Amid the raging government-Illovo Sugar Limited sugar price battle, Center for Democracy and Economic Development Initiatives-CDEDI believes the prevailing mess and monopoly in the sugar industry can only get sanitized if parliament tables and passes the Sugar Industry Bill of 2021 which it argues keeps gathering dust at Capital Hill in Lilongwe.
CDEDI Executive Director, Sylvester Namiwa maintained during a media briefing in Blantyre on Friday that the Parliamentary Committee on Trade and Industry should still conduct a public inquiry on sugar production and pricing in the country.
Namiwa added it is currently lobbying individuals, Members of Parliament and relevant parliamentary committees to ensure the shelved bill is prioritized and transacted during the next sitting of parliament.
“The industry is being governed by the Control of Goods Act of 2018 that replaced the 1950 Act. The monopoly in the industry has come about because the current law does not effectively regulate the growing of sugarcane, sugar production and imports and exports,” said Namiwa.
Drafted in 2015, the bill looks into regulating the industry by looking at both interests of growers and the sugar manufacturing companies. Around 2021, Sugarcane Growers Association of Malawi also decried lack of sanity in the industry due to delays in enacting the bill.
The CDEDI sentiments come after Trade and Industry Minister, Simplex Chithyola Banda claimed that Illovo had committed to reduce the industrial sugar price within a week; something the company denied just minutes later.
“Our understanding of the discussions was that the ministry requested Illovo to consider revisiting the price of industrial sugar as a condition for the ministry to consider cancelling the licences for the importation of sugar,” said the company’s Communications and Stakeholder Relations Manager, Olive Kawerama.
But the ministry has threatened to issue more import licences to other players in the sugar sector if Illovo does not reduce the price. It argues this is in a bid to help cushion the price of commodities that use sugar as raw material.
Illovo is not happy that government issued two sugar import licenses to Mugisha Investments to bring in 20 000 metric tonnes (MT) of brown sugar. It says this will affect local manufacturers.
Meanwhile, CDEDI has vowed not to rest until the sugar prices come down; alleging some politicians benefit from the Illovo monopoly of the sugar industry.
“Now, we hear of transfer pricing allegations where Illovo reportedly exports sugar to sister companies in Zambia and Mozambique at USD500 per ton, while in these countries, the same commodity is sold at USD850 per ton, thereby denying Malawi about USD350 of forex per ton in the process. That translates to a loss of USD35 million,” further argues CDEDI.
A week ago, Consumers Association of Malawi executive director John Kapito also faulted government for failing to protect consumers; saying they are paying more to access sugar.
Meanwhile, The Radar understands that Competition and Fair Trading Commission is yet to make determinations on some cases it has been probing Illovo Sugar Company for.
