12 November 2012

Tanzania: Illegal Importation of Sugar Must be Checked


LAST week, the government allowed two sugar producers, Kilombero Sugar Company (Illovo) and Kagera Sugar Company, to export about 19,500 tonnes as an urgent measure to offset excessive supply in the local market.

This follows complaints by the local sugar producers that the government's decision last year to issue permits to private companies to import the commodity has impacted negatively on their business. Records show that Kilombero Sugar alone has an excess of 50,000 tonnes of sugar piling up in its warehouses.

Currently, sugar consumption stands at 480,000 tonnes per annum, but the four factories, namely the Tanganyika Plantation Company (TPC), Kilombero, Kagera and Mtibwa produce only 320,000 tonnes. This indicates that the deficit of 160,000 tonnes of sugar has to be filled by importation; the fact the local producers don't contest.

What disturbs the local producers is a dirty game by some selfish traders who have been misusing the offer to illegally import sugar beyond the capacity as stipulated in their permits. The fact still remains that the local producers have invested their time and money to ensure the sugar sector performs well and contribute on the national economy. This will also guarantee a quick return on their investments (ROI) if all stakeholders play by the same rules.

So it goes without saying that the government must put all measures to ensure that local producers, not only in the sugar industry, are protected lest the struggling economy continues to suffer.It has to be clearly known to everyone that haphazard importation of sugar, which attracts less tax, will kill the sector and ultimately see thousands of workers and sugarcane outgrowers suffering.

This also calls for the government to work out a viable plan with the local producers to see how the price of sugar, which is currently selling at around 2,000/- could go down and become affordable to majority of Tanzanians. Some of the areas where the government must look into include tax regime on fertilisers and machinery.

In so doing, investments into the sugar industry will increase and finally save millions in foreign currency. Tanzania stands to benefit a lot by using its strategic geographical position to become a net exporter of sugar if new investments are created and incentives offered.

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