Lawmakers on Parliament’s Budget Committee have raised queries about a proposal by Uganda Coffee Development Authority (UCDA) to spend UGX 35 billion on the installation of a coffee traceability system which is intended to monitor the quality of coffee produced in Uganda.
The MPs also questioned the proposal by the Ministry of Energy and Mineral Development to sink $40.5 million (about UGX154.359 billion) in the installation of 22 mineral weighbridges in order to curb revenue leakage lost through unquantified minerals mined in Uganda.
Coffee
The contagious coffee issue was raised in a report presented to the Budget Committee by Janet Okori-Moe, Chairperson, Committee on Agriculture on the sector’s 2024/25 national budget framework paper. In the report, Uganda Coffee Development Authority (UCDA) had indicated the UGX 35 billion for the coffee traceability system as one of the unfunded priorities.
According to Okori-Moe, the UCDA is seeking to establish a national traceability system in order to comply with regulations by the European Union that bars the production of agriculture products like coffee from deforested areas.
The traceability system will register coffee value chain actors (farmers, nursery operators, processors, roasters and exporters). It is one of the key regulations of the European Union for coffee exportation. UCDA requires UGX 35 billion for establishment of this system but no funds were provided in the budget for 2024/24, explained Akori-Moe.
Dickson Kateshumbwa, MP for Sheema Municipality raised a red flag on the request presented by the Committee on Agriculture.
When you say that UCDA requires Shs35Bn to establish a stability system, is this made on Mars, what kind of system is this, Shs35Bn? Have you interrogated them to tell you, have you benchmarked? asked Kateshumbwa.
In the documents availed to the Budget Committee, UCDA is also seeking for additional UGX 13.952 billion to cater for some other unfunded critical issues like; UGX 1.566 billion to promote Uganda’s coffee in China, another UGX 1.66 billion to promote Uganda’s coffee in Middle East and Maghreb, while another UGX 1.2 billion is required to construct a coffee hub in Kyambogo.
The Authority is also seeking UGX 3 billion for the provision of a primary coffee processing equipment, while UGX 3.5 billion is needed to support coffee research, while UGX 2.8 billion is needed for the management of coffee pests and diseases.
Kateshumbwa yet again raised queries on this desired expenditure saying that there is no need to spend on promotion of coffee in China, yet there is already an un utilised market there.
Then you look at establishing a coffee hub in Kyambogo at UGX 1.2 billion to promote people to drink coffee really? You need to help us with some of these things, UGX 1.5 billion for promotion of coffee in China. There is already a market of coffee in China that we aren’t fulfilling. We need to interrogate some of these figures, otherwise, it becomes hard for us to rationalise some of these figures, he added.
Additionally, the MPs also raised concern over the decision by the Government to merge funds meant for the purchase of coffee seedling inside the Parish Development Model (PDM), arguing that such a move is likely to derail the progress Uganda attained in the coffee sector.
This was after Okori-Moe informed the Budget Committee that although the volume of coffee produced in Uganda increased from 4.7million bags in 2017/28 to 7.8million in 2022/23, but with the inception of the PDM, the distribution of coffee seedlings by UCDA was halted because it was envisaged that farmers would buy their own seedlings with the PDM disbursements.
The Committee observed that coffee should not have been a PDM crop because its maturity period is longer than the PDM payback period. In addition, the cost of procuring coffee seedlings is higher than the amount stipulated in the PDM funding guidelines. The Committee however noted that this has already started eating into the coffee roadmap, responded Akori-Moe.
However, Otuke north MP, Paul Omara supported the recommendation by the Committee on Agriculture saying that UCDA needs all the support it needs if it is to deliver.
The coffee seedling distribution with UCDA must continue. We shouldn’t mix this animal with PDM, so we need to consolidate, support UCDA and give it all the necessary support with money so that it can continue with what it has been doing, he said.
The development comes at the time UCDA reported that coffee exports in 2023 totalled 6.12 million bags worth $965.14 million (about UGX3.678 trillion) compared to 5.63 million bags worth $ 860.45 million (about UGX 3.278 trillion) earned in 2022.
The Agriculture Committee further noted that there are outstanding arrears for coffee nursery operators who supplied coffee seedlings worth UGX 49.9 billion which the Ministry of Finance had earlier committed to paying but has not honoured for the last two financial years.
The delay in clearing the arrears has grossly affected the coffee nursery operators with some facing litigation. A budget for the procurement of coffee seedlings will be reinstated under UCDA so as to increase production to meet the strategic objective of the coffee roadmap of producing 20 million bags by 2023, said Okori-Moe.
Mineral weighbridge
Meanwhile, questions were also raised about the plans by the Ministry of Energy and Mineral Development to sink $40.5 million ( about UGX 154.359 billion) in the installation of 22 mineral weighbridges in order to curb revenue leakage lost through unquantified minerals mined in Uganda.
The item was included in the report of the Committee on Environment and Natural Resources Committee. The report was presented by Committee Chairperson, Emmanuel Otaala.
Otaala reported that there is a need for provision of additional resources to a tune of UGX 235 billion to the mineral development programme in order to enable the sector to meet its potential of generating revenue.
People are mining, we don’t know how much minerals are being mined, the country isn’t getting value for these minerals, and yet, we could do something. So the Ministry of Energy and Mineral Development intends to install 22 weigh bridges in key mining centre access routes and a centralised access system and mineral regulation infrastructure that project would cost Uganda, $40.5Mn (about UGX 154.359 billion). For this financial year, the proposal is that we get at least UGX 154 billion to enable the Ministry to install 20 additional weighbridges, this current financial year, the Ministry is installing two, reported Otaala.
Tororo North MP, Geoffrey Ekanya wondered why taxpayers money should be spent in such a project yet all companies mining in Uganda have weigh bridges and all Government should do is require them to link their weigh bridges to a centralised government system for monitoring.
I am aware that the companies that are involved in mining have all installed weigh bridges so all you need to do is to link those weigh bridges to the Ministry of Energy and Minerals, as a policy so that you don’t even need to buy one weigh bridge. Any body dealing in mining or any activity should be required to install the weigh bridge, without it, don’t mine said Ekanya.
He added,
They are going to install a network and link all the weighbridges and calibrate it to the Ministry of Energy standards, so the ones you are acquiring, you are acquiring for ghosts.
Ekanya was backed by Moses Ogwal, MP for Dokolo North who said that such weighbridges may become
A big centre for corruption.
The Ministry of Minerals also made another request of additional UGX 12.6 billion for the maintenance and certification of the national mineral laboratory.
However, Ekanya and Ogwal disagreed on this request with the former saying that there is no need to invest in the minerals laboratories while the latter was in support.
But as you know, all companies dealing in the manufacture of minerals have laboratories; Makerere University, Busitema Universities all have laboratories. All laboratories in Uganda are certified and all companies dealing in minerals go to Uganda Chamber of Mines and Minerals. You can’t deal in minerals without this kind of certification, argued Ekanya.
Ogwal on the other hand instituted that;
I think we need to invest more in laboratories for minerals, how are you going to handle issues of exports? I think issues of laboratories and easing the ability of exports to come so that we earn money because minerals is where we get a lot of money.
It is now up to the wisdom of the Budget Committee to include these recommendations for additional fundings while presenting to Parliament its report on the Budget Framework.
