The Leader of Opposition in Parliament, Hon. Joel Ssenyonyi, has called on the Government to disclose the exact amount of public funds invested in the construction of the Ntungamo Coffee Factory.
Ssenyonyi made the remarks on Tuesday while presenting a statement on his oversight visit to the factory. He said every coin of public money injected into this project must be accounted for, starting with knowing the exact figures.
He raised that while the idea of Government offering support and tax incentives to private companies to boost investment is not bad, on several occasions, the manner in which many of the companies are given contracts is not credible.
“There is no clear procedure for how this gets done. Additionally, agreements are never signed between the Government and these private entities to spell out the terms and conditions of the support extended. Most disturbingly, there is usually no value for the money extended to these entities.”
He said that as long as these concerns remain unaddressed, the use of public funds will continue to be shrouded in mystery, and there will always be suspicion about these bailouts, as they are accessed by a few people who probably have connections in the Government.
“Government should come out clearly on its relationship with Inspire Africa Coffee, which warranted the disbursement of public funds to this private entity. Parliament should stop any further disbursements to this entity until a clear and rational memorandum of understanding is reached,” Ssenyonyi said.
Calls for a clear Government-Private sector framework
In addition, he proposed the creation of a clear procedure for private entities seeking government support, arguing that many young and innovative Ugandan entrepreneurs struggle due to a lack of funding.
In addition, he highlighted that the government should establish a clear procedure for how private entities can receive government support. “Uganda has many young and innovative entrepreneurs who lack funding. If the government clearly outlines the formalities, more Ugandans could benefit, rather than just a few,” he added.
Transparency concerns over Ntungamo Coffee Factory funding
On December 11, 2024, the Office of the Leader of the Opposition conducted a visit to the Ntungamo Coffee Factory. The visit was in line with Section 6E (I) of the Administration of Parliament (Amendment) Act, 2005, which empowers the Leader of the Opposition to oversee and hold the government accountable.
During the FY 2023/24, the Government committed to establishing “a Tertiary Hub for Last Mile Coffee Value Addition” in Ntungamo District, through the Science, Technology, and Innovation (STI) Secretariat in the Office of the President, in partnership with the Coffee Investment Consortium Uganda (CICU) and Ntungamo Coffee Factory, both privately registered entities.
Construction of the Coffee Value Addition facility began in October 2023 and was projected to be completed by December 2024. According to Ssenyonyi, the factory is expected to produce a range of coffee products, including instant coffee, drip coffee, malt coffee, coffee energy drinks, and beauty cosmetics.
However, since this strategic government intervention began, various stakeholders and policymakers have raised concerns about its implementation.
“Therefore, the primary objective of this oversight visit was to further investigate and verify all matters related to the raised concerns, including funding and transparency issues,” Ssenyonyi noted.
During FY 2023/24, the government allocated UGX 37 billion (approx. USD 10 million) in the National Budget to support coffee value chain development under a newly created Vote 167 in the STI Secretariat, Office of the President. Additionally, the Annual Budget estimates for FY 2024/25 included another UGX 75 billion (approx. USD 20.3 million) to support coffee value addition initiatives.
To date, Parliament has appropriated a total of UGX 112 billion (approx. USD 30.3 million) for coffee value addition initiatives. Some of these initiatives include promoting Ugandan coffee globally through Coffee Trade Hubs and establishing the “Tertiary Hub for Last Mile Coffee Value Addition” in Ntungamo District, implemented by Ntungamo Coffee Factory, which according to Mr. Nelson Tugume, the proprietor, is estimated to cost USD 122 million (about UGX 451 billion).
Uganda is currently the leading coffee exporter in Africa and the second-largest coffee producer on the continent, having exported 6.13 million bags in FY 2023/2024, valued at USD 1.144 billion.
