The Leader of the Opposition (LoP), Hon. Joel Ssenyonyi, has called on the government to stop any further financial support to Inspire Africa Coffee until the terms of the partnership are clarified. The government has been financing the private entity to establish a coffee factory as part of a last-mile value-addition initiative in Ntungamo District.
Ssenyonyi made the statement while presenting a report of his oversight visit to the factory at a parliamentary sitting chaired by Speaker Anita Among. He noted that there is no documented agreement between the government and the company to define their working relationship.
“We found that there is no Memorandum of Understanding between the Government of Uganda and this entity. So the manner in which money was extended to the entity is not clear. It is wrong for taxpayers’ money to be spent without any clearly defined binding relationship and no documentation whatsoever,” Ssenyonyi said.
He explained that although the factory’s proprietor, Nelson Tugume, spoke of a co-investment arrangement, it remains unclear whether the deal involves joint shareholding, a grant, or a bailout.
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Concerns over government investment and value for money
Ssenyonyi questioned the amount of money the government had injected into the factory. He called for an official explanation of the total funds allocated to the project and an assessment of the financial benefits.
“Government should explain how much money has so far been injected into this project. The cost-benefit analysis of investing in this entity should be examined,” he said.
He expressed concerns over the lack of transparency in the allocation of public funds to private enterprises, warning that such funding arrangements, if unclear, could lead to public distrust.
“As long as usage of tax payers’ money is shrouded in mystery, there will always be suspicion about such bailouts given that they are accessed by a few people,” he added.
During the 2023-2024 financial year, the government committed to establishing “a Tertiary Hub for last mile Coffee Value Addition” in Ntungamo District through the Science, Technology and Innovation Secretariat under the Office of the President. This was done in partnership with the Coffee Investment Consortium Uganda (CICU) and Inspire Africa Coffee.
Tugume stated that the factory is set to produce various coffee products, including instant coffee, drip coffee, malt coffee, coffee energy drinks, and beauty cosmetics.
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Call for regional expansion and clear funding procedures
Ssenyonyi proposed the construction of similar factories in Bugisu and the central region to align with the government’s National Development Plan III. He noted that many farmers face difficulties in transporting coffee from remote districts to Ntungamo for processing.
He also called for the government to establish a clear process for private enterprises seeking financial support.
“Uganda has a lot of young and innovative entrepreneurs who only lack funding. If the government comes out clearly on the formalities, then more Ugandans could benefit as opposed to just a few,” he said.
Uganda is currently Africa’s leading coffee exporter and the second-largest producer on the continent. In the 2023/2024 financial year, the country exported 6.13 million bags of coffee, generating US$1.14 billion.
The government is expected to provide further clarification on the terms of the Inspire Africa Coffee partnership and address the concerns raised by the Opposition.
