By IOMMIE CHIWALO
The human rights advocacy organisation, Centre for Democracy and Economic Development Initiatives (CDEDI) has demanded for an explanation from concerned authorities on the current ‘sugar crisis’ that has seen rationing and soaring prices in major trading centres.
Addressing the press in Lilongwe CDEDI Executive Director Sylvester Namiwa wondered why a small deficit of 20,000 tonnes, after producing 230,000 tonnes, from the actual 250, 000 tonnes has led to the current level of crisis yet the producer is boasting of obscene profits while consumers are exposed to dehumanizing poverty.
“Is this crisis real, or a sinister ploy to benefit cartels in the sugar industry at the expense of millions facing dehumanizing poverty,” queries Namiwa while urging Minister of Trade and Industry Sosten Gwengwe and Illovo Sugar Company to come out in the open and explain to Malawians the real cause of the current situation.
He said the current situation is forfeiting all the government efforts in recovering the economy following the 44 percent devaluation of the kwacha in December 2023.
Meanwhile CDEDI questions as to why Illovo Sugar Company, which was established in 1950, when the countrys population was around four million, does not seem bothered to expand its production base to meet the growing population, now estimated above 20 million, and yet it declares obscene profits on yearly basis.
“Further to that, this begs for a question as to who is really benefiting from the sweat of over 4,000 cane farmers that sacrificed their land and sweat annually in this industry that used to be the countrys third forex earner, and known for its colossal profits, hovering around 700 percent,” queries Namiwa.
He has disclosed that the current status has been aggravated by Ministry of Trade and Industry’s failure to issue import licences on time to interested firms, since sugar is a protected commodity, according to the Control of Goods Act (COGA) of 2018.
“But the sad reality is that the situation is envisaged not to improve anytime soon given that even in the event of another business entity acquiring an import licence, procedures on the ground will require a minimum of 60 days for it to secure the commodity, and when you factor in the problem of forex shortages, you realise that the waiting for the sugar situation to improve is far from beginning,” he said.
According to research carried out by CDEDI, the sugar crisis is here to torment Malawians until April this year when the Illovo Sugar mill is expected to start running again.
Namiwa has since requested for an immediate response from responsible Trade Minister to tell the nation when Illovo Sugar Company notified government about the impending sugar crisis and its justification.
“The Minister should also explain to Malawians his ministrys fallback plan to contain the situation more so in the face of the prevailing forex crisis and that he should provide documentary evidence of Sugar tonnage that Illovo exported to Mozambique, Zambia and Tanzania between May and December 2023,” he said.
Additionally, Namiwa has also tasked Minister Gwengwe to make public the quota allocated to the top-five sugar distributors that include; Kalaria, Priceworth and Simama General Dealers.
Currently, the situation is dire to the extent of rationing which has resulted into surging prices of the commodity now fetching at as high as K2,750 a kilogramme packet in Blantyre and a lot more elsewhere.
In 2023, High Court’s Commercial Division granted Illovo Sugar Company an injunction, restraining the Director of Public Prosecutions (DPP) and the Trade and Industry Minister from acting on the Competition and Fair Trading Commission (CFTC) determination that faulted Illovos unfair sugar price increases and CDEDI is of the view that Illovo is taking advantage of this injunction to continue milking Malawian consumers.
Namiwa says it is worrisome that the Court’s decision also forced Parliament to halt the adoption of findings and recommendations of its Committee on Trade and Industrys first-ever public hearing on sugar production and pricing held between 13th and 14th of July 2023, which was conducted at CDEDIs request.
“And apart from that, Treasury released K1 billion to curb smuggling through a joint initiative between the Ministry of Trade and Industry and Malawi Revenue Authority, where advanced technology [supported by drones] was procured aimed at arresting smuggling. If this initiative did not yield the intended results, why wasnt the nation appraised on the same since taxpayers money was involved,” asks the CDEDI Chief.
Last year Illovo Sugar Company after being pressurised on disclosure of its taxes to the Malawi Government, it was caught on camera declaring its annual taxes in the middle of the press but never bowed down to the demands of the general public to have locally produced sugar prices reduced.