has done the same to so many other businesses that have played a role in Uganda’s Devt [Development].
If we bother ourselves a bit with the question of why we provide incentives, we should remember that virtually every government in the world does the same. It can only be a matter of degree, depending on the circumstances obtaining in a given country.
After Vinci has penetrated the virgin markets and starts making profits, the incentives we are discussing will no longer be available to it, and it will pay all the taxes due to the Government. This is the plan for all investors who get incentives.
The Government, through @OWCUg has invested heavily in promoting coffee production through among other things providing improved seedlings, and partners like the Buganda Kingdom government have helped a lot. 19/
The stated aim is to push the current annual production of 420,000 tons up to 1.2m tons in the year 2030. We want to produce more coffee, and get the best out of it. We’re targeting $2bn. I’ve seen many tweets underscoring competitiveness of our coffee on the world market. 20/
The win-win solution for everyone is for us to produce more coffee, and ensure that most of it (if not all) is premium. That is a good challenge to have. Otherwise how can it be that out of the 420,000 tons of coffee we produce today, only 60,000 tons would be premium?
That is why I very much like the idea of continued dialogue on the issue. And while at it, we may get more value out of speaking with one another instead of shouting at one another. I am open to further engagement on this. Nice Easter weekend.”
Despite his lengthy explanation on the UVCCL deal, no Ugandan that responded to Ggoobi on Twitter had nice words for the man that was only appointed PS in the finance ministry a few months ago and had always before his appointment written extensively on how government can help Ugandan peasants get out of biting poverty.
Below, theCooperator brings you some of the responses to Ggoobi and the government, castigating the scandalous deal that had Finance minister Matia Kasaijja sign on behalf of government, while Italian Enrica Pinetti signed on behalf of Uganda Vinci Coffee Company Limited [UVCCL).
Muhwezi Alex @muhwezialex2
Recently signed with an investor to produce instant coffee ‘awo wenkomye okutegera’. My honest truth it won’t work after leaving people who have already invested in Ugandan coffee, Kyagalanyi, Ugacof ,Shame.
Wepukhulu Emanuel @wepcorp
I have highly anticipated a monopoly where farmers will sign non-disclosures of selling strictly to Uganda Vinci Coffee Company Limited. This monopoly is heavily implemented even in the maize business country wide to a point that maize export is left to only 1 group.
Brian Kasusse @BrianKasusse
I would like to understand clearly if a value chain analysis, stakeholder engagement, public announcements for bid process were made to get the best investor in the Coffee sector. What I know is that there are players already on ground that provide incentives to farmers.
They give fertilizers, coffee cuttings (seedlings), funds in form of loans to secure the coffee, farmer trainings, among others. These own the market, and the coffee on ground. Are you saying Vinci is to come up with her own new Coffee seed?
Kalundi Serumaga @NativeLandgrab
You are basically outlining work Coffee Marketing Board would have evolved to do, had it not been disappeared by your government. You are now caught between big local producers who thought they would usurp its work vs a local mafia. And Western capital is also “on the way coming”
Joshua Arinda@ARINDAJOSHUA5
Before looking elsewhere, we do have processors firms which would be supported to increase their capacity of the amount processed at a time than running to source for other people. When will my country men love their country and support the citizens? My next worry is now farmers I think they may lose their coffee plantations too.
Jonan K@JonanK6
There are things you read and you feel you want to come face to face with the writer, replying here won’t solve the issue, the issue of coffee is of national importance and backbone of our economy therefore it shldn’t be joked with. Ugandans need to understand well.
Cedric Babu Ndilima@CedricNdilima
Sir. Thanks for explanation. The principle of your explanation is spot on. The vehicle that you have chosen (Vinci) to execute may be the issue that is outstanding. There is an (another) thorny issue with Lubowa Hospital that is led by the same player. Mistrust is the issue
Kamusiime Arthur@KamusiimeArthur
Even on paper, the agreement is not right. It will be the investor to determine the price. Two, before the investor has attained her desired tonnage, no other processor is allowed to buy. Why protect her, yet they claim we are a market economy?
Sula mawaggali@sulamawaggali
The aim of exporting processed coffee is the best but explain why the minister @FrankTumwebazek was not involved Why it is a monopoly for vincii yet it would be opened by any one with capacity Why given to vincii with no experience in coffee yet he failed with our lubowa.
