Uganda’s Coffee Investment Consortium Initiative, slated to receive Shs 37 billion in the 2023/24 budget to support the country’s coffee exports, is encountering internal difficulties, leading some founding members to withdraw their involvement.
Jackie Arinda, a founding member from Jada Coffee, expressed concerns, stating, “The consortium has lost its sense of direction, and members are uncertain about its current status.” Arinda also noted that the consortium’s leader, Nelson Tugume, has ceased holding regular meetings to update members on its progress.
The Consortium had appealed to President Museveni, citing challenges in raising capital to meet the demands of coffee exports. In response, President Museveni authorized the Finance Ministry to allocate $10 million (Shs 37 billion) as a coffee export fund. This fund was intended to provide exporters with the necessary capital to purchase substantial quantities of coffee from farmers for processing and export.
However, this proposal faced rejection by Members of Parliament, who labeled it as unfeasible.
The coffee fund project was championed by the Presidential Advisory Committee on Exports and Industrial Development (PACEID), led by Odrek Rwabwogo. In May 2023, Rwabwogo asserted that the coffee fund aimed to support invoices for 21 coffee firms struggling with limited market presence.
Contrary to this assertion, departures from the consortium began with Kwezi Kutesa of Kwezi Coffee and Gerald Katabazi of Volcano Coffee. Katabazi expressed regret for joining the consortium, stating, “I was misled into thinking it was wise. The photo showed senior figures, but the individuals I followed were not those I knew.”
The issue of accountability became a point of contention, with Katabazi leaving a meeting at the Kampala Serena Hotel where accountability concerns were being discussed with Tugume. Katabazi argued for the consortium’s original plan of supporting members in accessing capital to procure coffee from across Uganda for export.
Tensions escalated when Tugume proposed using the coffee fund to purchase coffee for processing at Kyagulanyi Coffee Ltd, a foreign-owned company, a suggestion that was met with resistance from consortium members.
It was reported that, at President Museveni’s direction, the Finance Ministry allocated $1 million (Shs 3.7 billion) to assist consortium members in showcasing their products at Uganda’s trade hub in Serbia. However, members claim that Tugume has yet to provide a proper account of the funds.
In Serbia, President Museveni emphasized the importance of value addition to coffee exports. He stated, “We should make the most of this opportunity because we can fetch $40 per kilogram of processed coffee. Selling a kilogram of unprocessed coffee brings in only $2.5. Can you see the losses we have been incurring?”
Nevertheless, the consortium, originally intended to support Museveni’s vision, is currently experiencing a lack of direction. A member commented, “There is a prevailing sense of disarray within the consortium, and companies are now pursuing independent coffee exports to Serbia and other destinations.”