Frederick Kawuma leaves to his successor at IACO a new African coffee Agreement
During its 60th General Assembly which was held virtually mid-November (read our information The reform of the IACO in progress: opening up to African coffee-consuming countries), the Inter-African Coffee Organization (IACO) adopted a new Agreement allowing the Organization to open up to African coffee importing countries as well as to the private sector. It also opens the door to a rationalization of relations with the African Union and to the possibility of being able to access donors.
In an exclusive interview with CommodAfrica, Frederick Kawuma, IACO Secretary General underlines the major aspects of this new Agreement, the meeting, as well as his eight years heading IACO, and the challenges that his successor, also Ugandan, Solomon Rutega, will have to deal with.
During this last general meeting, the new IACO Agreement was accepted. But on a general aspect, how did the meeting go ?
It was not just a one-time event. We had been discussing this for a long time, over three years. It was in July 2020 that we had an extraordinary General Assembly to look over the new Agreement, page by page. We made a lot of changes up to the point that everyone was satisfied. The Secretariat was to incorporate all these changes and send back to members for any further comment. This was done between July and November. Thus, it was an exciting moment when the new Agreement was adopted by the 60th Annual General Assembly.
What were the points that raised the most questions ?
One of the issues that came up is that if we are bringing in coffee consuming countries in Africa, how will they relate to the others? In the General Assembly, how will their votes and their contributions be determined? We agreed that it would be the same as for the exporting countries, similar to the rules applying at the International Coffee Organization (ICO). In the ICO, the contributions of the exporting countries are based on the volume of exports, while for the consuming countries their contributions are based on their volumes of imports. We will also use the ICO statistics on imports and exports to determine the levels of contribution and the voting power of each Member, respectively.
Right now, in Africa, with the exception of a few countries like Ethiopia, the consumption of coffee is quite low. Moreover, if this type of calculation is done, maybe it will deter consumption and imports ? Or would there be a preferential rate if coffee is imported from other African countries ?
In the Agreement, we have the two categories of Members: exporting and importing Members. It is understood that the exporting Members will consume some coffee but basically, they are net exporters of coffee. And the importing countries are those who do not grow coffee and have to import. So, the ICO figures would be used. We cannot base our calculations on production because, for example, Ethiopia consumes most of the coffee it produces and exports the rest. This explains why Uganda is the biggest contributor to IACO’s budget because Uganda exports more coffee than Ethiopia.
Is that why for the second time it is a Uganda national, Solomon Rutega, who was elected as the new Secretary General to succeed you ?
Not necessarily so. The announcement of the call for nominations from IACO Member States was made at the 59th Annual General Assembly in Nairobi, Kenya, in November 2019, stating the required qualifications and the selection criteria for the new Secretary General. It is these criteria that were used in the interviews by the Board of Directors and the Members also subsequently voted to choose the candidate who met their expectations. In presenting to the members, the candidates each made a presentation of their respective vision statements, outlining their coffee experience and how they intended to move the organisation’s agenda forward, following which the Members cast their votes. That is how the election of the Secretary General was done.
Would you explain the method of calculating the importing country’s contribution ?
The amount that the country has to pay as their contribution will be based on the proportion of their imports compared to the total imports of the other countries. The budget would change every year depending on what the General Assembly agrees upon. But the administrative budget of the Secretariat should not change much because it needs to cater for the secretariat’s operating expenses, with limited variation, while also catering for specific activities that are approved by the General Assembly.
Were African importing countries present at the IACO General Assembly ?
We had inquiries from some of them, but they did not actually join the meeting. Namibia was present and at the end, they expressed interest in joining IACO. An invitation will be sent to them to ratify and sign the agreement once it is deposited with the UNECA Office in Addis Ababa.
So how do you know that the African consuming countries will be interested in joining ?
Sometime back, I met with the Ambassador of Algeria and he told me that they were interested in joining this organisation because Algeria imports a lot of coffee but mostly comes from Europe. Part of it is coffee from Côte d’Ivoire which goes through Europe and then shipped to Algeria—what we usually refer to as “triangular trade”. They mentioned that they would be interested in importing directly. I had other meetings with Egypt, Sudan, South Sudan, Morocco, etc., and they all expressed their interest in IACO. Now, it is a question of diplomatic engagement that will make it happen. The new Secretary General is an Ambassador who is a seasoned diplomat and I believe he will be able to handle this very well.
