Economist Dr. Ezra Suruma raised concerns about the government’s decision to merge the Uganda Coffee Development Authority with the Ministry of Agriculture, citing potential setbacks for the coffee sector.
The government’s recent decision to integrate the Uganda Coffee Development Authority (UCDA) into the Ministry of Agriculture is drawing significant attention and concern. Dr. Ezra Suruma, a prominent Ugandan economist, shared his insights on the matter, arguing that the change could undermine the autonomy and effectiveness that UCDA has enjoyed since its establishment in 1990.
Dr. Suruma explained that the UCDA was initially set up as a self-sustaining entity through a small service charge of 1% on coffee exports, known as a “cess.” This funding model allowed UCDA to function independently without relying on the government budget. However, the cess later increased to 2%, which led to substantial revenue for the UCDA as coffee production rose sharply. The Ministry of Finance then decided to take control of the revenue, making UCDA dependent on government funding.
Key Points on UCDA’s Financial Changes Details:-
Initial Funding Model (1990) 1% cess on coffee exports to cover UCDA’s expenditures
Revenue Increase Cess raised to 2% amid rising coffee exports
Government Intervention Ministry of Finance took over cess revenue
Current Status UCDA set to become part of Ministry of Agriculture
Dr. Suruma expressed concern that absorbing the UCDA into the Ministry of Agriculture could reduce service efficiency. He noted that countries with established coffee industries, such as Costa Rica and Colombia, maintain autonomous institutions to oversee coffee exports, ensuring expert and specialized management of their coffee sectors. Uganda, he emphasized, would lose a valuable institution by transferring UCDA’s responsibilities to a government department.
Drawing a parallel to past events, Dr. Suruma referenced the privatization push of the late 1980s, when international advisors recommended selling government banks, arguing they were unprofitable. Although Uganda Commercial Bank (UCB) was later restored to profitability, the same advisors then advocated for its sale. According to Dr. Suruma, such moves reflect underlying motives that do not always serve the country’s best interests.
In his view, the government’s decision could impact the quality and control over Uganda’s coffee exports, citing the challenge that coffee exporters might face in finding specialized staff within a general ministry department. To illustrate, he noted recent delays experienced by those seeking phytosanitary certificates from the Ministry of Agriculture.
Dr. Suruma suggested that the decision to dismantle the UCDA could benefit from wider consultation, perhaps through a public referendum, to gauge the national sentiment on maintaining specialized institutions. He stressed that institutions like UCDA possess decades of expertise that contribute to efficient service delivery, contrasting this move with the idea of integrating Mulago Hospital or Makerere University as mere departments under broader government ministries.
Concluding his remarks, Dr. Suruma reiterated the importance of specialized institutions in Uganda’s future and prayed for wisdom in decision making processes that protect the country’s resources and prosperity.
By: Maureen Atuhaire
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