KAMPALA: President Museveni has defended the controversial Italian investor Enrica Pinetti’s role in Uganda’s coffee sector, as well as outlined steps his government is taking to curb rising commodity prices.
Delivering his State of the Nation Address on Tuesday, June 7, 2022, the President lashed out at his critics, whom he said have not responded to his call to develop Uganda’s coffee sector and are instead interested in seeing the country lose its coffee to foreigners.
He said he had tried many times to get investors in the coffee sector in vain.
Ever since 1986, I have been trying to get value-adders to all our raw materials. Sometimes I succeeded, like with milk (Sameer, Brookside, Pearl, Kagate, etc.), cotton (Nytil, Fine Spinners), wood (plywood in Katuugo), palm oil (Bidco, etc.), sugar (many companies), petroleum (refinery), bananas (Dr. Muranga, Kyamuhangyire, etc.), skins and hides (Nakyobe), gold (six refineries), etc.),
“With coffee, I tried so many groups—Nescafe, Nestle, Tata, Bancafe (Banya), Star Coffee (Tz-Bukoba), to no avail,” he added.
Mr. Museveni revealed that when he approached Pinetti, he realised that she had no idea about coffee but that he had a wealth of contacts.
“When I met Madame Pinetti, she had no idea about coffee. I, however, could see that she had a wide network of contacts. I asked her to look into coffee. “After some time, she came back with a positive report that it was doable,” he said.
Therefore, those attacking that project are supporters of okukenenula, (ekyejwiiso) of Africa – perpetual bleeding. If they were not, they would have responded to our call in 1986 and after, to come forward and add value to coffee and seek government assistance, “he added.
The President’s remarks come after Parliament recommended the termination of the coffee agreement the government signed with Pinetti’s Vinci Coffee Company.
The House based their decision on three major reasons: the deal contravened multiple sections of law; the company doesn’t have financial capacity to undertake the project; and it lacks a valid investment licence. The House heard that the company’s investment licence, issued in 2014, expired and was not renewed in 2019.
In the deal, the government waived all taxes, including social security contributions for company employees; offered free land, water, electricity, and a monopoly on premium quality coffee and the power to determine prices; and limited licencing of coffee exporters until the company meets its demand, which is unlimited.
But on Tuesday, Museveni said, “It is criminal for anybody to continue arguing for the continued export of raw materials in Africa when there is 90% more value in that product that you are giving to outsiders.”
In regard to high prices, the President said it would be suicidal to lower the prices.
“Instead, we are doing two things. One is to engage the global actors that have caused these artificial shortages. I have contacted some of the actors. I am glad H.E. Biden is going to Saudi Arabia to meet with the Crown Prince to get OPEC to pump more petroleum out of the ground. That would definitely help. Also, the Chairperson of the AU, H.E. Mack Sall, met H.E. Putin in Sochi, Russia to ask him to assist in getting the wheat of Ukraine out of the ports of Odessa, and he has also talked to the Europeans to stop sanctioning wheat from Russia and fertilisers because Africa needs them. This is one of the correct ways.
The other one is to get our own substitutes—cassava and banana flour for bread and our own sunflower and soya bean oil as we wait for our more quantities of palm oil from Sango Bay, Mayuge, Buvuma, Maruzi, Bundibugyo, etc. Cutting taxes or subsidies, especially on imports, is suicidal because our people may buy carelessly and we may end up draining our forex reserves, “he added.