CTI: Adopt bulk procurement system

Confederation of Tanzania Industries (CTI) chairman Samuel Nyantahe speaks at a recent event. With him is CTI executive director Leodegar Tenga. PHOTO|FILE

What you need to know:

  • CTI chairman Samuel Nyantahe said that, in this regard, warehouses should be built from which dealers would procure sugar based on consumer demand.

Dar es Salaam. The Confederation of Tanzania Industries (CTI) has urged the government to adopt the bulk procurement system (BPS) for industrial sugar.

CTI chairman Samuel Nyantahe said that, in this regard, warehouses should be built from which dealers would procure sugar based on consumer demand.

This would go a long way in addressing the challenges of sugar shortage countrywide, which are largely attributed to delays in importing the sugar occasioned by such factors as the granting of import permits and port clearance bottlenecks.

The government says that delays in clearing imported industrial sugar out of Customs control at Dar es Salaam port is generally caused by verification that is partly aimed at ensuring that the commodity is not diverted into household use.

President John Magufuli was recently quoted as saying that only eight out of 30 major importers of industrial sugar were found to be honest. This is according to a report he received from a team that was mandated with the imports verification exercise.

They include SBC Tanzania, Nyanza Bottling, Bonite Bottlers, Bakhresa Group and Candy Tanzania – to name only a few.

The other 22 importers cheated the government, often bringing in quantities of industrial sugar that were way beyond their needs, the president said.

“If all importers of industrial sugar were clean, there would be no need to have the Tanzania Sugar Board (TSB) – and, thus, there would not be delays in issuing import permits,” he reasoned.

In the event, Dr Nyantahe was optimistic that adopting the bulk procurement system would enhance compliance and transparency in the sugar sub-sector.

“This would provide significant benefits to the country, including lowered costs in the sugar business and improved tax administration,” the CTI chairman said – adding that “this would also ease congestion at Dar es Salaam port.”

Noting that thousands of tonnes of imported industrial sugar have been held up at Dar es Salaam port for about four months now, Dr Nyantahe said “the country (Tanzania) has a good chance of saving money which is otherwise spent on such things as demurrage charges arising from import consignments staying for far too long at the port.”

Also, delays in clearance of consignments out of Customs control at the port invariably cause periodic shortages of the industrial input – leading to all sorts of woes for manufacturers, dealers and end consumers alike.

“The shortages force some of them to stop production altogether – thus putting hundreds of jobs at risk – and can also adversely affect possible expansion plans,” the CTI chairman said.

As a matter of fact, the Iringa Food and Logistics Company and the Dar es Salaam-based Shellys Pharmaceuticals recently suspended production for lack of industrial sugar.

In the event, more than 190 employees are in danger of losing their jobs, according to senior executives of the two firms.

But, with the success that the bulk procurement system (BPS) has demonstrated regarding importation of petroleum products, Dr Nyantahe is confident that the same system would work just as well for industrial sugar imports.

Tanzania introduced the BPS for petroleum products in January 2012, establishing a database on consumption trends. This was in a bid to get the best prices on the world market – and guarantee high quality of the imported products.