Sugar sector strategy is mixed grill, still needs to be clarified

27Oct 2022
Editor
DAR ES SALAAM
The Guardian
Sugar sector strategy is mixed grill, still needs to be clarified

SECTORAL authorities in the sugar wing of either the Ministry of Agriculture or Investments are saying that money spent on importing sugar can be used in expanding capacity and production in various industries. Few would dispute this affirmation, so long as one has somewhere to stand, that is-

when do imports stop and building capacity proceeds. It therefore couldn’t be that same money.

 

Within this ambit of assertion by executives of the Sugar Board of Tanzania it is possible to look at the board’s projections and expectations, as the key goal is to bring up production to 750,000 tonnes by 2025/26 through collaboration with the private sector. The position is that expansion of sugar factories would facilitate wider economic growth, with the government embarking on initiatives to enable expansion of industries. It is inviting more investors into the sector.

 

That target is way above the 440,000 current demand optimally, so the issue is how far there will be a regular market for this excess tonnage or why it is arguably vital to have it. In what manner is Tanzania positioned as a strategic sugar supplier, similar to Mauritius in the neighbourhood or far away, Cuba?  Such a figure needs to be the sum of what investors expect, not a state project.

 

One lingering issue in the export projection is whether investors are actually seeking to cover nearby export markets, or their strategic interest is the local market. The summary statement indicated that we could sell upwards of 300,000 tonnes of sugar to foreign markets if these strategies work out, but there are those who wish to sell their sugar to us, like Uganda. There was a time President Samia Suluhu Hassan was compelled to sharply qualify remarks by a cabinet minister, who said we don’t need Ugandan sugar as we can satisfy demand from the inside. Trade is tied not to shortages but helpful competition.

 

For a competitive image of things, a realistic surplus would have to be pegged at not more than 50,000 tonnes upon satisfaction of demand, in a competitive environment, but it was clear the board executive did not have competition in mind. The reason isn’t just that excessive export projection but also the self-sufficiency thrust of his remarks, which sort of reiterate the intent of non-tariff barriers on sugar produced elsewhere, by creating a dogma of protecting local sugar. That would free others from obligation to import our sugar unless they have severe shortages, and a working EAC can’t be hinged on competitive opportunities tied to drought or some other crisis. There is work to do there.

 

It isn’t just for harmony in the EAC zone in particular that a competitive sugar environment is vital, but also to protect internal consumers. Early in 2016 the argument about protecting local sugar producers became policy, and in the mayhem, sugar prices rose from 1,800/- country wide per kilo to anything from 3,200/- in Dar es Salaamto 5,500/- in Simiyu Region, on the basis of reports at that time. Granted, bureaucrats are forgetful, but let’s not go back there now.