The government of Uganda has allocated Shs60 billion towards the completion and operationalization of the Coffee Value Addition Plant in Ntungamo District.
The Coffee Value Addition Plant, being overseen by Nelson Tugume, the proprietor of Inspire Africa Coffee Group, is projected to be a ‘Tertiary Hub for last mile Coffee Value Addition.”
It is being constructed through the Science, Technology and Innovation (STI) Secretariat in the Office of the President, under a private partnership arrangement with the Coffee Investment Consortium Uganda (CICU) and Inspire Africa Coffee, both privately registered entities.
The construction of this Coffee Value Addition facility began in October 2023, and had been projected to be completed by December 2024, but after the government injected over Shs37 billion, the facility is yet to be completed, which necessitated the additional Shs60 billion, making a total of Shs97 billion.
On its completion, the factory is expected to produce various Coffee products, including Instant Coffee, Drip Coffee, Malt Coffee, Coffee energy drinks, plus beauty Cosmetics.
It is believed that the additional funding of Shs60 billion will be appropriately utilized by Tugume and his team to ensure that the Value Addition Plant becomes fully operational within the shortest time possible.
Coffee Vital For Uganda’s Economic Growth
It is important to note that one of coffee is Uganda’s biggest exports and this was emphasized information from the Ministry of Finance and Economic Planning indicates that Uganda is currently the leading coffee exporter in Africa, and the second largest coffee producer in Africa, having exported 6.13 million bags in FY2023/2024 valued at USD 1.144 Billion (about Shs 4.18 trillion).
This fact was emphasized during the Stanbic Bank Economic Insights Forum by Mr. Christopher Legilisho, a leading East African Economist, who reiterated that coffee and gold were Uganda’s biggest exports for the financial year 2023/2024.
In addition, a report from the Ministry of Finance about the performance of the economy as of June 2024 indicates that “Uganda’s merchandise export earnings increased by 39.4% from USD 639.86 million in April 2024 to USD 891.97 million in May 2024. This increase was mainly driven by higher earnings from coffee and gold exports during the month…”
Will Tugume Pull It Off?
President Yoweri Kaguta Museveni, in May last year, inspected the progress of work at the Plant and hailed Tugume for having conceived such a great idea of value addition to Uganda’s coffee.
Having started in October 2023, construction works at the Plant are at over 60 per cent now, and completion of works had been projected for December 2024, although delays in the acquisition of funds forced the investors to revise the project time. It only remains a matter of time to see whether or not Tugume and his team will bring this project to fruition.
Boost to Uganda’s Economy
According to the Minister of Agriculture, Animal Industry and Fisheries, Hon. Frank Tumwebaze, being the seventh producer globally, Uganda’s goal is to produce high-quality coffee, support coffee stakeholders, and strengthen the country’s position in the global coffee market. As such, the Value Addition Plant will have a profound impact on Uganda’s economy through raking in more revenue for the country.
By providing a facility for coffee value addition, the Plant is expected to increase Uganda’s coffee exports by 20% annually, generating an additional USD150 million (about Shs550.2 billion) in revenue. This growth is expected to create over 5,000 jobs, both directly and indirectly, and increase the income of local farmers by 30%.
Global Coffee Market Trends
In February 2025, coffee prices experienced a decline, with the March position closing at USD 5534 per ton for Robusta and USD 419.75 per lb for Arabica. Despite this decline, the strength of the Brazilian Real and fears of continued coffee supply shortages supported coffee prices.
Benchmark for Future Development
The Inspire Africa Coffee Value Addition Plant is expected to serve as a benchmark for future Plants in Busoga and Buganda, which the government intends to construct. The plant’s success is expected to attract an additional USD 500 million (over Shs1.8 trillion) in investments to Uganda’s coffee sector over the next five years.
The Inspire Africa Coffee Value Addition Plant is thus a game-changer for Uganda’s coffee industry. By providing a facility for coffee value addition, the plant will create employment opportunities, boost earnings for local farmers, and drive economic growth.