Overwhelming support for decision to curb sugar price spikes

Sugar pic

What you need to know:

  • Lawmakers on Monday overwhelmingly supported the government’s proposal to give the National Food Reserve Agency (NFRA) the authority to buy and store sugar to end recurrent price spikes

Dar es Salaam. MPs on Monday overwhelmingly supported the government’s proposal to give the National Food Reserve Agency (NFRA) the authority to buy and store sugar to end recurrent price spikes.

Agriculture minister Hussein Bashe tabled the proposal last month when he presented his docket’s Sh1.249 trillion budget for 2024/25 in Parliament.

Since it required amendment of the law governing NFRA, the proposal is contained in the Finance Bill, 2024, which MPs debated on Monday.

The government’s desire to mandate NFRA to buy and store sugar follows sharp price increases whenever local manufacturers conduct routine maintenance of their factories, mostly during the rainy season when sugar cane loses its usual sucrose levels.

However, the situation got out of hand early this year when an acute sugar shortage sent prices galloping to as high as Sh10,000 per kilogramme in some regions from between Sh2,600 and Sh3,000.

Debating the Finance Bill, 2024 in the House in Dodoma on Monday, lawmakers overwhelmingly endorsed the government’s decision, saying it is the right move and dismissed suggestions that it would adversely affect domestic sugar producers.

Ms Mariam Ditopile (Special Seats-CCM) recalled that the holy month of Ramadhan was approaching when sugar prices went through the roof earlier in the year, adding that accusing fingers were unfairly pointed at the government.

“People in Kondoa are happy with the decision to allow NFRA to store sugar that will be used as a cushion during times of scarcity. Those claiming that the government is out to kill the local sugar industry are not being sincere,” she said during a session chaired by Deputy Speaker Mussa Azzan Zungu.

Ms Ditopile added that the domestic sugar industry has been the beneficiary of the government’s goodwill and unwavering support in the recent past and that is why local producers are the sole importers of the commodity.

“They are saying the government wants to kill the industry, but at the same time they forget that shortly after coming into office, Her Excellency President Samia Suluhu Hassan visited a sugar factory in Kagera Region. Could this have been done by someone who wants to kill the sugar industry?” the legislator wondered.

Ms Ditopile said the government is only seeking to ensure that manufacturers do not overstep their mandate.

“When we gave them the mandate to import sugar, we did so to protect the consumer, but they have failed,” she added.

Mr Venant Protas (Igalula-CCM) said a good leader is one who decides on the right direction to take whenever a challenge emerges.

“That is why I commend Her Excellency President Samia Suluhu Hassan for taking action to avert sugar crises in Tanzania,” he said.

Mr Protas added that on issues of national interest, especially the protection of consumers, it was only sensible that MPs take a common stand.

He cited as an example the government’s June 2022 decision to subsidise prices of petroleum products, saying nobody remembered that Tanzania did not have direct control of global oil prices.

“We all decided to unfairly condemn the government. We did that even as we were quite aware that our country is not a producer of petroleum products. The government, however, responded by subsidising petroleum products and prices went down.”

Mr Protas urged MPs not to take the sugar issue lightly, saying recurrent price spikes began when the government decided to leave it to market forces to determine prices.

“We, as the people’s representatives, need to firmly support this proposed law, which seeks to make it possible for  the government power to understand exactly what goes on in the sugar industry.”

Mr Protas added that MPs could also look at several issues, including the timely issuance of import permits.

“NFRA should also be given the mandate to import sugar to cover deficits, but should do so in a manner that will not have an adverse impact local manufacturers,” he said.

He recalled that at one time a kilogramme sugar in Ugalula was being sold for up to Sh11,000 and it is disheartening to note that there are some dissenting voices as government tries to find a lasting solution to the long-standing problem.

“We must stand together when it comes to safeguarding and fighting for the interests of the people. Let’s keep  politics out of this,” Mr Protas said.

He added that are several sectors the government needs to invest in for the general good of consumers.

“We are talking of areas like cooking oil, electricity and telecommunications. For instance, if we leave electricity generation and distribution to the private sector, who shall we ask if the whole country descends into darkness? That is also precisely why we decided that the national fibre backbone must be owned by the government.”

Mr Miraji Mtaturu (Singida East-CCM) said economic growth shows that the government has put emphasis on the productive sectors, including tourism.

According to the state of the national economy presented in Parliament on June 13 by the Minister of State in the President’s Office (Planning and Investment), Prof Kitila Mkumbo, Tanzania’s gross domestic product (GDP) grew by Sh7.1 trillion to reach Sh148.3 trillion in 2023, representing a 5.1 percent increase compared to Sh141.2 trillion in 2022.

Mr Mtaturu added that it is against this backdrop that the government must ensure that it intervenes in the distribution of sugar.

“This is a sensitive area that cannot be entirely left to the private sector. This is why we must support the idea of mandating NFRA with the task of importing gap sugar. We should not allow people to turn sugar into political capital,” he said.

Mr Hamisi Kigwangalla (Nzega Rural-CCM) said before he went into politics he used to be a commodity trader.

At one point during his early days as an MP, he moved a private motion in Parliament that sought to pave the way for the establishment of a price stabilisation fund.

The aim, Mr Kigwangalla said, was to protect consumers of various commodities and farmers against unforeseen price fluctuations.

“This is what the Agriculture ministry wants to do (with envisaged changes to the NFRA Act as proposed in the Finance Bill, 2024). The government wants NFRA to buy sugar and keep it until at such a point whereby a shortage of the product in the market is likely to  fuel price hikes,” he said.

Mr Kigwangalla added that one cannot expect such an idea to be welcomed by people who benefit from recurrent sugar shortages in Tanzania.

“Mostly likely, it is their fear that the decision will affect their profiteering that is fuelling the opposition the government is currently facing,” he said, adding that such proposals tend to worry large-scale businesses that benefit from existing gaps.

“If you have your business and you are operating transparently, how would you be affected by a simple decision that compels the government to import and keep sugar until consumers have consumed all that you have manufactured?” Dr Kigwangalla asked.

He said those opposing the proposal on assumptions that if endorsed, it will affect local industries, have not done their homework properly.

Mr Khalifa Mohammed Issa (Mtambwe-ACT) said the government has taken the right decision to ensure that it intervenes in the sugar industry.

If nothing was done to bring sugar prices to reasonable levels, he said, it would paint a bad picture of President Hassan’s administration, which has done commendably well in the execution of mega projects.

“My party, ACT-Wazalendo, has a slogan that says ‘A Nation for All People, In the Interests of All’. As such, we cannot have only seven people eating the fruits of a country that has a population of over 60 million. It is just impossible…We cannot protect the interests of seven people at the expense of over 60 million,” he said.