Tanzania amends sugar laws to tame shortages, prices

Sunday July 07 2024

A man walks past bags of sugar at a storage facility in Dar es Salaam, Tanzania. PHOTO | POOL


Targeting to stabilise sugar supply and control prices, Tanzania has imposed regulations on sugar production, importation and distribution within its borders.

Parliament has passed a bill containing amendments to the Sugar Industry Act that gave the National Food Reserve Agency (NFRA) exclusive mandate to import, store and distribute sugar for domestic consumption.

Finance Minister Mwigulu Nchemba said that the newly amended Sugar Act would help to control arbitrary shortages, hoarding of the commodity and inflating of prices.

“This amendment will monitor price stabilisation. It is the government's responsibility to intervene during market failures,” Mr Nchemba said.

The newly amended Sugar Act gives the Sugar Board of Tanzania (SBT) discretion in issuing import licences. SBT will not issue licences unless it is satisfied that the local production is below the required level.

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The new amendments require local sugar producers to declare their production costs then submit any relevant information that may be required by the SBT at the beginning of every production season.

Domestic manufacturers are also required to declare and publish in a widely circulated Tanzanian newspaper the names of their distributors in every region at the beginning of every production season.

The Act now directs issuance of provisional licences and registration of sugar manufacturers, small-scale sugar plant operators and industrial consumers through the SBT.

Tanzania Sugar Producers Association (TSPA) said in a statement on Monday that it is expected to raise production to 663,000 tonnes by 2026 to cater to the local demand.

TSPA Chairman Ami Mpungwe said that sugar production had decreased from 144,000 tonnes in 2017 to 30,000 in 2023, causing acute shortages of the commodity.

Mr Mpungwe said that seven sugar factories were issued with permits to import sugar in 2023 to fill the supply gap and push reduction of retail prices.

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The government has been spending about $150 million to import sugar from other countries to fill the deficit.

Shortages have pushed retail prices from Tsh2,800 ($1.05) to Tsh4,000 ($1.5) per kilo at in shops across the country.

Legal and Human Rights Centre (LHRC) director for Advocacy and Reforms Fulgence Massawe asked the government to attract more competitive sugar producers to increase production of sugar.

He said that the government should come up with better policies for land acquisition and ownership, friendly immigration laws for investors with friendly and prompt registration and provision of business permits within a day for foreign investors.

“Allowing the importation of sugar has significant impact on the balance of trade and use of forex. The government should promote domestic production and investment in sugar production,”, Mr Massawe said.