But all of this will need to be discussed under the auspices of the African Continental Free Trade Area (AfCFTA). The African Continental Free Trade Agreement has certain provisions with respect to zero tariffs on trade between Member States. If coffee is to be shipped directly from Abidjan to Algiers, then it will just be the shipping cost and no additional costs for trans-shipments and other logistical charges.
What are some of the highlights in the new Agreement ?
In the new Agreement, we took into account the current trends, including globalisation and the issue of sustainability. As part of the new objectives, we made specific reference to the UN’s sustainable development goals (SDGs). We also included the issue of the African Union, making sure IACO’s relationship with the AU is mentioned in the Agreement. This is important because when IACO was founded in 1960, it was before the Organisation of African Unity (OAU) was formed, which was transformed into the African Union (AU). The AU has been going through a process of rationalising all agencies under it, and IACO had not yet been officially brought on board, but which we hope will happen very soon. Thus, we needed to make reference to the AU in the Agreement. IACO must be careful to follow the agenda of the African Union.
Once the AU Summit endorses the motion to take on coffee as one of the AU’s strategic crops and IACO is recognised as a specialised agency of the African Union, it will lead the way to many other partnerships. I have been pushing forth on this for a while, because that way IACO will have the freedom to deal with all the different multilateral partners, like the World Bank, USAID and so forth. At the moment, development partners deal bilaterally with sovereign states or directly with the AU through a Memorandum of Understanding (MoU), but the AU does not yet have an MoU with IACO. Thus, there is currently no framework for dealings between the World Bank and IACO, for instance.
Do you mean to say that IACO today cannot have direct funding from the European Union (EU), for example, for a coffee project ?
We have been in discussion with the EU, to support regional coffee projects and they have interest in this because they believe there is value in a regional approach and the avoidance of duplication of efforts. However, they asked IACO to make sure that the support requested for from the EU is endorsed by the African Union. We have been this, in that our submissions to the EU have gone through the office of the AU Commissioner for Agriculture. We have been in discussion with the AU on coffee matters for the past six years, so it is on record at the AU that coffee was under discussion. In fact, IACO has been involved in many consultative meetings and workshops hosted by the AU.
Besides the new agreement, what were the other main issues during the annual meeting ?
We had the election of the Secretary General and the appointment of new Directors who were confirmed by the General Assembly, one for Research and Development and one for Economic affairs who is replacing the outgoing Director whose term ends in February 2021.
We also had the High Level Policy Forum with two key areas addressed by the IACO Chairman, the Patron, the AU Commissioner for Agriculture and different ministers of IACO Member States: the issue of Covid-19 and its impact on the coffee industry in Africa and the promotion of coffee consumption in Africa. The Ministers outlined policy actions taken in dealing with the two key issues. It was noted that the issues of specific policies in countries that do not encourage domestic value addition need to be addressed, in order to promote the industry, especially considering young entrepreneurs, particularly women entrepreneurs who are venturing into the coffee business. We need to create a policy environment that supports them—policies that will help them to have access to affordable financing and removing the various bottlenecks in the business. In some countries, internal regulations make it difficult for these businesses to operate.
How is the project of IACO’s new building coming along ?
The project was interrupted by the surge of the Covid-19 pandemic. The Secretariat will continue to engage with the partners and when the details are resolved such as when the ground-breaking will occur, communication will be sent out to our Members.
How is IACO’s financial health in this world crisis ?
We are pushing on, with the same issues that most pan-African organisations face. This is one of the challenges my successor will have to deal with. The budget had been reduced by 5%, in comparison with last year’s budget. The 5% is significant, considering the installation of the new leaders, etc which have to be catered for.
What is IACO’s budget for 2021 ?
It is just under € 640 000, and the continuing challenge is to have all Member States being up-to-date in their contribution payments. Even at the ICO, this is a very big issue. Under the new IACO Agreement, compliance of Member States will be critical, more so that Members that are not compliant might be excluded. Only Members that are in right standing in their contributions will benefit from the new initiatives such as the African Coffee Facility and other partnerships. I have launched the construction of the IACO headquarters, and this building will probably raise some revenue that can go into projects that can be beneficial to Member States. If the organisation is to carry out any project in a country and the country is not compliant, then it will be excluded.