Harzi Harold@KayIzzi_Harold
Coffee trade is chain that starts from the farmer to the exporter, investment starts from the farmer. Many Agro processors have dearly invested in the uganda farmer to get to the 5m bag output then you wake up to curtail the market so Vinci can earn from where they haven’t sowed
Keneth.Ayebare@kenethayebare86
I think why Ugandans are up in arms is not a contract being given out but the terms. Also what is the cost benefit of exempting a company 10 years where it will be getting profits. What is special with this woman anyway?Even the first project shows no results
Twesiime Liberty @twesiime
How did you choose the company to begin with?? What advantage did it have over others and what’s is it’s experience in trading and processing the said coffee??
Angelus @angelmuhindo
Mr economics that works, vinci is not known to be in the coffee sector… how did you zero down to it? Was there any bid or it was based on excitement after a massage parlour visit
Ayella Brian…@AyellaBryan
I understand the drive for Value addition the government is pushing under Agro industrialization but what Ugandans are complaining about is: 1, What is the due diligence on the companies being given these contracts.
Namara Naome Baketunga @BaketungaNaome
And whatever Vinci will do, will be flown out with her at some point. Leaving the generation studying agric value chain and chemists in Kyambogo and food scientists from makerere with no experience. Can she employ these people in strategic positions for the benefit of uganda .
Mark Wanyama @Makoha2
Why not mobilize and organize Ugandan coffee farmers and cooperatives, build their capacity to international standards beyond the questionable Vinci to whom you are handing over a monopoly on a silver plate?
Charles Lwanga @charzo256
Nice thread from a person working for a govt that for decades gives explanations like you are doing without actualisation of what you say. When you talk about engaging stakeholders yet you already put pen on paper beats ones understanding. Shooting before aiming
Timothy Baguma @TimothyBaguma5
Did you do any due diligence on that “investor”? What was the criteria for selecting that particular investor? Was it that ..simply because she’s the one that came up with the idea? Let’s keep these comments from you..for future reference.
Rodney McWona @WMRodney
Instead of giving incentives to a foreign company, why can’t Gov’t work with BCU, Finance it and have it process this fine product. They could as well seek partnerships to market the product in these virgin markets
Easton Ndyabasa @eastndy
The move is now clear to me but the question is why did they give the deal to the same person who promised us Lubowa hospital and failed. The same investor we know she is the specialist in furniture. Some issues are not clear.
Ronnie Kaweesi @KaweesiRonnie
Ramathan don’t you think we’re risking a lot by putting all our eggs in one basket? This is the second contract entrusted to the same individual after the first one somewhat hit a snug. Why don’t we revive the steam in the cooperatives? The move is now clear to me but the question is why did they give the deal to the same person who promised us Lubowa hospital and failed. The same investor we know she is the specialist in furniture. Some issues are not clear.
Crescent Katuramu @crescentk2
Professor whatever you’re rising is okay, but Ugandans have simple questions; 1. How did you trust an investor with our major foreign exchange earner yet the same investor has failed to deliver in Lubowa. 2. How experienced is the investor in the same business.
Byomuhangi Barnabas @byomuhangibarn2
You engage people after the agreement has already been signed..? when will @GovUganda put people first..? a foreign investor sh’dnt have monopolistic powers to decide 4 coffee farmers & sh’d offer a competitive price or those who can find better prices abroad be allowed to export
Moses Amone @MosesAmone
What is the so-called investor’s experience, in this line of business? Going by your thread this kind of venture requires, one with a solid foundation & resources.
Robert Bavakure @RBavakure
Resolving the coffee (Gold)business in Uganda does not in any way require Uganda government to create a monopoly for it. What happened to the liberalization that was implemented both external and domestic trade since 1987.
Joseph @josekayemba
Incentives should be provided to the coffee industry as a whole, not individual companies. The agreement stops anyone from exporting or selling premium coffee to anyone else until Vinci gets all it needs. That’s unconstitutional and wrong.
Lorika Lorika @MysteryLorika
Thank you for the enlightening insights. I am just in wonder that 1. you sought to engage farmers and other coffee stakeholders after signing the agreement and 2. You have not addressed suspicions surrounding the same investor in the embattled Lubowa specialised hospital project.
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