Uganda: Sugar Firms Want 100 Percent Duty on Imported Sugar Maintained
New Vision (Kampala), Ibrahim Kasita, 16 July 2007
"We are not ready and urge the Government to protect the industry through its existing doctrine of 100% tax regime on sugar originating from countries other than the East African Community (EAC)," Sudeep Mohanty, the head of marketing at the Sugar Corporation of Uganda (SCOUL), said.
He said if the local market is opened up, a lot of cheap sugar would be imported. Mohanty said extending the common external tariff and imposing other forms of tariffs would prevent duty-free sugar from coming into Uganda.
"Comesa countries enjoy economies of scale, allowing them to export sugar to the East African market," he added. Richard Orr, the Kakira Sugar Works' general manager, said Uganda has a choice to produce sugar locally and employ its citizens or import it.
"The sugar industry employs more than 20,000 people, while more than 150,000 persons depend on the industry," Orr said. SCOUL, Kakira and Kinyara Sugar produced 191,256 tonnes of sugar last year. The demand for sugar is expected to grow to 750,000 tonnes by 2030.
However, the industry is ready for competition even if the safeguard policy is not renewed. "We are ready for any eventualities and will remain competitive. Over $100m (sh165b) is invested in the three sugar mills. Realisation of the expansion programmes in terms of additional sugar production and power export to the national grid is imminent," Orr predicted.
"We are trying to expand and diversify to get set for competition. This will help exploit our co-generation potential, sustain the environment and increase outgrowers' production which will improve their incomes."
Kakira has embarked on $20.5m (sh33.8b) power co-generation project that will produce 22MW, while SCOUL has invested $10m (sh16.5b) to co-generate about 6MW.