Can you say a word on the African Coffee Facility ?
When I came into office in 2013, you might remember that when we met in Gabon, in February 2013, I mentioned that I would work towards the creation of an African Coffee Development Fund. And I have been working on this initiative ever since I came into office. You realise that some of these things take a long time and require perseverance. In fact, before I took office, I had already written a concept note on this African Coffee development Fund. Now it is part of the new IACO Agreement. The African Coffee Facility is the beginning of this, as a partnership with different development partners.
What is the difference between the Fund and the Facility ?
The Africa Coffee Facility is the partnership that we are now working out with the different institutions where the African Export-Import Bank (Afreximbank) has already allocated a substantial part of the required money and we should be able to launch this Facility as soon as possible. The African Union will be the umbrella under which the operation will take place. This Facility is a project, bringing many partners together in support of the African coffee industry, with a specific timeline. However, the African Coffee Development Fund, which is to be set up as one of the organs under the IACO Agreement, will be an institution that will take lessons from the operation of the Facility and become part and parcel of IACO’s structure in providing support to the coffee value chain in Africa in the longer term.
And the private sector is coming into IACO …
Yes. They will not come in as Members, but they will participate in what we call the Private Sector Consultative Group which will include the private sector of both the exporting and importing countries. They will attend IACO meetings as part of the delegations of their respective Member States. This Private Sector Consultative Group is now part of the new IACO Agreement. Its role will be to advise the General Assembly on matters related to trade and the coffee value chain in general. I started introducing the private sector with the launch of the African Coffee Symposium, which has been very successful: this year was our 8th edition. The relevance of IACO to the industry will become more and more evident as IACO increasingly involves the private sector in its activities. In fact, at the ICO, I was part of the discussions that led to the creation of the Private Sector Committee in 1995, eventually evolving into the Private Sector Consultative Board which was later embedded in the International Coffee Agreement (ICA) of 2007.
What will be your job profile as Africa’s new ambassador for coffee and how will it fit in with IACO ?
Basically, I will leave IACO, but I will not be leaving coffee. I am still an Ambassador for the coffee industry in Africa. There will be no budget from IACO because the goodwill ambassador is an honorary position, and it is not financed by the organisation. I will be a spokesperson for African coffee, using every opportunity to promote coffee, not just Uganda coffee but African coffee. I hope to work closely with the IACO Secretariat, the IACO chairman and also with the patron who is currently the former Prime Minister of Ethiopia (HE Hailemariam DESALEGN). I am going to discuss with the new Secretary General, to know what his ideas are and how he wants me to help him.
You are at the end of your two mandates. What are the lessons that you can draw ?
Having been in this office for 8 years, I have learned that you need to listen to people and need to understand the different situations the people are dealing with in the different countries. My successor will need to be aware of the different cultural issues. The anglophone and francophone dichotomy is something the Secretary General needs to be careful about and be able to respect.
What do you see as the basic difference between the Francophone and the Anglophone coffee worlds ?
In Francophone countries, you have the relics of previous CAISTAB systems with safety nets for the producers, with minimum guarantee prices; this reflects particular expectations from the Francophone countries. That is not the case in most Anglophone countries.
The other lesson I can draw from my mandates is that I hoped progress could be made in the sharing of genetic material, which is something we have been unable to resolve. This is one of the issues that the new leadership will need to deal with and take up, especially the new Director of Research and Development. The African Coffee Research Network (ACRN), [Réseau African de Recherche sur le Café (RECA)], is now one of the organs of IACO embedded in the new Agreement. ACRN will advise the general assembly on issues of research and development. The new Director of Research and Development will be able to use the ACRN network to move the agenda forward on the sharing of this genetic material, as it is a delicate issue where the research is financed by sovereign States on national financial resources. Mechanisms need to be found for the sharing of the research outputs and also agree on the monetary aspect. When this is successful, there will be increased collaborative research and it will promote the sharing of research outputs for mutual benefits, as well as avoid the duplication of efforts.