How a Ugandan trader conquered western market

Ugandan coffee entrepreneur Andrew Rugasira made very many foreign trips and business pitches as he tried to make his brand, Good African Coffee, reach the global market. Majority were unfruitful.

Still, what stood out in these talks was his oft-repeated proclamation that Africa needs trade opportunities and not aid handouts to create wealth for its people.

He notes that Africa has received over $1 trillion in aid over the last 50 years and yet it remains mired in poverty and disease.

Fast forward to today and Good African Coffee is the first African-owned coffee brand to sell directly to British and US stores.

Getting to this point was not easy, as the social entrepreneur chronicles in first-person in A Good African Story: How a Small Company Built a Global Coffee Brand. They were years of business operations, triumphs and trials, discoveries and lessons.

Rugasira’s journey with Good African Coffee began in 2003 (or 2004 as he alternates in the book). Then it was known as ‘Rwenzori Finest Coffee’ before a name change that would enable it capture the ‘trade not aid’ vision.

GOOD AFRICAN STORY

Good African Coffee has since helped thousands of farmers earn a decent living, send their children to school and escape a spiral of debt.

With this in mind, and through the tale of his personal life and the company’s growth as a case study, Rugasira uses A Good African Story to argue that trade has achieved what years of aid failed to deliver.

The writer provides context through the causes of institutional failure in many African countries, possible reasons for preponderance of expatriate or non-indigenous capital in the Ugandan economy and how the country’s stratified economic structure traces its roots to its colonial history.

Then he gives a political and economic history of Uganda as seen in logistics, markets, access to capital and perseverance, before he draws lessons from Good African Coffee’s journey, reflecting on its business model.

Rugasira’s ideologies are reminiscent of Zambian, Oxford-trained economist Dambisa Moyo’s Dead Aid: Why Aid is not Working and How There is a Better Way for Africa, which is a robust critique of aid industries and which proposes for aid to be cut off in the immediate term for African governments to seek financing from global capital markets.

It doesn’t come as a surprise that he alluded to it at one point — part of his numerous references that sometimes make A Good African Story read like a research paper.

Rugasira doesn’t take us to the conceptualisation of Good African Coffee – something a reader would like to know about.

Instead, he starts where he tries to get his product into the South African, British and American markets.

But the venture into foreign markets notwithstanding, the impact Rugasira’s Good African Coffee is leaving on Ugandan communities is remarkable.

The farmers it works with used to be exploited by middlemen who mortgaged coffee farms at usury interest rates.

CYNICAL FARMERS

For these and other reasons, Good African Coffee couldn’t hack in in some areas. For instance, in 2004, the company set out to gain foothold in creating a farmer supply network in Mbale District.

However, limited financial resources and human resources dovetailed with a lot of cynicism among farmers.

This is one of the points Rugasira excels in highlighting.

Kasese District was next. The farmers and conditions there were more receptive.

“This would become the place where our Good African model found a community and a home, was tested, and with time, generated the transformation of the farmers and their communities we had hoped for,” Rugasira writes.

In the first coffee-buying season there in March 2005, Good African Coffee brought 6 tonnes of coffee from farmers, and five months later, in the second coffee-buying season, 54 tonnes.

Good African Coffee placed coffees in South African supermarket chain Shoprite Checker’s in 2004, Britain’s Waitrose and Sainsbury’s in 2005 and 2006 while by 2009 had started selling online in the US.

Capital shortage – as it is for agricultural initiatives which need it for the long term but mostly get it for the short term – was a limitation and it led to the end of the Shoprite link months after its launch.

But that’s not the only problem. A bigger picture is foreign aid, for which Rugasira observes that most aid programmes are poorly structured, fungible, insincere and conditional.

Even after the Shoprite setback, Rugasira remained on course. Persistence is key to his approach.

The results for Good African Coffee’s work have been outstanding: improved quality of harvest and a growth in volumes of coffee delivered from 7 tonnes in 2004, supplied by several hundred farmers, to 430 tonnes in 2011, supplied by more than 7,000 farmers.

The price for quality coffee also increased from USD1.25 per kg in 2004 to USD4.25 per kg in 2011.

VALUABLE LESSONS

Rugasira’s book comes in handy because very few African entrepreneurs document their experiences.

Besides, it gives very valuable lessons in business and life.

Except it offers too much political and economic history and leaves little discussion on Good African Coffee.

Errors here and there take the shine off the book too.

“…of the twenty-four licensed commercial banks in uganda, two are indigenous ugandan, five are Asian-owned, and sixteen are registered as foreign banks”, the author writes, for example, leaving out the twenty-fourth company.

Rusagira’s point is that building a sustainable trade framework and reducing dependency on handouts will help Africa take its destiny in its own hands.

That’s debatable. What isn’t is that if Good African Coffee has made the wonderful strides it has completed through challenges, mistakes, hopes, and discouragements, many other companies in Africa can do the same.