Battle rages on sugar import licences

Malawi Government faces a daunting task to balance between protecting local manufacturers’ monopoly of the sugar market and interests of consumers who feel local sugar prices are exorbitant and require import competition.

Following issuance of two sugar import licences to Mugisha Investments to bring in 20 000 metric tonnes (MT) of brown sugar, local giant Illovo Sugar (Malawi) plc has protested, saying this will affect earnings of sugarcane growers.

In a viral memo dated May 9 2023, Illovo Sugar (Malawi) plc argued that government’s decision would displace 20 000MT of local sugar and subsequently affect earnings of local sugarcane growers.

The company also argues that the import licences were issued in disregard of the Control of Goods Act which among others requires that the minister makes consultations before such licences are issued.

But in an interview on Tuesday, Ministry of Trade and Industry spokesperson Mayeso Msokera said they engaged Illovo management, users of industrial sugar and end consumers on the matter on Monday.

He said: “The [high sugar price] is rendering locally-produced sugar uncompetitive.

“The ministry is hoping that sugar producers will consider offering affordable negotiated rates to end users, especially considering that they continue to record high levels of performance.”

Msokera said they have encouraged sugar producers and users to engage and negotiate for affordable rates.

While confirming attending the Monday meeting, Illovo Sugar (Malawi) plc company secretary Maureen Kachingwe on Tuesday said she would not be making further statements on outcomes of the meeting and further steps to be taken.

But Consumers Association of Malawi (Cama) executive director John Kapito said Illovo Sugar was exploiting consumers and abusing its market power.

He said: “The company is exploiting consumers by producing sugar at K1 500 per kilogramme [kg] which consumers cannot afford.”

Minority Shareholders Association chairperson Frank Harawa said it was important that Malawians enjoy sugar at a low price.

Meanwhile, Centre for Democracy and Economic Development Initiatives executive director, Sylvester Namiwa, has written the Public Accounts Committee (PAC) and Trade and Commerce Committee of Parliament to hold a public inquiry on the matter.

PAC chairperson Mark Botomani on Tuesday said the committee will meet soon to interrogate it and see if it is within their mandate to pursue the issue.