Kampala-Uganda/Newsday: The secretary to the Treasury Ramathan Ggoobi Thursday struggled to justify what many Uganda Ugandan have perceived as a raw deal saying assist to lift up the economy, and that after all- the attorney general cleared it.
In a press conference at the ministry of finance offices, on April 14, 2022 Ggoobi said that the agreement that gives an Italian woman, Enrica Pinetti exclusive rights to handle coffee business in Uganda is a better deal than meets the eye.
“The Coffee plant will utilize only about 6.4% of Uganda’s coffee production initially and 5% at full capacity when production moves from ( 420,000 tons to 1.2 million tons),” Ggoobi said.
Adding: “Incentives are provided to investors by law and any person in same business can get similar benefits. attorney general cleared the agreement.”
Ggoobi who was witness to the deal signed on February 10, 2022 is faced with a heavy task of justifying this raw deal in which Pinetti under her company- Uganda Vinci Coffee Company Limited (UVCC).
On Wednesday, MPs raised concerns over an agreement signed between the government uvCC.
According to the document dated February 10, 2022, Ramathan Ggoobi the secretary to the Treasury witnessed on behalf of the government while Matia Kasaija the finance minister signed. Enrica Pinetti, an Italian investor and board chairperson of UVCC while Moses Matovu signed as Company Secretary.
The company was given free land in the Industrial and Business Park at Namanve after it indicated its capability of establishing a coffee processing facility in Kampala. The company will be given exclusive rights to buy all Uganda’s coffee even before the government can look at other players. Its concession will end in 2032, but it is subject to renewal.
The same investor received promissory notes to a tune of $379.7m for the construction of the stalled Lubowa hospital and has now reportedly received half of the additional Shs 667.8bn for the coffee project.
Abed Bwanika, the shadow minister for Agriculture tabled the document titled: Deed of Amendment and Restatement before the Tuesday plenary sitting.
Bwanika said that the document seeks to alienate Ugandans that are involved in coffee production and trade out of business by giving monopoly of purchase and export coffee from Uganda to the company.
“This document, madam speaker gives them power, madam speaker, that nobody will procure coffee, nobody will export coffee unless this company gets the quarter that they want…The provision of the Coffee Act (52) says that the Coffee Authority should be the one to come up with option and avenues where our coffee should be traded but this agreement gives power to this company, you know when you can determine how much to buy, when to buy you also determine the price…They exempt this company from all taxes for 10 years,” said Bwanika.
He also reported the proposed exemption of taxes by the company for ten years.
“This document has provisions which are going to exempt the company from paying all taxes in the country including Income tax, Pay As You Earn, Excise duty, and NSSF. This document has provisions that seek to subsidize this company giving them a special tariff of 5 cents per unit in terms of electricity,” Bwanika said.
Bwanika also highlighted provisions that are going to provide the company money to build its infrastructure yet it is going to pay zero tax to the country.
“This document has provisions that are going to provide for this company money that is going to build the infrastructure for this company for water, for roads yet this company is going to pay zero tax to the people of Uganda. Rt. Hon speaker, the provisions of this document, violate the laws of the Republic of Uganda. The constitution of the Republic of Uganda is contravened. The law of coffee, the Coffee Act, the laws and policies in regard to liberalization are all violated by the provisions of this document. Rt. Hon. speaker, the provisions of this document, they seek to render the people of Uganda who survive from coffee production and trade out of the economy, out of business and they are going to be rendered slaves in their own country,” he added.
Bwanika challenged the legality of the agreement and asked the speaker of parliament, Anita Among to refer the document to a committee of parliament for investigations. Richard Lumu, the Mityana South MP said that the agreement was usurping powers of parliament it was never involved.
Dan Atwijukire Kimosho, the Kazo County MP said that it was wrong for the ministry of Finance to sign an agreement with the investor who was guaranteed funds to set up a specialized hospital in Lubowa, which is yet to be constructed.
“In regard to that specific arrangement, at least the information available unless the government comforts us is that the same person benefiting from that arrangement is the person we gave money for Lubowa hospital and there is no result, Rt. Hon speaker on ground. It has been very difficult Rt Hon speaker for even this parliament supervise works going on at Lubowa. We have been crying of medical tourism. I was shocked Rt. Hon speaker when I saw ministry of Finance handing over the same kind of arrangement and entering in that same agreement with the same person, Rt. Hon speaker that we’re failing to supervise after guaranteeing her a lot of money which has not been put to use,” said Kimosho.
Gyavira Ssemwanga, the Buyamba County MP queried the issue of tax exemptions by the ministry of Finance. He wondered how the government intends to extend services to Ugandans amidst several companies that are exempted from taxes.
Among tasked the committee of Trade to study the initial agreement, the addendums as well as the deed, and carry out an investigation and report back to parliament. She also directed the ministry of Finance to report to the committee on Finance in regard to tax exemptions by the company.
Mathias Mpuuga, the Leader of Opposition said that the ministry of Finance should be asked to surrender all documents in their possession regarding the coffee project. He also tasked the Attorney General to explain how the agreement came into effect.
Agriculture minister Frank Tumwebaze distanced himself from the agreement, tweeting; “Clarification: A Note to journalists calling me & seeking to know more about the coffee agreement recently signed between @GovUganda [government of Uganda] with one investor; be advised that neither myself nor @MAAIF_Uganda [ministry of Agriculture] is a party/ privy to that agreement…It was signed on behalf of @GovUganda by @mofpedU [ministry of Finance]. So i advise, that all queries regarding the same be directed to the ministry of finance ( @mofpedU ) for correct information & reporting. Thank you!”
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