LILONGWE-(MaraviPost)-The country’s civil rights Centre for Democracy and Economic Development Initiatives (CDEDI) is calling Trade Minister Sosten Gwengwe and Illovo Sugar Company to come out in the open and explain to Malawians what is causing the current scarcity of sugar in the country.
The call comes amid a scarcity of the commodity for a month when it is sourced however prices are exorbitant on the local market.
Addressing the news conference in the capital Lilongwe on Monday, January 29, 2023, CDEDI Executive Director Sylvester Namiwa wonders, “Is this crisis real, or a sinister ploy to benefit cartels in the sugar industry at the expense of millions facing dehumanizing poverty?
CDEDI also draws the attention of the Minister of Finance and Economic Affairs Simplex Chithyola-Banda, MP to this crisis and cautions him that if nothing is done to it urgently, “it will undermine efforts to recover the economy following the 44 percent devaluation of the kwacha in December 2023”
According to Namiwa, the sugar crisis is here to torment Malawians until April this year when the Illovo sugar mill is expected to start running again.
“Although Illovo Sugar Company has reduced the distribution of both table (domestic) and bottler (industrial) sugar to about a third of its capacity, the situation is dire, resulting in the rationing of the commodity and surging prices, which have gone as high as a kilogram packet fetching MK2,750 in Blantyre, and a lot more elsewhere.
“The scarcity of sugar in the country has been aggravated by the Ministry of Trade and Industry’s failure to issue import licences on time to interested businesspersons, since sugar is a protected commodity, according to
the Control of Goods Act (COGA) of 2018,” says Namiwa.
He observes “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 shortage of forex, you realise that the waiting for the sugar situation to improve is far from the beginning.
“Besides, what is interesting to note is that Illovo Sugar Company, with a 250,000 tonnes production capacity per season, in the 2023 season only had a deficit of 20,000 tonnes, after producing 230,000 tonnes, which makes CDEDI wonder how only that small deficit has brought the scarcity crisis to this level. Malawians may wish to know that this scarcity of sugar is unbelievable and, of course, laughably, being blamed on the impact of Tropical Cyclone Freddy, which hit the country in March 2023, and smuggling”.
CDEDI categorically finds the reasons lame and baseless on account of the following several reasons include:
“It is the same Illovo Sugar Company that vehemently protested the Ministry of Trade and Industry’s decision to improve sugar availability from July to November 2023, by bringing more players into the sugar industry
through the issuance of import licences. What informed Illovo’s protest when it knew its sugar production would be affected because of Cyclone Freddy?
“Treasury released K1 billion to curb smuggling through a joint initiative between the Ministry of Trade and Industry and the 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 wasn’t the nation appraised on the same since taxpayers’ money was involved?”, wonders Namiwa.
CDEDI statement reads, “Because of the above, CDEDI hereby invokes the Access to Information (ATI) law, to demand the following from Minister of Trade and Industry, Hon. Gwengwe: Tell the nation when Illovo Sugar Company notified the government about the impending sugar crisis and its justification; Explain to Malawians his ministry’s fallback plan to contain the situation, more so in the face of the prevailing forex crisis; Provide documentary evidence of tonnage sugar Illovo exported to Mozambique, Zambia and Tanzania between May and December 2023. Make public the quota allocated to the top five sugar distributors including; Kalaria, Priceworth, and Simama General Dealers.
“In the spirit of transparency and accountability, it should be noted that the 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 Illovo’s unfair sugar price increases”.
He lauds, “CFTC recommended that the DPP should commence criminal proceedings against Illovo for contravening the CFTC Act while the Minister of Trade and Industry was tasked to implement a sugar price slash. CDEDI is of the view that Illovo is taking advantage of this injunction to continue milking Malawian consumers.
“From what we have gathered, CFTC challenged the ex parte injunction, a hearing on the matter took place in October 2023, and the court was expected to deliver its ruling within 30 days. The court’s decision also forced Parliament to halt the adoption of findings and recommendations of its Committee on Trade and Industry’s first-ever public hearing on sugar production and pricing held between 13th and 14th of July 2023, which was conducted at CDEDI’s request”.
Namiwa appeals, “When all is said and done, CDEDI, on behalf of Malawians, would like to ask Illovo Sugar Company management to explain to Malawians why the company, which was established in 1950, when the country’s 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 year in, year out?
“Last, but not least, who is benefiting from the sweat of the 4,000-plus cane farmers who sacrificed their land and sweat year in and year out in this industry that used to be the country’s third forex earner, and known for its
colossal profits, hovering around 700 percent?”.
Both Trade Minister and Illovo are yet to comment on the matter.
