#OutToLunch Government can grow coffee and sell to Vinci

#OutToLunch Government can grow coffee and sell to Vinci

By Denis Jjuuko

In just 14 pages, A4 size, independent Uganda gave away perhaps the most generous concession ever on any agricultural product, taking back the country to the days of the Imperial British Company – a colonial enterprise that subjugated farmers and the entire population and left previously wealthy nations in abject poverty.

The ministry of finance entered into an agreement with controversial businesswoman Enrica Pinetti — she, you guessed right, of Lubowa International Specialized Hospital to be the sole buyer and exporter of Uganda’s coffee. After collecting tons of money in promissory notes and other forms, Enrica is still struggling to build a plinth wall. The ministry of finance claimed, of all things, that “heavy rains” have delayed the project!

The agreement as controversial as the so-called investor will see her company Uganda Vinci Coffee Company, a novice in the sector (and we heard registered on the same day the agreement was signed), given “priority of supply of coffee….before registering any contract or acknowledging any arrangement for the export of coffee beans (including screen 18 and above), so that the company will have ample supply of coffee to sustain its operations.”

Vinci claims that it will build a 60,000-tonne capacity plant in Namanve starting with a paltry 27,000 tonnes but the agreement is silent on when Vinci will grow its capacity to the 60,000-tonne mark. I highly doubt that they will ever get anywhere close to the promised capacity and there is no clause in the agreement that penalizes them if they don’t.

In the year ending October 2021, Uganda exported 6.55 million 60kg-bags translating into 393,000 tonnes. Vinci will only be able to process, if they ever build the plant, a paltry 6.8% for which they get a concession similar to those given to British companies during the colonial period. The rest of the coffee, Vinci will just export for the next 10 years without remitting any taxes and determining even the price of electricity they will consume.

The other laughable clause in the agreement is that Vinci will employ a mere 246 workers who they will even disenfranchise by not contributing to NSSF for 10 years. A company employing just 246 workers should never be given control of a sector that employs perhaps a quarter of the country’s population.

The ministry of finance claims that this is the best deal ever for Uganda and “nobody else asked.” I think nobody thought that anybody could sign such an agreement hence the lack of other players with better capacity than Vinci to ask. But Uganda, it seems is the epitome of “ask and you shall be given.” The controversy of such a deal is that Uganda doesn’t own any coffee. If it was oil or some other minerals that belong to the country, nobody would be complaining.

As a smallholder coffee farmer, I pay for everything — seedlings, irrigation, fertilizers, transport, and wages without any support from government. Government should, therefore, not “undertake to take all reasonable measures to give priority of supply of coffee” to Vinci or anybody else as they don’t at the moment own any coffee. Coffee belongs to farmers and therefore government can’t decide who they sell it to.

Let Vinci compete for my beans and I will decide whether I sell to them or the competitor next door. Traders should also decide whether to sell to buyers in Sudan, Germany, China, Italy or anywhere else and not be forced to sell to one company. It takes only 18 months for coffee to mature and become harvestable. I don’t know how long Vinci will take to build her factory but given her performance with the Lubowa hospital project, this will take years to be built if it will ever be built.

As Vinci builds its factory, government can start planting coffee on its vast land (or even acquire more land) which they can then “undertake to take all reasonable measures to give priority of supply of coffee” to Vinci. I don’t think any coffee stakeholder or farmer will raise any finger when beans from the government’s farms are given to a single buyer.

The writer is a communication and visibility consultant. djjuuko@gmail.com

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Out to Lunch

#OutToLunch: Make cylinders of 1kg, 2kg if gas is to replace charcoal

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Out to Lunch

#OutToLunch: Medical apprenticeship programs critical in improving diagnosis and treatment

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Out to Lunch

#OutToLunch: Uber’s abrupt exit calls for regulation of international brands to protect users

By Denis Jjuuko Ten years ago, Kampala was all the rage. Uber, the global taxi hailing app launched in Kampala with fanfare. The razzmatazz that comes with a global brand that promises to change the world. All our transport problems, at least in Kampala, would be sorted. It was cool to order a Uber or arrive at a fancy party in one. If you hadn’t installed the app, you were being left behind. There was no need to buy a car. Uber would sort that at the fraction of the cost. If you had a car, it was so cool to use it as a Uber on your way to or from work. And if you didn’t like your boss, you could quit your job and become your own boss as a Uber driver. It wouldn’t get any fancy than that. Some people cashed out their savings, bought a few corollas, got their cousins who had previously graduated from university and made them Uber drivers. Side hustle had never been so simple. Special hire drivers cried. Calls placed to their previous customers went unanswered. The suitor had a new lover. You were exploitative. Uber transported someone to wherever they wanted at the cost of a chapati! Some young people decided to create Uber for all sorts of things. Looking for somebody to wash your clothes over the weekend, a “uber” was created for that. Need a truck to transport something? There was a “uber” for it. Need a boda? Well, another “uber” was created before Uber itself introduced bodas. Innovation hubs were full of ideas with young people dressed in hoodies spending all their time trying to create the next Uber. To be fair, it wasn’t just in Uganda. Every new innovation has somebody trying to replicate it for another industry. With apps like Uber and AirBnB and their early global success, other platforms for gig work or sharing were created everywhere. UpWork, Fiverr, DoorDash… the list is endless. We were told the sharing economy was the new thing. That we didn’t need to own stuff. We could easily share. The problem though with international brands like Uber is that they can wake up and make a decision that affects many people. Like they did when they announced that they will no longer be available in Uganda. And within a few minutes, they were gone. They didn’t even have the courtesy to inform the drivers signed up on their app for at least a week. I believe some were even still processing the news and maybe even parked at malls waiting for clients only to realize that the application had gone mute. I believe those who hadn’t checked their communications platforms restarted their phones several times. Developing economies like Uganda shouldn’t just allow these brands to come in, do and go as they wish. They can’t just be making abrupt decisions from Silicon Valley. Why couldn’t Uber give time before exiting the country? They could have given a 90-day notice so that their drivers and customers have enough time to prepare. To operate here, the government should force them to follow some rules and regulations. Usually when they start offering service in smaller economies like ours, there is something they want which isn’t direct revenue. It is global presence that enables them to have an explosive initial public offering on the New York Stock Exchange or attract some funding. Once they achieve those goals, their mission is over and can do whatever they want especially where there is no regulation. In markets where they are regulated, they can’t just wake up and announce that they have closed. Also, the actions of brands like Uber mean that there is a need to identify our challenges and find applicable solutions. For many years, I wonder whether Uber drivers made any money. The rates were so low prompting many of them to try to negotiate out of the app. What had made Uber appealing to drivers was the near guarantee of a return trip. Unlike a special hire (cab), the driver would be able to find a customer after dropping off somebody. That increasingly became difficult yet the rates remained low. When fuel prices went up, Uber didn’t respond appropriately. Apparently, increments had to follow some policy created based on the American or western European economy. Bad roads and traffic jams were never factored in. Ugandans largely drive old cars which means that they consume a lot of fuel and susceptible to breakdowns. If the roads are potholed, maintenance and repair become costly. An unregulated global brand wouldn’t care much about that while setting rates especially when they don’t own the asset that guarantees their return (25% of each trip in the case of Uber). Regulation of global brands is critical in protecting the interests of users. The writer is a communication and visibility consultant. djjuuko@gmail.com

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