Why parliament voted to cancel controversial coffee agreement

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The Trade Committee chairperson Mwine Mpaka. PHOTO| Parliament.

Parliament Wednesday night voted to terminate the controversial deal that had given a single company exclusive rights to buy the country’s coffee.

After deliberating for about two-and a-half hours, the House chaired by Speaker Anita Among adopted the Trade committee recommendation to have the deal the government signed with Uganda Vinci Coffee Limited terminated in public interest. 

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In their findings, the committee said the deal contravened multiple sections of law. The committee also noted that the company doesn’t have financial capacity to undertake the project, and lacks a valid investment licence. The House heard that the company’s investment licence issued in 2014 expired and was not renewed in 2019. 

The legislators also noted that the company linked to Italian investor Enrica Pinetti, who signed the controversial deal as a witness, doesn’t qualify for generous waivers. 

In the deal, the government had waived all taxes including social security contributions for company employees; offered free land, water, electricity, monopoly for premium quality coffee and the powers to determine prices and limiting licensing of coffee exporters until the company meets its demand which is unlimited. 

The MPs resolved that all these waivers were illegally and unlawfully granted by Finance Minister Matia Kasaija.     

The House directed that officials who committed government to such illegalities should be penalised as a deterrent mechanism to stop similar occurrence in future.   

Shadow minister for Agriculture and MP Kimaanya Kabonera, Dr. Abed Bwanika petitioned parliament after it emerged that government had signed the deal. PHOTO| Parliament.

Attorney General Kiryowa Kiwanuka accepted the House decision on the coffee deal and promised that the government would review the committee recommendations. 

“I have read it and noted its contents. We have listened to the concerns. We have noted the concerns of Parliament and the people. We shall take the recommendations that have been given. We shall review them and report back to Parliament on the action taken,” Mr Kiryowa said.

Mr Mwine Mpaka, the Trade committee chairperson, revealed that despite being in complete agreement with most of the findings of the report, president Museveni was against the termination of the contract.

“ The President agreed with most of the issues raised by the committee but whoever emphasized that the biggest issue has been value addition,…and  strongly recommended that a review of the agreement between Vinci and government of Uganda be done in not more three months as opposed to termination as termination could have reputational damage,” Mr Mpaka said. 

The review proposal was however ignored, with the majority of the lawmakers insisting that it was a bad deal for the country. 

For some time now, the coffee deal has been a trending topic in both main stream and social media outlets. Although government has on several fora argued that the deal had been signed in good faith and was for the good of the country, MPs, coffee farmers and local exporters differed.

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