Smuggled sugar affecting local industry

SUGAR cane harvest at Nakambala Estates in Mazabuka. PICTURE: CHANDA MWENYA

ZAMBIA Sugar Plc has called on Government to intervene in the influx of cheap smuggled sugar into the country, as it is negatively affecting the local industry.
Company marketing director Chembe Kabandama said last year, about 20,000 tonnes of sugar valued at over K2 million was allegedly smuggled into the country.

Smuggling creates a black economy which is out of the government’s tax net and regulators net. This can lead to loss of revenue to the government and also hurt the domestic industry.
In an interview over the weekend, Mr Kabandama said last year, the country witnessed increased imports of cheap sugar from neighbouring countries.
“We had a lot of imports from Malawi coming in through Chipata, while other products came in through Namibia via Sesheke and from Zimbabwe into Livingstone.
We also had a lot of imports coming from Tanzania through Nakonde,” Mr Kabandama said.
He said sugar is a protected product, which means that before anyone can import the commodity, they require a permit from Government.
“We asked around all the government departments and no permits were issued for any importation of sugar. This simply meant that the sugar on the market was illegally brought into the country.
“When sugar is smuggled, it lands into the country cheaply because no tax is paid on it,” he said.
Mr Kabandama said the imported sugar poses a huge challenge because even if the company had to cut its sugar prices, it cannot compete with the smuggled commodity.
“This is an issue that needs urgent attention; we cannot deal with it alone. We have since engaged relevant government wings. The sugar that we sell locally is value for money- no exploitation,” he said.
Globally, sugar is subsidised but not in Zambia, and this makes it difficult to compete with imported cheap sugar.
Meanwhile, Zambia Sugar registered a drop in domestic sales volume, driven by declining disposal income levels due to challenging consumer market conditions.
According to the company’s financial results ended March 31, 2017, the drop in domestic sales was further driven by competitive pressure arising from illegal sugar imports.


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