MPs warn Museveni over U-turn on Coffee deal

Parliamentarians have warned President Yoweri Museveni against entertaining any thoughts a U-turn against the resolution of the House that endorsed the termination of the agreement between the Government and Uganda Vinci Coffee Company Limited (UVCCL).

The Committee led by Mwine Mpaka Rwamirama, also the Mbarara City South MP met different stakeholders in the coffee sector including Civil Society Organization – CSOs actors and the Uganda Law Society – ULS between April 25th – 27th 2022 to consider their input on the subject matters.

On Wednesday Mpaka presented the Committee findings on the Floor of the House after the President on Friday 13th Mayo 2022 at State House in Entebbe where they presented their findings. But according to Mpaka, while the Committee recommended termination of the deal, the President was against it.

Mwine submitted that President Museveni said the unlawful provisions in the deal were not made by the Vinci but by the Government represented by Matia Kasaija, the Minister of Finance and the Attorney General, thus its cancellation would have legal and financial implications.

Elijah Okupa, the Kasilo County MP argued that the 12 million coffee farmers in the country would know who exactly is the enemy if President Museveni takes and pushes for a contrary view as opposed to what Parliament has resolved.

Joyce Bagala Ntwatwa, the Mityana District Woman Representative observed that the President was well briefed on the deal that has lately sparked endless public uproar, but noted that his views should also be respected.

Meanwhile, Muwada Nkunyingi, the Kyandondo East MP expressed optimism that what Parliament has resolved will stand, and hopes the President will respect the rule of law and the democratic principles of governance.

Furthermore, the MPs observed that Clause 4 of the Agreement also infringes on the exercise of the functions of Parliament in article 79 and article 152 of the Constitution and is therefore, illegal, unconstitutional and unlawful.

The Attorney General, Kiryowa Kiwanuka while responding to the matter during plenary sitting on Wednesday said that the government will look into the recommendations and report back within 90 days and will make recommendation on the next course of action.

Uganda is the leading coffee exporter in Africa, and the second-largest coffee producer in Africa, exporting over 6.5 million bags (60Kg bags)1 between April 2021 and March 2022.

The country is able to attain this production through the efforts of over 1.7million on coffee farm household producers that are part of the value chain offering employment to over 5 million households engaged in different activities.

Background

On April 29th, 2015, Government of Uganda, through the Ministry responsible for Finance, Planning and Economic Development executed a Project Implementation Agreement with Vinci that culminated into signing a Memorandum of Understanding on February 10th 2022.

In April 12th 2022, concerned lawmakers led by Abed Bwanika, the Kimanya-Kabonera Constituency MP, Namugga Goreth (Mawogola South), Lumu Richard (Mityana South), Joyce Bagala Ntwatwa (Mityana District) and Katabazi Francis Katongole (Kalungu East) petitioned the Speaker Anita Among Annet for the House to object to the deal.

The petitioners raised six pointers that they argued would be unfair to coffee farmers, as Vinci would enjoy the monopoly to purchase and export coffee from Uganda. The agreement would also exempt Vinci from all taxes such as Income Tax, Pay as You Earn – PAYE, Excise Duty and National Social Security Fund – NSSF.

Vinci would also be subsidized, giving them special tariff in electricity; and the Government would be obligated to provide infrastructure yet, the will not pay any taxes to the Government, thus violating Coffee Act, laws and policies that relates to the liberalization of the economy.

Against the above grounds, the Speaker directed Parliament’s Committee on Trade, Tourism and Industries on April 12th 2022, to undertake its oversight fact-finding mandate to investigate the matter and report to Parliament.

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