Trade minister accused of unfair policies on rice importation

Parliament has directed the Minister of State for Trade, Hon. Harriet Ntabazi, to withdraw her directive on what they termed, ‘unfair trade policy on rice importation’.

On 21 April 2022, Ntabazi issued a directive to the Commissioner, Customs Uganda Revenue Authority (URA) where she directed the Authority to stop clearing Value Added Tax (VAT) exempted rice imports at the borders.

This directive prompted rice traders, specifically the Kampala Rice Traders Association to petition Parliament to intervene, claiming this directive was unfair and repugnant.  

In their petition, rice traders also decried Ntabazi’s directive to install the Rice Agribusiness Development Foundation (RADFO) as an apex body with autonomous powers to import rice, which the traders said was fleecing them and frustrating trade.

The matter was subsequently referred to the Parliamentary Committee on Tourism, Trade and Industry for investigation.

While presenting the committee report during the plenary sitting on Wednesday, 10 August 2022, the committee chairperson, Hon. Mwine Mpaka said that Ntabazi exceeded her powers and issued orders that have distorted trade order in the rice trade.
“The minister irregularly and without lawful authority instituted RADFO as the apex body in the rice sub sector without involving the rice traders and associations. The actions of the minister are disruptive and do not encourage trade order in the rice trade,” Hon Mpaka said.

The committee also noted that Ntabazi acted unfairly when she issued directives to URA to stop rice imports without giving rice traders a fair hearing.
“The Minister of Trade, Hon Ntabazi should with immediate effect withdraw the illegal, irregular, unlawful, unprecedented, illicit letter designating RADFO as the apex body in regard to the rice trade,” he said.

The committee report which was adopted by the House, called upon the Inspector General of Government (IGG) to investigate the actions of  Ntabazi for alleged abuse of office and corruption.
“The Minister of State for Trade, Hon. Harriet Ntabazi's actions tantamount to abuse of office, corruption, facilitating corrupt transactions with agents, bribery, influence peddling, conflict of interest which are all crimes provided for under the anti-corruption Act of 2009,” the Committee report read in part.

The committee recommended that the Inspectorate of Government carries out further investigations with the aim of prosecution of the minister.
The report added  that the minister should take political responsibility for her actions.

According to Mpaka, RADFO has been conniving with URA officials to fleece the rice importers of the Shs180,000 per ton which is exorbitant  compared to Shs40,000 per ton that they used to pay before this new directive.
“The committee recommends that civil action be instituted against RADFO with the aim of obtaining compensation amounting to Shs17.8 billion which was illegally, unlawfully, illegitimately, dishonestly, fraudulently and unpatriotically collected from the traders,” Mpaka said.

It is alleged that  RADFO only declared Shs1 billion to government out of the Shs17.8 billion collected.

Moroto Municipality MP, Hon. Francis Adome called for a forensic audit on RADFO on suspicion that their operations are syndicated with intention to defraud traders.
“I think this matter is beyond the minister in whatever happened, especially on the loss of money. I believe there are those behind this that we need to dig deeply because this seems to be an organisation created to work for the interest of others,”  Adome said.

Ntabazi, however, said the main objective of putting private sector entities as an apex body was to enhance proper self regulation to create stability and trade order in the sector especially at the border.

She said that in RADFO’s terms and reference, they were not supposed to collect any money from rice traders on behalf of government.
“The decision of government to assign RADFO as an apex body was not a selective or one person’s decision. It was a collective decision by all members including the rice associations…The terms and reference of RADFO were never to collect any money from anybody and it wasn’t written in the letters that I wrote,” Ntabazi said.