Thread by @Opiaiya

1. A few thoughts on the #Coffee debate with regard to what comes next ( a short thread). Government incentives such as tax relief, land etc are essentially equivalent to commercial and monetary value that the state "invests" in the given project

2. In short, incentives are a proprietary tool by the government to give up expected revenue, say from tax or other sources, in order to advance some greater public purpose. In the case of the Vinci deal, the stated purpose is value addition to coffee

3. The decision to extend equity ( through incentives etc) to a project is not only about strategic value of the project. Any public investment must pass a commercial, strategic and political test. Much of the defence of Vinci deal has been only that it is legal.

4. There is no dispute that the incentives were lawfully granted or that they make ( to a degree) strategic sense. The other issue of the commercial and political is important. As seen from the approaches in the oil sector today, equity extended through policy ( local content)

5. ..is designed to encourage local participation, provide jobs to Ugandans, transfer technology and anchor value chains in domestic eco-systems. These days I sit at tables were such decisions are evaluated. As such I can see that it is within range to fix the coffee deal if

6. The Vinci Agreement were restructured as a Joint Venture in which these public aims ( local participation etc) are the basis for the generous public investment the current agreement has extended to the company.

7. Local content is basically about domestic participation and ownership ( not beneficiation as in who eats). It meets a public demand that common resources are ploughed into our collective interests and satisfies the commercial and political test.

8. I can understand therefore how confusing it was for some members of our community that a national crop like coffee, a high-value strategic crop was not subjected to these now well known standards of public financing.

9. At worse, it signalled to investors, the risk of expropriation of lucrative parts of the economy since the obvious reasons for governments to act with protective strategies ( to enhance local content) were not immediately visible in the original agreement.

10. Those responsible for revisiting the same should look at the Oil Sectors local content approaches, advice on a robust Joint Venture that is transparent and inclusive of the interest of the domestic coffee community to justify the large public investment in such a deal.

11. The Oil Sector has also taught over the last 14 years the value of public consultation with those affected by government interventions. It has now been reported that affected constituencies in the coffee sector were not adequately consulted.

12. Finally, even in the Oil&Gas sector presently, the award of contracts ( especially subcontracting) by the IOCs through their main contractors in an adhoc and non-transparent manner, not consulting widely to improve local content participation poses serious risks

13. For Local Content to truly succeed, as we have now learnt from the present challenges, those with power to make decisions have to consult widely, patiently, honestly and fairly or risk instability as core constituencies rebel and counter mobilize.

14. Public policy benefits from its own mistakes as it assumes new lessons and adapts from its failures. So we move. ENDS