Tanzania modifies its sugar rules to control pricing and shortages
Tanzania has set limits on sugar production, importation, and distribution inside its boundaries with the aim of stabilizing the sugar supply and controlling prices.
The National Food Reserve Agency (NFRA) now has the only authority to import, store, and distribute sugar for domestic use thanks to a bill that Parliament passed that amended the Sugar Industry Act.
According to Finance Minister Mwigulu Nchemba, the recently modified Sugar Act would aid in preventing arbitrary shortages, product hoarding, and price inflation.
This modification will track the stabilization of prices. Mr. Nchemba stated that when there are market failures, the government must step in.
The Sugar Board of Tanzania (SBT) is able to provide import licenses at its discretion thanks to the recently modified Sugar Act. Until SBT is satisfied that local production is below the acceptable level, permits will not be issued.
At the start of each production season, the new amendments mandate that local sugar producers register their production costs and provide any pertinent information that may be requested by the SBT.
The names of the distributors in each region must also be declared by local producers and published in a Tanzanian publication that is widely read at the start of each production season.
The Act now requires the SBT to register sugar producers, operators of small-scale sugar plants, and industrial users as well as to provide provisional licenses.
The Tanzania Sugar Producers Association (TSPA) stated in a statement on Monday that in order to meet local demand, production is anticipated to increase to 663,000 tonnes by 2026.
There are severe shortages of sugar, according to TSPA Chairman Ami Mpungwe, whose organization saw a drop in production from 144,000 tonnes in 2017 to 30,000 tonnes in 2023.
According to Mr. Mpungwe, permission to import sugar was granted to seven sugar companies in 2023 in order to bridge the supply shortfall and encourage a drop in retail prices.
To make up the difference, the government has been spending over $150 million importing sugar from other nations.
Retail prices per kilogram at stores all around the nation have increased due to shortages, from Tsh2,800 ($1.05) to Tsh4,000 ($1.5) per kilogram.
Director of Advocacy and Reforms Fulgence Massawe of the Legal and Human Rights Centre (LHRC) requested that the government bring in more competitive sugar producers to boost sugar production.
He stated that improved property acquisition and ownership policies, investor-friendly immigration laws, and the rapid and friendly issuance of business permits to foreign investors within a day are all things that the government should work toward.
The balance of commerce and the usage of foreign exchange are significantly impacted by permitting the importation of sugar. Mr. Massawe stated that the government ought to encourage both domestic production and investment in the sugar industry.
