President Yoweri Museveni has said he will return to Parliament, the controversial Coffee Agreement signed between the Italian businesswoman Enrica Pinetti’s company, Uganda Vinci Coffee Company Limited (UVCCL) and the Government of Uganda.
The Agreement which was denounced by the public and terminated by Parliament was giving Vinci Coffee Company Limited leverage to have exclusive rights to buy Uganda’s coffee for processing on top of several incentives and concessions extended to the same coffee company.
Background
The Minister of Finance, Matia Kasaija on February 10, 2022, signed an agreement with Pinetti to allow her company to establish a coffee processing plant worth US$80 million. The two represented the Government of Uganda and UVCC respectively.
According to the deal, the coffee company would retain exclusive rights to buy all Uganda’s coffee. The agreement gave Vinci Coffee Company Limited (UVCC) leverage to have exclusive rights to buy Uganda’s coffee for processing on top of several incentives and concessions extended to the same coffee company.
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. It would be given exclusive rights to buy all of Uganda’s coffee and its concession would end in 2032 but subject to renewal.
The agreement sought to exempt the Vinci Coffee Company from paying taxes, including Income tax, Pay As You Earn, Excise duty and NSSF, Government to construct an access road linking the plant to the main access road, power transmission to the plant at the Government’s cost, among other benefits.
The deal caused public outcry that it was of a huge disadvantage to farmers and the country.
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Parliament on May 17, 2022 directed Government to terminate the agreement.
This followed a report by the Parliamentary Committee on Trade, Tourism and Industry that recommended the cancellation of the agreement in the public interest.
The Committee chaired by Mbarara City South MP, Mwine Mpaka described the agreement as illegal further noting that, “officials who committed the Government to such illegalities should be penalised as a deterrent mechanism to stop similar occurrences in future.”
“The Government is directed to terminate this agreement and report to Parliament, within six months from the date of adoption of this report. Upon termination, the Government should regularise its relationship with Uganda Vinci Coffee Company Limited through proper due diligence, due process and proper stakeholder consultation before any further business can proceed. Thus initiating fresh negotiations,” said Mpaka.
President Museveni while delivering the 2022 State of the Nation Address in Kampala on June 7, 2022 revealed that he initiated the controversial Coffee Agreement signed between Enrica Pinetti’s company and the Government of Uganda.
Museveni admitted that Pinetti had no experience and that he (Museveni) is the one who asked her to help the country in that line of business, a concern earlier raised by stakeholders in the coffee sector.
“When I met madam Pinetti, she had no idea about coffee. I, however, could see she had a wide network of contacts and I asked her to look into coffee. After some time, she came back with a positive report- that it was doable. I’m the one who told her… For her, she was in hospitals.” Museveni said on June 7, 2022.
However, the President has now hit at Parliament that it blocks his proposals aimed for the development of the country, including the Coffee Agreement terminated by Parliament.
The President, who on Sunday was opening the retreat for the National Resistance Movement (NRM) Parliamentary Caucus at the National Leadership Institute, Kyankwanzi warned Parliament against blocking his proposals, saying it could cause a “constitutional crisis.”
“This is becoming like a system, and it can cause a constitutional crisis. It is because I am soft. I don’t normally use harsh methods, but otherwise, it could cause a constitutional crisis, and I would want to appeal to you that we really cure this in a harmonious way. We agree that this must never happen again; where the President makes a proposal, the Parliament blocks it. There is a potential trouble there. It is because I am always soft, but otherwise it can cause a problem, and I would want us to abandon that because it is very bad,” Museveni told NRM MPs.
He added: “I know what I am doing. For me to bring to Parliament something, then it is blocked, tossed up and down, then begging, I have got to call meetings, that is not good. In other countries like UK, if the Prime Minister and Parliament don’t agree, they both resign and go for fresh elections. I cannot say we do this, and you say we cannot do it, and then we stay there; five years we are just there. If you think I am wrong, let’s take the matter to the people. There is no way you can have this type of paralysis. It is not acceptable. It is not good.”
A tough talking Museveni then told NRM lawmakers that he would return the controversial coffee agreement to Parliament for approval.
“You say oversight role. Thank you very much for oversight, but why do you only oversight colonialism? Because, when you oversight an economy that is only based on raw materials; producing coffee, producing cotton, no value addition, and you are oversighting that. I brought a proposal to add value to coffee two times; I brought it, and I will bring it again. I brought a proposal of the Italian lady, Pinetti, and you blocked it that you are oversight. So, your job is to oversight backwardness. We have got coffee where we are earning $2 a kilo. I am bringing a proposal by somebody [Pinetti] who will make us earn $25 or more per the same kilo, and you block it and say you are oversight. So, your job is to oversight backwardness,” said Museveni to NRM Legislators.
Museveni lectured NRM MPs that the business of coffee in the world is $460 billion, adding that all the coffee growing countries on the globe share only $25 billion out of the $460 billon, with Africa taking $2.5 billion.
“How can you not see this, and you spend time fighting people who are trying to help us add value. This is not good. We are wasting time,” he said.
He told legislators that government is working with Serbians to export Uganda’s processed coffee to Serbia and Russia.
