NAEB: Graft at washing stations killing Rwanda coffee
Felicien Ntaganira, the manager of Mayogi coffee washing station in
Northern Province, speaks about efforts to revive the facility.
Photo/Cyril Ndegeya
By ALEX NGARAMBE Rwanda Today
Posted Friday, February 14 2014 at 21:43
In Summary
Rwanda's coffee is considered among the best in the world but the high
level of financial mismanagement among the processors is eroding
quality.
Corruption with impunity has also seen production decline because
farmers do not have markets for their produce as a result of closed
washing stations.
Rampant corruption among managers of coffee washing stations across
the country is threatening the quality of one of the leading exports.
Rwanda's coffee is considered among the best in the world but the high
level of financial mismanagement among the processors is eroding
quality. Corruption with impunity has also seen production decline
because farmers do not have markets for their produce as a result of
closed washing stations.
According to National Agricultural and Exports Board (NAEB), six
stations did not operate last year, mainly because of corrupt
officials who swindled funds.
Stations borrow funds from commercial banks and micro-finance
institutions which must be paid with interest. When funds are
mismanaged, banks seize the factory's assets that were staked as
collateral.
"Officials managing washing stations swindle funds with impunity and
there are no measures taken to recover this money, which is affecting
the country's production. This can't go on like this," said Celeste
Gatarayiha, the head of coffee division in NAEB.
Competing with the best
Rwandan coffee is competing on the international market in terms of
quality and volumes with some of the best coffees from around the
world, notably from Brazil, Kenya and Ethiopia. With limited exports,
any disruptions to the flow of the country's foreign exchange would
widen the trade imbalance.
"It is not possible to keep working and financing corrupt companies;
thus the need to show accountability and transparency if they want
support from the government," added Mr Gatarayiha.
However, although it maintains that the situation is alarming and
should be checked to avoid exercise running out of control, NAEB did
not reveal how much is lost through corruption.
Mayogi Coffee Washing Station in Northern Province is among the closed
processors struggling to attract financial support after management
raided its coffers.
NAEB is accusing Mayogi management of failure to account for more than
Rwf8 million meant to develop the factory and add value to produce.
"We closed our station because our former manager disappeared with the
funds that we had solicited for the factory work, but we have managed
to recover half of what we lost and we hope the government can now
come to our rescue after showing willingness to reopen," said Felicien
Ntaganira, the new head of Mayogi.
The government has emphasised value addition for all exports in an
effort to earn more revenue.
Regardless of the corruption in the coffee sector and the subsequent
closure of many washing stations, however, the number of processors
increased last year compared with the year before. Last year, stations
across the country reached 220, up from 210 in 2012, although most of
them are still operating below capacity.
Decreased farm get prices
However, the coffee sector last year also suffered because of
decreased farm get prices, which stood at Rwf143 per kilogramme, down
from Rwf170 a year before, while the cost of production for a
kilogramme was at Rwf80.
http://www.theeastafrican.co.ke/Rwanda/Business/NAEB--Graft-at-washing-stations-killing-Rwanda-coffee-/-/1433224/2207358/-/dfhvn2z/-/index.html
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