President Yoweri Museveni has rallied coffee-producing nations across the African continent to cease the export of unprocessed coffee beans and instead focus on enhancing value addition.
Museveni who on Tuesday was opening the second G25 African Coffee Summit in Kampala, said the strategic move aims to amplify their gains from the coffee industry significantly.
“We the raw-materials producers, we need to conduct internal struggles in respective countries to add value to these raw- materials, including coffee so that we earn more from our sweat and create more jobs for our youth instead of dying in the Mediterranean going to Europe. We also need to sensitize our partners in the countries that have been buying our raw- materials at semi-slave prices, that their economics is defective. What will the USA or Europe or Asia lose, if Africa sells added value coffee to them instead of the raw-material form and earn more money? What if the value addition is done to the other raw-materials – copper, gold, iron-ore, lithium, etc.? Money to Africa, will mean higher purchasing power for Africa,” he said.
He added: “The Africans who now lack electricity, will be able to afford to pay for electricity. Where will the turbines come from? Will they not come for Europe, USA, Russia, China, or from other partners? How can greed obscure rationality to such an extent? Global affluence will benefit everybody. Down with Imperialism, down with parasitism, long live the win-win strategy.”
The current global demand for coffee stands at 160 million bags of 60kg each, with a total value of $460 billion.
However, out of the $460 billion global coffee value, the coffee producing countries only take $25 billion, and Africa gets only $2.4 billion, with $845 million coming to Uganda because the East African country produces 8 million bags of 60kgs each every year.
Museveni questioned how non coffee producing countries can make more profits from coffee purchased from producing nations which earn peanuts from their sweat. The solution, he said, lies in value addition.
“Anon-coffee producing country like Germany, earns $6.85 billion! This is part of the iniquities of the present global parasitic system. In the last 60years, I have been involved in the struggle against this modern slavery for Africa – the curse of producing raw-materials for cleverer people in the world to add value to those raw- materials and get much more value from them. A kilogram of bean coffee of good quality, may go for $2.5 per kg. The same quantity of coffee roasted, ground and packaged may go for $40. This is where. there is massive hemorrhage of money from the global South to the global North. It is not only the loss of money per kg. It is also the loss of jobs. If you take the whole spectrum of raw-materials from agriculture, minerals, forest products, etc., the loss to Africa is massive,” he said.
This is not the first time President Museveni has called for value addition to coffee, and spoken ill about the exportation of raw materials.
He recently said, “if this logic of value addition is extended across the entire spectrum of our raw materials, our economy would expand by at least a factor of 10. It would expand from $55 billion to $550 billion in the short term.”
UGANDA’S COFFEE PRODUCTION AND EXPORTS
The volume of coffee produced increased by 5% from 8.06 million (60kg) bags in FY 2020/21 to 8.45 million (60kg) bags in FY 2021/22.
This was on account of government interventions such as generation and distribution of improved coffee variety seedlings, increased use of water for irrigation and promotion of use of fertilizers.
The volume of exports increased from 6.08 million (60kg) in the FY 2020/21 to 6.3 million (60kg) bags in the FY 2021/22, an increase of 3%.
The value realized from coffee exports increased by 58% from US$ 544 million in 2020/21 to US$ 862 million in 2021/22.
The agriculture sector, as a whole, contributed 24.1% of GDP.
The sector grew by 4.4% in the FY 2021/22 as compared to 4.3% in the FY 2020/21.
The value of agricultural exports registered a growth of 24% from $1.6 billion in FY 2020/21 to $2.08 billion in FY 2021/22.
This growth was attributed to the increased volumes and quality of coffee, dairy, fish and tea.
G-25 AFRICA COFFEE SUMMIT
The G25 African Coffee Summit is a high-level meeting of the heads of state and government of the 25 coffee-producing countries in Africa. The summit aims to address the challenges and opportunities in the coffee sector and promote sustainable production, value addition, market access, and consumption of African coffee. The summit is organized by the Inter-African Coffee Organization (IACO) in collaboration with the host country.
The first G25 African Coffee Summit was held in Nairobi, Kenya in May 20221
The second G-25 Africa Coffee Summit taking place in Kampala aims to address the challenges faced by the African coffee-producing countries, promote value addition and domestic consumption in conjunction with educating people on coffee and its benefits on health.
The Summit’s specific objectives include;
i) Discuss and emphasize the importance of Coffee Value addition in the Socio-Economic transformation of African Economies.
ii) Marshal consensus of African Coffee Producing Countries’ leaders towards giving prominence to coffee as a strategic commodity under the AU Agricultural Agenda 2063.
iii) Create opportunities and synergies to expand regional coffee trade under the framework of the African Continental Free Trade Area (AfCFTA).
iv) Share knowledge about the eminent danger that climate change poses on coffee and the need for continuous investment in Research, Innovation and Development so as to build resilient coffee varieties.
At the Summit, the Kampala Declaration was signed with the aim to rally the support of the African Union in giving coffee the prominence it deserves as a strategic crop.