By Nathan Ochunge, Standard Digital, 12/02/2017
Coffee business has been thriving in Uganda, while in Kenya, it’s a sad state of affairs. Clearly, something is amiss and the current coffee statistics tell it all.
Museveni Uganda’s Gross Domestic Product rose from 4.9 per cent in 2016 to 5.5 per cent this year with earnings from coffee rising from US$ 444 million in 2015 to US$576 million in 2016.
But in Kenya, volumes of coffee being taken for auctioning at the Nairobi Coffee Exchange have declined from 31,370 metric tonnes in 2016 to 29,309 metric tonnes this year, which is a 6.57 per cent decrease.
The number of bags of coffee bought at auction also decreased from 514,321 that were offered for sale in 2016 to 479,373 bags at end of last month, representing a 6.79 per cent decrease. The question that begs is why is Uganda’s coffee sector doing so well while Kenya’s is struggling?
Last week my former primary schoolmate Wafula (not real name) who is in the coffee smuggling business contacted Sunday Standard and asked me whether we could meet at Lwakhakha at the Kenya-Uganda border. We agreed to meet at Lwandanyi shopping centre which is about a kilometre to the Kenya-Uganda border at Lwakhakha.
Wafula arrived in a convoy of three lorries ferrying beer to Lwandanyi, Sirisia and Chwele. This Ugandan beer is outlawed in Kenya because it does not meet the local standards. After distributing all the beer to local bars in Bungoma West and Chwele, we drove to Chepkube where the lorries were loaded with sacks of coffee cherries. He paid Sh367,200 for the cherries which when converted to Ugandan currency amounts to Sh4.1 million.
Upon reaching the border, three police officers manning the Kenyan side were given Sh7,000 each to allow the vehicles to cross over. Four officers from the Ugandan side were paid Sh10,000 each meaning Wafula parted with Sh61,000 for bribing Kenya and Uganda police officers manning the border.
The first stop was at Mbale town at 10pm in Uganda where we were joined by other 13 lorries making a total of 15 . The other 13 had green coffee which had undergone pulping.
The Arab trader I met that night was leading the way with a contingent of 10 Ugandan police officers who were armed. Stringent measures
We reached Kampala at 3:33am and to my surprise, all the sacks were loaded into two trailers that were waiting at a nearby bush that is two kilometres away from the Central Business District.
I was not allowed to accompany them where the two trailers were waiting. Instead, I was booked in a hotel, some 500 metres from where Wafula was meeting with the other businessmen.
Earlier on when heading to Mbale from Lwakhakha border, Wafula had confided in me that senior government officials from Uganda and Kenya were directly involved in the business and that the Arab business moguls were untouchable.
Cheptais OCS Hassan Godana, however, said it has been difficult to make arrests since the cartels are now using children to smuggle coffee along the porous border.
“We have increased patrols to stop the illegal trade,” he explains. Western regional coordinator Moses Ombati said stringent measures are needed to curb smuggling. “If locals farmers could be paid well and police work extra hard to dismantle the cartels, then the industry could pick up again,” he said.
Eric Wanyela, the chairman of the Bungoma Western Coffee Farmer’s Union, asked the government to revamp existing coffee factories, pay farmers well and brand local coffee. He said the coffee industry was bedeviled by poor marketing, delayed and low payments to farmers.
Uganda is ranked among the world’s top coffee producers and in 2016 the sector recorded a 27 per cent growth. Wafula claims 60 per cent of that coffee is stolen from Kenya, although this is inconceivable, especially because he says much of this coffee comes from the counties of Bungoma and Trans Nzoia which are low producers.
“Coffee farmers smuggling the produce to Uganda are paid Sh250 per kilo but they get Sh38 per kilo from coffee societies in Kenya or Sh80 from coffee cartels in case they buy directly from the farmer,” he said.
According to experts, Bungoma alone produces 10 to 12 million kilogrammes of coffee cherry annually and 7,267 acres is under the crop belonging to 20 cooperative societies. Dr Charles Nzai, a lecturer at Kenyatta University School of Economics, said if the smuggling is not contained, the Kenyan economy would lose significantly.
Dr Nzai said Kenya can lodge a complaint through the World Trade Organisation and other agencies that deal with the marketing of coffee to help seal the loopholes of coffee smuggling.
“Uganda earns significant volumes of foreign exchange from coffee exports which has seen a rise in its GDP at the expense of the Kenyan economy,” said Dr Nzai.
The scholar says the government must stop relying on primary products like coffee, explaining with significant value addition, foreign exchange will increase.