{"id":28103,"date":"2022-07-11T07:23:30","date_gmt":"2022-07-11T07:23:30","guid":{"rendered":"https:\/\/bartalks.net\/?p=28103"},"modified":"2022-07-11T07:23:37","modified_gmt":"2022-07-11T07:23:37","slug":"uganda-contract-with-uvcc-supported-by-attorney-general-and-president","status":"publish","type":"post","link":"https:\/\/bartalks.net\/uganda-contract-with-uvcc-supported-by-attorney-general-and-president\/","title":{"rendered":"UGANDA CONTRACT WITH UVCC SUPPORTED BY ATTORNEY GENERAL AND PRESIDENT"},"content":{"rendered":"\n
The contract between the mysterious Italian businesswoman, Enrica Pinetti\u2019s Uganda Vinci Coffee Company Limited (UVCC) and the government of Uganda was thought to be dead just a few weeks ago after the Sectoral Committee on Trade, Tourism, and Industry in Parliament unanimously voted for its termination, saying that it contravened the Constitution and other tax laws.<\/p>\n\n\n\n
Now, however, the Attorney General, Kiryowa Kiwanuka, has come to its defence saying it has broken no laws.<\/p>\n\n\n\n
I have been informed by my lawyers in the Attorney General’s Chambers that legal due diligence was conducted prior to clearance of the deed and it was determined that the company was validly existing, incorporated under the laws of Uganda, had its returns up to date and the parties to the Agreement were authorized and had the capacity to execute the agreement on behalf of the parties\u2019<\/p>Kiryowa Kiwanuka<\/em>, Attorney General<\/cite><\/blockquote>\n\n\n\n
The suspiciously favourable coffee contract awarded to UVCC in 2015 saw the Uganda government supply the land, and pay for the building of infrastructure to support the development of a coffee processing plant, funded by UVCC. <\/p>\n\n\n\n
In addition to having the taxpayer cover a large part of the start-up costs with the provision of land, road infrastructure and utilities, the Uganda government used laws designed to attract foreign investment to throw everything it could into the deal. Government officials tirelessly identified every possible tax the company might need to pay, and diligently wrote them off to clear a path for the deal. No import duties, for example, nor VAT. Excise duties were scrapped, as was stamp duty, and UVCC needn\u2019t worry about inconvenient Corporation tax, because that was swept aside as well.<\/p>\n\n\n\n
While the benefits to UVCC stack up, what the company will provide to Uganda is less clear.<\/p>\n\n\n\n
In fact, eliminating cost obligations to the state was only part of the offer the government made to the company. The contract also ensured UVCC has priority over purchasing Uganda coffee. The wording around this has been debated, and it\u2019s unclear if this means, as was originally interpreted, that farmers would be obliged to offer their crop to UVCC for the right of first refusal, or as officials now claim, it meant something else. The \u2018something\u2019 has yet to be defined.<\/p>\n\n\n\n
While the benefits to UVCC stack up, what the company will provide to Uganda is less clear.<\/p><\/blockquote><\/figure>\n\n\n\n
It seems to me, on the face of what we know, that the intention was to give UVCC purchasing power in the market which would allow them to influence or even set, prices for farmers. This could have been devastating for many, especially those who were producing higher quality coffee, who may have been forced to accept a lower price than they could otherwise get on free export market.<\/p>\n\n\n\n
The Attorney General Says It\u2019s Legal, but Does That Mean It\u2019s a Good Deal for Uganda?<\/h2>\n\n\n\n
Kiryowa Kiwanuka, said that all the conditions were offered legally under the Investment Code Act of 2019. The trouble is that this Act gives a lot of flexibility to the Authority awarding the grants. I read PwC\u2019s summary evaluation of the Act which you can find here<\/a>.<\/p>\n\n\n\n