The much-touted Coffee Investment Consortium Initiative, which is set to receive Shs 37bn in the new 2023/24 budget to promote Uganda’s coffee exports, has developed cracks with its founder members throwing in the towel.
One of the founding members of the Consortium, Jackie Arinda of Jada Coffee, said the “consortium has lost direction and members don’t know what is going on.”
Arinda said the consortium’s leader, Nelson Tugume, “is not accountable at all and no longer holds meetings to update members on the progress of the consortium’s work.”
The Consortium had reached out to President Museveni, saying it had had a challenge raising capital to meet the coffee export demands.
President Museveni authorised the Finance Ministry to set aside $10 million (Shs 37 billion) as a coffee export fund to allow exporters access to the required capital to procure large quantities of coffee from farmers for value addition and export.
For example, if Jada Coffee received an export order of 1,000 metric tons of coffee, the company would borrow money from the Coffee Fund to buy the required coffee and export it immediately.
MPs had rejected this idea, saying the project was a non-starter.
The coffee fund project is promoted by the Presidential Advisory Committee on Exports and Industrial Development (PACEID) under the leadership of Odrek Rwabwogo.
In May 2023, Rwabwogo said the coffee fund was meant to underwrite invoices for 21 coffee firms that had had limited market presence for years.
“5 of the 13 sectors now have orders of up to USD 550 million, and we have created a revolving fund for firms to help underwrite invoices to help them supply these orders. If you want to help, don’t listen to negativity,” he said.
However, this does not reflect the reality on the ground.
Kwezi Kutesa of Kwezi Coffee and Gerald Katabazi of Volcano Coffee were the first to leave the coffee consortium before Arinda called it quits.
On July 1, Katabazi said he regretted joining the consortium.
“Now I regret why I appeared in this photo,” said Katabazi in reference to a group photograph of the consortium’s members.
“Well, I was duped into thinking it was wise. The photo came with very senior citizens of the land, but the fellows I followed aren’t those whom I knew, to be honest, never. Now I have to go with this damage to my coffee career because I didn’t listen to my friends,” he added.
Accountability
Katabazi is said to have stormed out of a meeting at the Kampala Serena Hotel, which was meant to discuss issues of accountability with Tugume.
“Katabazi argued that the original plan of supporting consortium members to access capital to buy coffee from all parts of Uganda for export should be maintained,” recalled a source who attended the meeting.
“However, Tugume brought the idea of using the coffee fund to buy coffee for processing at the foreigner-owned Kyagulanyi Coffee Ltd, a suggestion members did not buy into.”
ChimpReports has learned that on President Museveni’s orders, the Finance Ministry gave the consortium $1 million (Shs 3.7 billion) to help the consortium’s members attend and showcase their products at Uganda’s trade hub in Serbia.
However, members say Tugume has yet to account for the $1 million fund.
“When we asked Tugume to give us a brief and accountability of the funds upon returning from Serbia, he kept telling us that we will meet soon,” said a consortium member who preferred anonymity to speak freely.
Tugume was not readily available for comment.
“When we called Tugume, money was leaving the account. So we asked him, ‘Why are you not telling us the truth?’ By the time we met, he had withdrawn 2.6bn.
So we asked him to show us how the money was spent. He didn’t consult us,’” the source added.
In Serbia, Museveni called for value addition to coffee exports.
“We should utilise this chance because we shall be able to get 40 USD from a kilogram of processed coffee. A kilogram of unprocessed coffee is sold at only 2.5 USD; do you see how we have been making losses? This is the fight I am in now,” said Museveni.
But the consortium, which was expected to help Museveni achieve his goals, is now in disarray.
“There is no sense of direction in the consortium,” said a member, adding, “Companies are now exporting on their own to Serbia and other destinations.”
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