Speed up privatisation of State sugar millersMonday February 06 2023
The government has taken a sensible decision to lock local sugar millers out of the duty-free imports scheme.
The Sugar Directorate’s fears that allowing millers to bring in the cheaper sweetener from outside the Common Market for Eastern and Southern Africa (Comesa) would encourage them to abandon buying and processing sugarcane from local farmers are not unfounded.
Their preference for repackaging and selling imported sugar when a similar window was opened in 2017 subjected farmers to huge losses, with tonnes of the crop left to rot on farms.
If they did it then, they could do it within the current window that opened last December as well.
The government expects the 100,000 tonnes of sugar set to be shipped in to help ease shortages and stabilise prices amid an annual production deficit of 200,000 tonnes.
Unfortunately, importing the commodity duty-free often distracts authorities from tackling the root causes of the country’s perennial sugar crises, including production inefficiencies due to rickety machinery and poor management at State-owned millers and low-quality cane grown and supplied by farmers.
In the past, suspicions have also been raised about the influence of cartels believed to benefit from the status quo in the sugar sector.
Government plans to privatise or lease out the State-owned millers and have them better financed and managed have stalled for years.
The new administration has, fortunately, included some of the millers in its privatisation plans. But it will need a better strategy to avoid the pitfalls that made past efforts stall.