Tanzania seeking to plug edible oil shortage

Tuesday February 19 2019

Cooking oil

Cooking oil displayed on shelves at a supermarket. Tanzania’s annual demand for edible oil stands at 500,000 tonnes, whereas the country can supply only 180,000 tonnes, forcing it to import 320,000 tonnes annually. FILE PHOTO | NMG 

By NJIRAINI MUCHIRA
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Tanzania is seeking investors in the edible oil sector to tame its huge import bill, which stands at $294 million.

The nation is facing a large deficit in production of edible oil, forcing it to depend on imports to meet growing demand.

While the government has imposed duties on imports, including from East African Community member states, Tanzania has failed to attract investors, resulting in frequent shortages of cooking oil and skyrocketing retail prices.

The Tanzania Investment Centre (TIC) is now seeking investments in edible oil processing to help bridge a supply gap of 320,000 tonnes.

According to the TIC, Tanzania’s annual demand for edible oil stands at 500,000 tonnes, whereas the country can supply only 180,000 tonnes, forcing it to import 320,000 tonnes annually.

With demand forecast to increase from 500,000 to 700,000 tonnes by 2030, Tanzania guarantees a growing market for investors for the foreseeable future.

Protracted standoff

The major sources of edible oil in Tanzania are sunflower, palm, groundnuts, sesame, soya beans and cotton. Oilseeds are produced in almost all regions in Tanzania.

Tanzania is Africa’s second biggest sunflower seeds producer, accounting for 35 per cent of the continent’s output after South Africa which accounts for 46 per cent.

Tanzania is seeking investors at a time when a protracted standoff with other EAC members, particularly Kenya, over its duty imposition on regional imports remains unresolved.

The country has imposed a 35 per cent import duty on semi-refined and double refined edible oil and a 25 per cent import duty on crude palm oil and another 25 per cent on other forms of crude edible oils.

Kenya contends that these duties are against the EAC Common Market protocol that provides for free movement of goods in the region.

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