Uganda: June 10, 2002

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And now for a trade war with a wrinkle. Ugandas President Yoweri Museveni has declared a trade war against the international conglomerate Nestle. The cause is coffee (and for what its worth, Uganda is the worlds fourth largest coffee grower). Museveni contends that Nestle should build a new coffee processing plant in Uganda. Nestle (apparently) has other ideas. Museveni said that Uganda now plans to sell its coffee directly to the United States. Uganda will use the US governments African Growth and Opportunities Act (AGOA). AFP quoted Museveni as saying "...I must say to the American government, this (AGOA) is the first good action that they have done in the last 500 years." Hyperbolic rhetoric? Yes, but the trade war as leverage against middlemen is an interesting twist. Its not that Nestle is wrong who knows what the precise details are on the particular deal. Cronyism and corruption are rife in Africa, and large scale projects are easy targets for government graft. However, there are many emerging opportunities for direct sales from producers to consumers world-wide, and Museveni is on to something. Uganda has enough home grown business talent to handle the sales of a home grown product. Is this merely political arm-wrestling with a big corporation or Uganda actually taking advantage of the new direct marketing made possible by free trade opportunities and an awareness of how to capitalize on globalization? Well see how this develops. (Austin Bay)


 

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