The Tanzanian government has launched a nationwide crackdown on cartels that it says are hoarding sugar to cause artificial shortages.

The police jointly with the Prevention and Combating of Corruption Bureau (PCCB) and other government authorities have seized over 11,298 tonnes of sugar stored in various godowns across the country.

Authorities found two consignment of 648.9 tonnes and 6,000 tonnes of sugar in Dar es Salaam, while 622.4 tonnes were found in Morogoro. In Mwanza, 26.5 tonnes were impounded while another consignment of 4,000 tonnes was found in a godown in Arusha.

Dar es Salaam Regional Commissioner Paul Makonda last week ordered security, tax and other authorities to investigate the source of about 6,000 tonnes of sugar found in two inland container terminals in Vingunguti industrial area in the city.

The consignment, comprising industrial and domestic sugar, was found at two different depots owned by Mohammed Enterprises, a leading soft drink processing company in Tanzania.

However, the crackdown has been criticised by industry players, who said it was against the principle of a free market economy.

Shadow minister for industry and trade Anthony Komu told The EastAfrican that the ongoing exercise to confiscate stocks of sugar will kill businesses, frustrate investors and spoil investment environment in Tanzania.

“President Magufuli’s order to search for stocks of sugar will have a negative impact on the sugar industry in Tanzania, while frustrating producers and importers of the commodity,” Mr Komu said.

The sugar dealers resorted to hoarding of the commodities after President John Magufuli banned importation of sugar.

READ: President Magufuli orders control of sugar import

Former chairman of the Civic United Front Prof Ibrahim Lipumba said the president had applied unconstitutional powers to ban importation of sugar.

“The government has no powers to set a price for consumer commodities in a free market economy other than setting taxes to catalyse competition between importers and producers of those products,” said Prof Lipumba.

READ: Tanzanian MPs petition president over sugar ban

The Confederation of Tanzania Industries (CTI) chairman Dr Samuel Nyantare told The EastAfrican that the association advocates for fair business practices through legal importation of sugar.

“We support the government initiatives on protection of local industries through the control of illegal imports. We want our members and other importers to observe import regulations,” said Dr Nyantare.

He said CTI expects more investors will take advantage to invest in Tanzania due to the good industrialisation policies, which the current government had put in place.

The government had set the price of sugar at Tsh1,800 (US90 cents) per kilogramme against the existing price of Tsh2,000 ($1) per kilo.

Senior economist at the University of Dar es Salaam Prof Haji Semboja told the government to engage the business community on how to bring down sugar prices instead of resorting to unfair business practices.

The government recently issued permits to import 70,000 tonnes of sugar to plug the deficit of 100,000 tonnes needed for domestic and industrial consumption.

Minister for Industry and Trade Charles Mwijage said the government had set aside some 294,000 hectares of land to be allocated to companies looking to develop sugarcane plantations in bid to boost sugar production and meet growing demand.

Minister for Agriculture Mwigulu Njemba said the actual demand for sugar in Tanzania stands at 420,000 tonnes per year.  The local production of the commodity reached 304,007 tonnes in 2015 up from 294,300 tonnes a year before.

In 1974, the government established the Sugar Development Corporation to handle sugar distribution, exportation and importation.

In 1992, the sugar industry was liberalised, which paved the way for privatisation of sugar companies starting, among them Kilombero. Mtibwa, TPC and Kagera.

Four sugar factories, Kilombero Sugar Company Ltd, Mtibwa Sugar Estates Ltd, Kagera Sugar Ltd, and TPC Ltd are producing an average production of 300,000 tonnes of sugar annually.

There has been a growing demand for sugar for both domestic and industrial consumption in past years, the situation which attracted importers to order the commodity from Brazil, India, Thailand, Malaysia and Mozambique.