Panic buying as nation faces sugar shortage

10May 2016
Edward Qorro
The Guardian
Panic buying as nation faces sugar shortage
  • President Magufuli has now offered tax waivers for cash-rich pensions fund organizations interested in importing sugar in bulk in a bid to avert a looming crisis

TANZANIANS have resorted to 'panic buying' of sugar as a perceived acute shortage of the commodity has sent retail prices sky-rocketing and the government scrambling to avert a looming national crisis.

Bulk of sugar in one of the wholesaler's warehouse in Dodoma.

TANZANIANS have resorted to 'panic buying' of sugar as a perceived acute shortage of the commodity has sent retail prices sky-rocketing and the government scrambling to avert a looming national crisis.

A survey by The Guardian has revealed that most major shops and supermarkets in Dar es Salaam and elsewhere across the country have had their shelves literally stripped of sugar as desperate customers continue to stock up on the popular sweetener.

This came against the backdrop of an offer by President John Magufuli yesterday to extend tax exemptions to state-run pensions fund organizations so they can import sugar in bulk and end the current shortage of the commodity.

As a result of the surge in demand for sugar, retail prices have doubled to around 3,800/- per kilogram in Dar es Salaam, compared to the recommended government price of 1,800/- per kilo.

As authorities engage themselves in a countrywide crackdown on traders who hide sugar in warehouses, the nation is now facing a shortage of the product that is likely to affect various people lives.

Our survey yesterday found no sugar in many of the major Dar es Salaam shops that usually supply the commodity in large quantities to the whole city.

At the popular Mlimani City shopping mall, workers at the two main retail supermarket chains Nakumatt and Game were observed informing queues of disappointed customers that there has been no sugar for a whole week.

The (large) number of people you are witnessing here is the same as we have been receiving for the whole week - and they are all asking for sugar.

We keep having to turn them away because we don’t have any sugar for now,” a Game security officer told The Guardian.

According to the security officer, a one-ton sugar consignment that the supermarket received from Kilombero last week failed to last a day as clamouring customers bought in large quantities.

At the Mwenge market in the city, vendors complained that the sugar scarcity is seriously hurting their businesses as regular customers are no longer coming.

They expressed fears that the trend may continue even after the crisis is over. We are no longer doing any business and we know how long this will take, but our plea to the government is to intervene into this crisis before things get worse, said Abdul Hassan, a sugar vendor at the Mwenge market.

At Imalaseko supermarket in the city centre, a clerk said all the sugar they had in stock had been sold out over the past three days as the demand was just too high.

At the TSN supermarket, The Guardian was told that all their sugar was snapped up some two weeks ago and since then, they have been ordering for more consignments from the Kilombero Sugar Company - but to no avail.

According to Dr. Ellinami Minja, an economics lecturer at the University of Dar es Salaam, there is more than meets the eye to the matter, and the government must ensure that the all the remaining sugar in reserve is poured into the market.

Minja noted that the government, when announcing a ban on sugar imports in February, must have been sure of having enough in reserve that was available; a position that can have just changed in the blink of an eye.

Pointing out that it is possible many Tanzanians are now buying the commodity in large quantities due to fears of a huge crisis coming, he called on the government to work on ending this fear among the people and clearly tell the public that this is a small issue that can be handled very easily.

Another economic researcher also from the University of Dar es Salaam.Dr Semboja Haji, criticized the government initial decision to ban importation of sugar from other countries, saying Tanzania is a signatory of various inter-trade protocols which calls for freedom in doing business with other countries.

Semboja said there is need to establish an independent body to regulate the whole sugar business. This is very different from other businesses that people do, and whenever there is interference in its handling, it automatically shakes up as has happened now, he told journalists during a ceremony to announce the National Consumer Price Index (NCPI) by the National Bureau of Statistics in the city yesterday.

In another development, the parliamentary opposition camp yesterday also blamed President Magufuli’s ban on sugar imports, describing it as the source of the current crisis and a move that could end up frustrating the local business environment.

Addressing a press conference in Dodoma, the shadow minister for industry, trade and investment, Anthony Komu, said the sugar import ban and the recent arrest of businessmen suspected of hoarding sugar were not valid moves under a free market economy.

Why should the ban target only sugar and not other products such as cement and steel, which are also imported, said Komu, insisting that the ban was influenced by one former political leader seeking to protect his sugar plantations in Kilombero.

According to Komu, local producers alone don’t have the capacity to meet the country’s sugar demand.

He dismissed any notion that the opposition camp may have links with the business people, insisting that its concern is based solely on the future of the economy and the fact that Tanzania is supposed to be a free market economy.

In a new twist, President Magufuli said yesterday his government was ready to offer tax waivers to cash-rich pensions fund organizations to start importing sugar in bulk.

He said the government was ready to introduce tax holidays for pensions funds interested in addressing the issue of sugar shortages which has now hit the country.

If hotels enjoy some of the exemptions, why shouldn’t I give the same to you, but on condition that you concentrate on reviving local industries and sugar importation, Magufuli said.

He assured social security schemes that the government was also ready to issue licenses to pensions funds willing to import the commodity which has lately become scarce in the country.

Last week, the government conducted a crackdown and arrested individuals believed to be hoarding the sweetener.

President Magufuli in February announced a ban on sugar imports by private companies to protect local industries, but critics say the move has now led to a country-wide scarcity of the commodity and escalating retail prices at the expense of poor Tanzanians.

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