Massive Smuggling Hurting Sugar Industry

2178 Views Kampala, Uganda

In short
Trade Minister Amelia Kyambadde says the sugar is smuggled from Kenya, and repackaged as Kakira,Kinyara and Lugazi sugar.

Smuggling of duty-free sugar is hurting Uganda's sugar industry, The Minister for Trade, Industry and Cooperatives Amelia Kyambadde has said
 
Kyambadde was presenting a report on the importation of duty-free sugar, following concerns raised before parliament early this year.
Kyambadde says the rampant smuggling of sugar, mainly from neighbouring Kenya, has led to a drastic fall in sugar prices on the open market. About 55 tons of sugar were seized in operations by Uganda Revenue Authority from July to December last year.
 
Kyambadde said there is no direct importation of duty-free sugar. She says the smuggling is mainly done by boda-boda cyclists through the country's porous borders and repackaged in branded bags of Kakira, Kinyara and Lugazi sugar.
She says this has greatly affected Ugandans whose livelihoods depend on the sugar industry because local sugar companies are not making sales.
 
"Smuggling of duty free sugar has not only hurt the sugar industry but also the outgrowers of sugarcane whose livelihoods entirely depends on supply of sugarcane to the factories, affected electricity generation, and shall eventually affect other industries that depend on byproducts of sugarcane such as distillers of spirits, other beverages, bakeries and animal feed industries" Kyambadde told the house.
 
She says as a measure to curb this, Government is going to undertake operations to curtail smuggling of sugar across borders commencing this week. She also says she will contact her Kenyan Counterpart to express her concern on the flow of the sugar from Kenya.
 
Kyambade says however to minimize the volatility in the sugar sub-sector, the sugar bill which is being looked at will effectively handle the challenges.
 
Early 2017, Sugar prices hit 8,500 Shillings in what was attributed to drought, increased regional demand and increased the cost of sugar cane. Now in the market, the sugar costs about 4,500 Shillings.
 
As of 12 February, Sugar producing countries in Uganda have stocked 60,000 metric tons of Sugar.
 
According to the Ministry, the sugar industry is one of the fastest growing industries in Uganda contributing over UGX 290 billion in taxes in financial year 2016/17 and employing over 60,000 Ugandans directly and indirectly.
 
The Industry produces over 100 MW of electricity from bagasse of which over 40MW is supplied to the national grid. However, the taxes and the power generated have reduced of recent. Currently, there are 30 licensed sugar mills in the country although only 11 are in operation while the rest are at different stages of development.

 

About the author

Alex Otto
“Journalism that changes lives is my goal,” Alex Otto has said on more than one occasion. That is his career’s guiding principle. Has been since he was a radio journalist in the northern Ugandan town of Gulu in 2009.

Otto passionately believes his journalism should bring to the fore the voices of the voiceless like the shooting victims of Apaa. Otto tries in his journalism to ask tough questions to those in positions of authority.

Based in the Kampala bureau, Otto is especially interested in covering agriculture, politics, education, human rights, crime, environment and business. He has reported intensively on the post-conflict situation in northern Uganda.

A URN staff member since 2014, Otto previously worked with The Observer Newspaper from 2012 to 2013 and later the Institute for War and Peace Reporting IWPR based in Gulu.

He was the URN Gulu bureau chief 2014-2016.