TANZANIA'S SUGAR row, which cost a minister his job and a mini-cabinet reshuffle, has resurfaced with the Tanzania Chamber of Commerce, Industry and Trade (TCCIA) and the Confederation of Tanzania Industries (CTI), claiming the recent government importation of industrial sugar was discriminatory and creating monopolies. 

What angers the business community most is the temporary arrangement that permits only sugar producers to import industrial sugar on behalf of industrial users or other industrial sugar importers. The Chamber and CTI insist sugar producers should stick to production and any deficit should be filled by the importers and traders. 

The Second Vice-Chairman of the CTI, Mr Leon Hooper, said last week that the Confederation was dismayed by the way decisions were made on importation of sugar that left out crucial stakeholders - the importers and traders. Mr Hooper said that the importation of sugar has in the past "provided extensive loopholes for tax evasion."

However, the Secretary General of the Sugar Producers Association (SPA), Mr Reuben Naburi, declined to comment on the saying the association's president, who is the chief executive officer of Mtibwa Sugar Company in Morogoro region, was on his way to Dar es Salam.

"Anything about the issue would come out after consultations with the president," he said. 

Eleven companies have complained to CTI for being denied the right to import their own industrial sugar as a raw material. Instead, they have been forced to buy from local sugar producers who are allowed to import. Companies that have complained of discrimination issue include Wonder Foods (Tanzania) Ltd, Mary Biscuits Industries, A-One Products Bottlers, Chemi & Chotex Industries, Furaha Nyanza, Regent Food Products and 2000 Industries. Others are Tabisco Industries, Jumbo Confectionery and Haz Industries.

"This state of affairs has resulted in loss of revenue and less contribution to the economy, loss of employment, loss of new investors and increased imports particularly from Kenya," said Mr Hooper. 

He said CTI had resolved to persuade the government to allow manufacturers to import their own sugar at the concessionary rates from a source of their choice. 

The TCCIA President, Mr Elvis Musiba, told The EastAfrican in Dar that he was the Chamber was displeased with the government move move saying it was counterproductive. 

"How can a local sugar producer assume the roles of importer, distributor and regulator while denying smaller manufacturers the right to import industrial sugar as a raw material," asked Mr Musiba adding that the government was sneaking back monopolies through the back door.

Prior to the 2001/2002 budget, all users of industrial sugar were allowed to import refined sugar at the concessionary import duty rate of 10 per cent. A specific Suspended Duty rate of Tsh162 per kg was imposed in the Finance Act, 2002.

Subsequently, Government Notice 203 of 31 August 2001 granted full remission of the Suspended Duty for producers of soft drinks and beer. 

But for some reasons all other industrial users of industrial sugar, totalling over 20 companies were not covered by the tariff remission under Government Notice (GN) 203. They have been forced to buy the product locally at high prices, that industrialists claim has negative implications. 

In August last year, president Benjamin Mkapa appointed five prominent persons to investigate the then Minister for Industry and Trade, Mr Iddi Simba over the 'Sugargate' scandal that blew up in the parliament over issuance of sugar imports to certain businessmen. Mr Simba was later forced to resigned from his ministerial post. 

The team headed by High Court Judge Bernard Luanda investigated the procedure Minister Simba used to find out if they devoid of corruption that was highly suspected in the sugargate. 

The probe team was also charged with establishing whether the procedure used prevented other businessmen from importing sugar and whether there were any negative revenue effects from the sugar importation procedure. 

• Additional reporting by Faustine Rwambali.