Supply of industrial sugar, a big problem in Tanzania

Industrialists operating in Tanzania have complained on the importation of industrial sugar in the country saying that it is full of bureaucracy. In view of this, have pleaded with the government to allow industrial sugar importation under the East African Community (EAC) duty remission scheme. Manufacturers of foods, beverages and related products are allowed to import industrial sugar from outside EAC region because none of the block’s six partners produce the raw material. Speaking at the 11th Tanzania National Business Council (TNBC) meeting at State House in Dar es Salaam on Monday this week, traders raised concern over the 15 per cent refundable import duty that Tanzania Revenue Authority (TRA) charges on industrial sugar. The agreed import duty on industrial sugar to all EAC countries is 10 per cent but Tanzania charges an additional refundable duty of 15 per cent, bringing the total duty to 25 per cent. Tanzania imposed the extra 15 per cent to curb misuse of industrial sugar by unscrupulous traders who repackage and resell the product for domestic consumption. Manufacturers described the additional charge as nuisance to investors, saying it takes long time to receive the refund. Nyanza Bottling Company Limited (NBCL) Managing Director Christopher Gachuma said the long outstanding refunds on additional 15 per cent import duty were threatening food and beverage industries. Confederation of Tanzania Industries (CTI) says TRA is yet to remit 35bn/- in additional import duties on industrial sugar to five major industries. CTI has been campaigning for the removal of additional duties on industrial sugar. The confederation insisted that the unprecedented delays in permit issuance had made it difficult for businesspeople to clear their consignments at the port, with further delays likely to result into compounded storage costs and demurrage charges which will adversely affect production. But, President John Magufuli challenged potential investors to instead invest in production of industrial sugar and get rid of imported products. He said the government recently suspended issuance of industrial sugar import permits pending thorough assessment to weed out deceitful traders who repackage and resell the raw material as domestic sugar. Dr Magufuli, addressing the TNBC meeting, said a team of government officials that conducted the thorough assessment of industries that had applied for the import permits, established that only eight industries needed the sweetener for industrial purposes. “These industries had their records straight and they ordered the sugar consignments as per their production operations unlike other factories that requested to import huge consignments against their demand,” he said. He said there were 22 industries that had sought import permits for consignments that were above their factories’ demand. In the assessment report that the team presented to the Head of State last Thursday, there was a ghost factory, Maisha Bottles and Beverages, which asked for the permit to import 7,000 tonnes of industrial sugar. “I thought we were only dealing with ghost workers but in a bizarre turn of events, it appears that we have even ghost factories,” he fumed. Dr Magufuli told over 200 businesspeople who convened at the Magogoni State House that it was high time the country’s business community constructed industrial sugar factories to create more jobs for Tanzanians. With almost 55 million people, Tanzania’s sugar demand per year is estimated at 590,000 tonnes, of which 135,000 tonnes are industrial. The country has a deficit of 125,000 and 135,000 tonnes of domestic and industrial sugar, respectively. The gap is always bridged through imports. “If we can have more industries producing sugar locally, there is no any need to have the Tanzania Sugar Board,’’ charged Dr Magufuli, inviting more investors to invest in the country, which he described as the best place for investment to thrive. He ordered TRA to charge reasonable taxes that do not frustrate traders, saying if there are laws impeding business in the country, they should be forwarded to parliament for amendment. President Magufuli asked government officials to avoid using their positions and discretionary powers to depress traders whom he described as the engine of economic growth, saying “My government loves businesspeople.” He hinted that there are investors from Germany and Denmark who have expressed interest to invest in the Petrochemical plant in Kilwa District, Lindi Region. The 1.92 billion US dollar (about 4tri/-) fertilizer industry is expected to generate 4,000 direct employments, according to Dr Magufuli. He promised the businesspeople that his government will work on all their grievances to create a friendly business environment in the country.