Introduction There are a number of investment opportunities in the coffee sub-sector, which investors can take advantage of, right from production at the farm to processing into finished product.
Farming Uganda produces two types of coffee: Robusta and Arabica in the proportions of 80% and 20%, respectively. Arabica coffee is grown at altitudes ranging between 1,300-2,300 m above sea level while Robusta is grown at an a altitude ranging from 900-1,500 m in areas around the Lake Victoria basin. Being astride the equator, Uganda has two distinct harvesting seasons: Oct/Dec & May/Jul. north and south of the equator respectively. With regard to fly crop the two hemispheres alternate in harvest. Advantages at the farm level include:
Availability of land and fertile soils ideal for coffee production,
Good climate characterized by a bi-annual rainfall distribution,
Availability of labour and no taxes in the agricultural sector.
Primary Processing through establishment of central washing stations The policy is to increase the portion of washed coffees therefore there are opportunities in investing in Central washing stations. Any investment taken in this area shall be complementing government’s initiatives under Strategic Export Programme (SEP). The ongoing coffee-replanting programme puts emphasis on creation of catchment areas of red cherries for any Central pulperies that may come up.
Exporting Coffee Entry into the coffee export sector requires a company to be incorporated in Uganda, have access to export grading facilities, execute a performance bond with a reputable insurance company or bank of not less than US $ 25,000. There is also an annual export license at a fee of Shs. 1,500,000/=.
Coffee Shops & Roasting Facilities With the presence of Internet Cafés in virtually every town, the youth are getting more and more enthusiastic about coffee drinking. Investors could take advantage of this upcoming lucrative market through established outlets and roasting units. Currently, there are nine (9) coffee shops registered with UCDA and Uganda Coffee Roasters Association (UCRA), most of which are in Kampala.
Input Suppliers/Stockists There is an opportunity to invest in supply of inputs to enhance productivity in the agricultural sector in general. In the coffee subsector farmers have been organized into grassroots coffee farmers associations, input supplies can be sold to groups in bulk. The required inputs include implements, fertilizers, pesticides, irrigation equipment, moisture analyzers etc.
Investment Incentives Additional information on investment opportunities and incentives that include concessional rates on plant and machinery and start-up cost spread over four years, duty and tax free import of plant and machinery etc. can be obtained from Uganda Investment Authority (UIA). The following references: “The Investor’s Handbook”, “An Investment Guide to Uganda: Opportunities and Conditions” and “Brief Guide to Investing in Uganda”, provide useful information on investment incentives offered in Uganda to prospective investors. Major investment incentives are:
Fully Liberalised Economy: All sectors are liberalized; free inflow and outflow of capital; 100% foreign ownership of investment permitted.
Market Access: Uganda enjoys a unique location; Member of the Commonwealth market (COMESA), East Africa Community (EAC) and Inter Governmental Authority on Development (IGAD); duty and quota free access into USA and EU markets.
Strong Natural Resource Base: Abundant rainfall; unexploited mineral deposits;
Goodwill from Government: Strong public-private partnership; Improving infrastructure
Trainable labour with a turn-over of 10,000 graduates per year
Security of investment: Guaranteed under the Uganda Constitution and international institutions-such as MIGA (Multi Lateral Investment Guarantee Agency); Oversees Private Investment Corporation (OPIC) of US; CREFM (Convention on the Recognition and Eof Foreign Arbiral award); GATS (General Agreement on Trade in Services), TRIMS, TRIPS (see website: www.ugandainvest.com or www.ugandainvest.net; e-mail:
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Opportunities 