Coffee dealers cry foul over Rwf4.5bn in unpaid arrears
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Coffee dealers contracted to supply about 60 containers of unroasted coffee to a Canadian firm are demanding Rwf4.5 billion in unpaid arrears which they say is affecting their business, The New Times has learnt.
The suppliers have provided 1,152 tonnes of coffee to Happy Goat, a firm co-owned by two business partners – a Rwandan and a Canadian.
The company entered deals with 13 local coffee companies between August and December 2017.
The coffee is stored in a warehouse owned by the National Agriculture Exports Development Board (NAEB) before it is exported.
Speaking to The New Times last week the suppliers said they had run out of funds to carry on with their business as they need to be paid to save the situation.
One dealer said they acquired a loan to supply a container of coffee, worth about $99,000 (about Rwf83 million), having signed a contract with the firm in July 2017.
Under the agreement, the dealer said, the buyer was supposed to pay for supplies not later than a month after getting the coffee.
But about seven months have elapsed without receiving a coin, the business person said.
“We are worried that we will not be able to service the bank loan we took. The coffee harvest season is due soon but we will not afford to buy coffee from farmers because we do not have money. Our business is in limbo” the dealer said on condition of anonymity for fear of jeopardising the contract.
Another dealer told The New Times that he supplied one container to Happy Goat after signing an agreement in September 2017.
The coffee, he said, is still in NAEB warehouse but its quality could deteriorate as it is a commodity that should not be kept for a long time.
“Losses are bound to happen,” he said. “We do not have money to pay farmers for the upcoming harvest.”
Contacted for a comment, Janvier Nzabarinda, a co-owner of Happy Goat, admitted that payment for the supplies delayed after they failed to secure funds in time from a financial institution.
He said he signed the contracts with the suppliers after securing an export market for Rwandan coffee (including in America, Canada and Dubai) with demand of about 70 containers but he’s yet to supply.
But, he added, the firm will be in position to pay the traders within the next 10 days.
“We delayed to pay them but it was a result of delayed financing from financial institutions,” he said.
He said he committed to pay $5.2 per kilogramme of unroasted coffee, while foreign buyers pay $4.5 a kilogramme.
A kilogramme of roasted coffee, he said, is $25 in Canada.
However, he said, though he needs the traders’ coffee, they were free to sell it to other buyers who are able to pay upfront.
In the future, Nzabarinda said, he was considering paying suppliers before they supply the product.
The chief executive of National Exports Development Board (NAEB), Amb. George William Kayonga, told The New Times that several options were on the table to address the issue.
“We are trying to resolve the matter by looking around for buyers for their coffee,” he said, adding that they are also considering terminating the contract with Happy Goat. He said they were not contemplating legal action to avoid possible losses arising from longer storage periods.
Happy Goat has about six coffee shops in Ottawa, Canada, according to Nzabarinda.
Nzabarinda has a 50 per cent stake in the Canadian-based firm – which was established about seven years ago – with the other 50 per cent belonging to his Canadian business partner.