Trade Not Aid: The Impact of Good African Coffee

Good African Coffee was established in 2003 and has ever since grown into an international coffee brand giving thousands of farmers in Uganda a fair and steady income. The coffee beans have been sold in hundreds of supermarkets across the UK and numerous African countries. Its founder is the Ugandan businessman Andrew Rugasira, who graduated in Law and Economics from the University of London. He holds the conviction that trade, if initiated and managed by African entrepreneurs, is the real solution to poverty on the continent. He believes that establishing trade systems is a sustainable way to provide income to a population and is more fruitful than aid’s charity. Rugasira explains his journey and his philosophy in his 2013 book A Good African Story: “Aid and its policy prescriptions don’t address the structural constraints facing most African producers and entrepreneurs who are trying to do business in the global market.”

Through his company, Rugasira attempted to operationalize his conviction and use trade as a motor of development in Uganda. On average farmers get 0,5 percent of the value for which processed coffee is sold abroad. Good African Coffee’s goal is to have a more equal distribution of trade revenues in order to truly benefit all parties. Therefore, Good African paid its farmers 25 per cent above that of the average market price in 2011. To enable this, Rugasira works at implementing the processing of the coffee in Uganda itself. Rugasira explains that bringing a larger part of the supply chain to Uganda can have very positive effects on the country. This is most apparent in the Rwenzori region where Good African Coffee has established partnerships with over 14 000 farmers. Farmers from this region have in the past been victims of unfair trade agreements, unable to secure long term deals with reliable buyers due to being framed as unskilled and unreliable producers. By contracting partnerships with them and offering a fair price, Good African Coffee contributed to enhancing the livelihoods and opportunities of the local population. Moreover, Rugasira has contributed to create farmer communities that support each other and share knowledge about producing sustainably.

In the book A Good African Story, Rugasira describes the various challenges entrepreneurs from the African continent face. For example, finding funds and investments has been proven complicated. The Ugandan government dedicates a mere 4% of all its bank credit to agriculture. Moreover, most commercial banks only invest in large corporate multinationals, international traders and NGOs, since these are considered to be of a lower risk. Rugasira experienced many other hurdles along the way when he initially attempted trade with the Global North. He, like many other businesses owners in Africa, faced the ever-existing barrier of prejudice. Rugasira addresses how business with Africa is still led by western models and stereotypes that complicate partnership. Yet, through much perseverance and proving these Western investors wrong, Good African Coffee has become a coffee bean one can find in local supermarkets across the world. Over the years, the company established itself abroad and sold coffee in the UK and the US, in addition to becoming the first African Coffee company to be listed on London’s stock exchange.

Unfortunately, Good African Coffee has recently been running into various problems with the Uganda Revenue Authority. Nevertheless, one can still argue this company has and is still having a significant positive impact on development in Uganda today. The successes go beyond the company or Rugasira alone, as it has set in motion championing trade as a means of poverty reduction and advocates distributional ethics. The company can be considered a tool to challenge the negativity of Africa as dependent on the West. Good African Coffee itself has of course also had a considerable impact on thousands of farmers as it has provided a base for these farmers to stand on. Moreover, the story encourages future generations to dream big and gives them the pride and inspiration these highly motivating entrepreneurial success stories convey. As Rugasira explains: “one’s journey can encourage, mentor and even caution others. … business experiences represent a form of intellectual capital. This capital can catalyse new and innovative ideas, and spur challenger brands and entrepreneurs.”

Authors: Daphne Galloux, Sabine Hillen and Kimberley Snijders

Sources and additional references

- A Good African Story - Andrew Rugasira (2013)

- https://www.theguardian.com/global-development/2013/feb/17/andrew-rugasira-interview-good-african-coffee