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- Jul 30, 2008
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Kagera Sugar Limited managing director Seif Ali Seif (C) briefs Finance deputy minister Mwigulu Nchemba (L) close to a 'mountain' of bags of sugar stocked in a godown at Kagera Sugar Limited.
The government has declared that it will soon mount a sweeping crackdown aimed at ending the illegal importation of sugar into Tanzania, which some industry stakeholders say is creating chaos.
Mwigulu Nchemba, Deputy Minister for Finance (Policy), hinted on the move during his impromptu visit to Kagera Sugar Limited (KSL) at the weekend.
His remarks followed intensive briefing by KSL General Manager Ashwin Rana on the ‘dire straits' the company and other manufacturers of sugar based in the country are facing for lack of market chiefly owing to unfair competition from importers.
"The Tanzanian market is flooded with low-cost imported market sugar, including industrial sugar usually used in the production of soft drinks but openly now sold in retail shops for public consumption, which has resulted in sugar prices reaching the lowest levels recorded in the past five years," said Rana.
"At Kagera Sugar Limited we have now been forced to sell the sugar we produce at well below cost of production to meet urgent cash flow needs," he said, noting that they had no better option to cash in on.
The deputy minister, who had an eyewitness account of operations at the massive KSL agricultural complex, said he was impressed by the large-scale investment at the estate and the workers' commitment to excellence.
He hailed the company for what he called ‘creating an agricultural success story in our country', noting: "This is one of the best performing private facilities of its kind in Tanzania. There is no way the government can afford to helplessly stand by as such an asset falls apart just because there is unfair competition in the market."
"Engaging in illegal importation of sugar or any other commodity is a crime, and those behind such practice are criminals involved in economic sabotage," declared Nchemba, who was accompanied by Nkenge Member of Parliament (CCM) Assumpter Mshama.
He said the government was aware of the critical state the sugar industry in the country was in owing to uncontrolled importation of the item "and we will take stringent measures to address this situation".
The deputy minister witnessed mountains upon mountains of sugar stocked in the company's godowns, having built up since the start of the season.
"Let me make it clear, the crackdown on these culprits will run non-stop and all those responsible for facilitating the illegal importation, distribution and sale of sugar will be held accountable," he warned, noting that the government can not allow itself to be held to ransom by criminal elements.
Nchemba said the Tanzania Revenue Authority would soon be instructed to swing into action and stop all illegal imports of sugar.
"If the instructions are not heeded as swiftly and intensively as expected, the government will intervene by ensuring that both traders and buyers associated with sugar illegally imported into our country are thoroughly investigated and required to provide documentary proof of any sugar found in their possession," he noted.
Impeccable sources intimated to The Guardian that huge consignments of illegally imported sugar enter Tanzania through Bagamoyo and Dar es Salaam port, adding that there was also the possibility of more such sugar filtering in through other entry points.
In his remarks, KSL Managing Director Seif Ali Seif said "all we were demanding is a level playing field promising all of us a fair deal, meaning fair competition and fair business and taking measures to ensure that no one imports sugar without paying the requisite tax".
"Our commitment at KSL is to make our country self-sufficient, but this goal cannot be realised while other people are frustrating those making efforts towards that objective. We strongly urge the government to address this issue very seriously and urgently," he said.
Seif told the deputy minister that the flooding of the market with illegal imports of sugar have created an environment that has left local sugar producers facing serious problems in meeting their commitments to financial institutions, suppliers and outgrowers.
"This situation has seriously compromised the viability and sustainability of our business. We would really appreciate seeing the government chip in with a permanent way out so that local industries do not die off," he said, adding: "This would tie in excellently with the government's vision on agriculture, whose thrust is on further modernising agriculture and reviving local industries so as to create more employment opportunities for our people."
Nchemba later hailed the KSL management for the company's huge investments in agriculture, including supporting sugar outgrowers in Kagera Region and community projects in the company's neighbourhood as an integral part of its corporate social responsibility strategy. The latter has resulted in over 6,000 families earning a decent living.
The deputy minister said the seriousness and devotion with which KSL had invested in corporate social responsibility projects and services were "far in excess of anything I have ever witnessed elsewhere in the country".
He explained that he was also pleased with the KSL management's emphasis on in-house and other forms of training for workers, saying: "With the training programme, you create badly needed professional skills within the agriculture sector in the country – and this guarantees a prosperous future for your operations."
Nchemba was particularly impressed by the large number of young graduates of the Morogoro-based Sokoine University of Agriculture as well as the University of Dar es Salaam who have taken up management positions at the company.
He was also moved by the high quality of services at the company's medical facilities that also serve residents of communities bordering KSL.
http://www.ippmedia.com/frontend/?l=73777
SOURCE: THE GUARDIAN
