Tanzania and Uganda have reached an agreement on how to conduct cross-border sugar trading between the two East African Community (EAC) partner states, Business Daily reports.
This comes after Tanzania recently slapped a 25 per cent import duty on 12,000 bags (600 tonnes) of Ugandan sugar.
Tanzania’s Permanent Secretary in the Ministry of Industry, Trade and Investment, Prof Joseph Buchweishaija, told The Citizen Thursday that following their recent meeting in Kampala, Uganda, the two countries agreed to sort out their differences on how Tanzania should import sugar from Uganda.
“We agreed that when there is a sugar deficit in Tanzania, our Ugandan colleagues will fill the gap, and that will happen only when there’s a surplus there,” he said.
Last month, Tanzania imposed a 25 per cent import duty on sugar from Uganda.
Mr Jim Kabeho, the Uganda Sugar Manufacturers Association chairman and outgoing East African Business Council chairman, termed this as “blatant disregard” for the EAC Common Market Protocol.
Under the protocol, locally-produced sugar is zero-duty rated in cross-border trade.
Unscrupulous traders
But speaking during a joint press conference with Uganda’s President Yoweri Museveni in Dar es Salaam last month, President John Magufuli said his government banned sugar from Uganda because unscrupulous traders were using the opportunity to bring in sugar originally smuggled into Uganda.
Tanzania’s four sugar factories – namely Mtibwa and Kilombero in Morogoro; Kagera Sugar in Kagera and TPC in Kilimanjaro – annually produce about 300,000 tonnes of sugar, against the domestic demand of 420,000 tonnes.
In such a situation, Tanzania is compelled to import some 120,000 tonnes of the commodity annually to compensate for the deficit.
According to Prof Buchweishaija, sugar was just one of the many subjects that the top leaders from the two countries deliberated upon during their Second Session of the Joint Permanent Commission meeting in Kampala last week. “We also agreed on a number of issues which are intended to improve the trade relations between our two countries,” he said.
Prof Buchweishaija’s Ugandan counterpart, Mr Julius Onen, said in Kampala that Uganda plans to propose a quota system that would allow the EAC member countries to enjoy “first option” status in the event that there is commodity scarcity within the community.
With the quota system in place, he said, the EAC member states would automatically be given the first shot in case of scarcity.
