Ugandan, foreign mafias behind controversial coffee deal

Ugandans across the country continue to castigate the government for signing a coffee agreement that promises to give new company Uganda Vinci Coffee Company Limited (UVCCL) 10 years of tax holiday, even though the deal also makes UVCCL a monopoly of procuring coffee and exporting it to Europe.

The controversial agreement, the first of its kind in Uganda’s coffee industry comes at the time when the country has pulled out of the International Coffee Organisation (ICO), with government claiming ICO was mistreating Uganda businesswise.

There is also a coffee law that was recently passed and disfavours poor Ugandan farmers and other small businesses involved in the coffee value chain. The unpopular law requires that all those involved in the coffee value chain must be licensed. It stipulates punitive measures for those caught involved in the business without a valid license.

The law, according to analysts, is aimed at pushing poor farmers out of the coffee industry so that the rich can take over the production and exportation of Uganda’s leading crop as far as foreign exchange is concerned. Analysts say that law was sponsored by mafias who want to take over Uganda’s coffee industry as soon as possible.

Further, economic analysts who have watched government sign dubious agreements in the recent years, say the coffee deal is the latest among other agreements that Ugandan and foreign mafias have brought on the table to cheat Ugandans and leave them in poverty.

The analysts who work in the private and government departments claim the coffee deal did not just happen. They say the owners of UVCCL have been pushing for it over the last few years, having noticed the steady increase in the production of coffee in the country.

“The Coffee Roadmap that was launched by President Yoweri Museveni continues to yield positive results as the country targets to produce 20 million bags of coffee by 2025-2030,” a government worker in the ministry of agriculture told Eagle Online, adding that modern day mafias are strategists who are educated.

“The mafias are so rich that they employ economists who advise them on where to invest the money. “The economists can forecast the business that will be lucrative in the next five to 10 years,” another economist in the finance ministry told this reporter, even though he preferred to remain anonymous because of the sensitivity of the matter.

He added: “Mafias know that the market for Uganda’s coffee is still virgin, especially with the Asian countries getting interested. Don’t forget about China,” he said, urging parliament to review the new coffee law as they scrutinize UVCCL agreement.

Uganda produces both Arabica and Robusta coffee. The country’s prides itself of being the birthplace of Robusta as well as producing the best Arabica coffee known for its sweet aroma.

Another government worker says mafias-both local and foreign have paraded Enrica Penetti as the face of UVCCL. “The lady doesn’t have the US$ 10 million. It will come from mafias who have already secured free land at Namanve.   You have seen that a principal signatory was missing on the side of UVCCL. It was intentional because dubious people fear due diligence to be carried against them,” he said, adding, “I have tried to search for the profile UVCCL on the internet, but no information about that company. Government must be careful.”

Other deals where mafias had a hand

“Mafias have taken advantage of the liberalization policy in Uganda to steal our resources. This mainly started as government embarked on the journey of structural adjustment policies (SAPS). Some of us still cry of why Uganda Commercial Bank (UCB) was given away just like that. “SAPS were used as a scapegoat but the real pushers were the mafias who reaped billions of shillings.”

The dubious Umeme deal

President Yoweri Museveni has of recent gotten frustrated with power distributor Umeme as he thinks the company has failed to deliver power to Ugandans. He at one time threatened to cancel the contract Umeme signed with government in 2005. But to do that, taxpayers would lose over Shs250 billion as compensation. That was the work of mafias. “The mafias use economists and lawyers who outplay government appointees in signing the contracts,” a lawyer in Kampala said, adding that the Umeme contract that is supposed to end in 2025 is one of the worst he has seen. “You wonder whether government officials were sleeping. But mafias can do anything to appease government officials.”

Renovation of Entebbe Airport

When government needed money to fix Entebbe International Airport, it went to  China Eximbank for USD 200 million and the money was availed. However, the bank required that all revenues generated by the airport be used to repay the loan on a priority basis for 20 years. “This condition, which was previously undisclosed, is extraordinary given that the airport—a public infrastructure asset—existed and generated substantial government revenue for 42 years before the loan was issued,” it was reported. Remember that China Eximbank demanded the right to reject or approve the annual operating budgets of the Uganda Civil Aviation Authority (UCAA), which is the government entity responsible for Entebbe International Airport. Only mafias can advise entities to put in place such conditions on borrowing.

Mining sector

As those in the coffee sector complain, local Ugandans earning their living in the mining sector are also crying. Artisan gold miners in Mubende and other areas are under pressure to vacate the mining areas. This is the work of mafia, who influence law making in the country. “There are big people who want us out of the mines,” said a minor. They bribe government officials to chase even us some of us have mining licenses. The mafias and big businesspersons who don’t want small dealers in the mines have set up mining companies in the names of their friends, children and other relatives. Uganda Registration Services Bureau (URSB) has that information but you have to pay for you to access it.

There is a school of thought that some Karimojong are not happy with the mining activities. They believe mafias want to take their mineral wealth. Politicians from the region are not happy either. “We would want that we participate in the mining processes, but we are not allowed. We don’t want people we don’t know to take away our wealth which we have guarded for centuries,” a politician who administers one of the districts in the region said, adding that some people they don’t know have acquired chunks of land through clandestine means.

Oil and gas

The mafias are also readying themselves to earn big in the Oil and gas sector. If when there is a provision by government to have small companies participate in the sector, this kind of companies find it hard due to conditions that they have to meet. “If they can invade the coffee sector, it means they are able to go for the oil and gas sector. Wait you will see people,” an economist in the oil sector said, adding that lack of money is a big disadvantage to Ugandan small businesses.

Construction of roads

Sources say the mafia have also earned big in road construction projects. Uganda has one of the most expensive roads, yet they get destroyed within a short period of time. “The reason is that mafias who front the contractors take some of the money as commission,” a Kampala politician said.

All in all mafias in Uganda have pushed for business laws that disadvantage the masses. What makes matters worse is that they money they make unfairly is taken out of the country, leaving nationals poor.