Parliament holds public inquiry on sugar pricing

Parliamentary Committee on Industry, Trade and Tourism has embarked on a two-day public inquiry on sugar production and pricing in the country to examine, among others, the tax arrangements government entered into with Illovo Sugar Company.

The committee’s chairperson Paul Dumembe Nkhoma said in an interview last evening they expect to summon a number of stakeholders starting with the Centre for Democracy and Economic Development Initiatives (Cdedi) who demanded Parliament to conduct the public inquiry.

Nkhoma said besides Cdedi they have also summoned Illovo Sugar Company, Salima Sugar, relevant government ministries, companies that use industrial sugar, Mugisha Investments who were issued with two licences to start sugar importation.

“Cdedi demanded that we should hold a public inquiry on sugar production and pricing in the country so we are actually trying to address four questions which they raised on the issue.

“We will receive the evidence from all stakeholders and finally make a determination ourselves on whether Illovo sugar is indeed sold at a higher price locally than when exported to neighbouring countries like Zambia, Mozambique and Tanzania,” said Nkhoma.

The committee is expected to look into the tax arrangements entered into by Illovo Sugar Company and government to the effect a packet of sugar costs more locally than in neighbouring countries of Tanzania, Zambia and Mozambique after exportation.

The other issue is on Illovo to justify to Malawians what “obscene profits” the company is registering hovering around 700 percent year in relation to the local sugar pricing.

The committee will also examine Cdedi demand on Malawi Revenue Authority (MRA), Ministry of Finance and other relevant government authorities to explain in whose interest the sugar tax regulations were designed and are being executed, given that they allow Malawians to buy sugar at three times the price when the same commodity is cheaper in neighbouring countries.

Finally, the committee will look into why Illovo is uncomfortable with government decision to allow other players to import sugar that would help lower the prices for the consumers as well as push down prices of sugar related products.

In an interview, Cdedi executive director Sylvester Namiwa welcomed the inquiry and said they were ready to present their case “with a conviction that sugar prices must fall”.

“This matter has attracted huge public interest and we are confident that Malawians will know in whose interest are the players in the sugar industry serving.

“We maintain that neither government nor the cane growers are reaping the benefits of the sugar industry known for its obscene profits. Finally, the time is now for Malawians to know the truth behind the economic exploitation they have endured for decades,” he said.

Last month, the Minister of Trade and Industry Simplex Chithyola Banda ordered Illovo Sugar Company, which has a 95 percent market share, to reduce the price of industrial sugar within seven days.

The dispute between government and Illovo was provoked after the ministry issued two sugar import licenses to Mugisha Investments to bring into the country 20 000 metric tonnes of sugar which the local sugar giants Illovo protested.