ONE LUMP OR TWO?

Tanzania 2015 | AGRICULTURE | INTERVIEW

TBY talks to Henry J. Semwaza, Advocate, Director General of the Sugar Board of Tanzania, on efforts to become self sufficient, possible export markets, and reform in the sector.

Henry J. Semwaza
BIOGRAPHY
Henry J. Semwaza holds Master’s and Bachelor’s degrees in Law from the University of Dar es Salaam and practiced corporate and civil law from 1999 until 2001. In 2001, he joined Tanzania Standard Limited as its Chief Legal Council. In 2004, he became the Sugar Board of Tanzania’s Legal Secretary, and in 2008 was promoted to Director for Legal and Regulatory Services. In 2012, he became the Sugar Board’s Acting Director.

How would you characterize the progress of the Sugar Board's projects to triple Tanzania's sugar production?

For the time being, we have lined up one new project that is about to come in. This is a business project carried out by Agro EcoEnergy. It is a greenfield project that aims at producing sugar and ethanol. The sugar will be produced in a volume of around 125,000 tons per year, and will also be diverted to ethanol, co-generation, and other by-products of sugarcane. The project is set to commence shortly, and the early works were launched in March 2014.

What role will the private sector play in this project?

Actually, the investment is supposed to come from the private sector. What we do is promote the project. We try to arrange for land to be placed under the brief of the Tanzania Investment Center (TIC), which then identifies potential investors for the sugarcane projects. The government may retain minority shares not exceeding 25%.

Do you target Tanzanian investors, or investors from abroad?

We do not discriminate, and the process is open and transparent. The opportunities will be advertised internationally, and there is considerable interest in investing in our sugar projects. The only hindrance has been finding unencumbered land, a bottleneck that we are making serious attempts to sort out.

What are Tanzania's plans for exporting sugar?

For the time being, we are deficit producers; however, we have the potential to become self-sufficient and even to export. We have an ambitious plan to become not just self-sufficient, but also to have at least 100,000 metric tons more for export to regional markets as well as international ones. We gave ourselves until the end of 2015 to be self-sufficient, but I think we were over ambitious in our assessment. Because of the land limits, I think we need three or four more years to become self-sufficient. When we start exporting, the first priorities will be the regional market. Subsequently, other markets, such as the EU, can be explored. Then, we have to be competitive to sell to the world market. Since the sugar regime is being reformed in the EU, we must be competitive. We have to lower our costs and maintain high-quality sugar so that we can access regional and world markets.

How can Tanzania increase its production and the quality of its sugar?

We have now embarked on a program of changing sugarcane varieties, as we have been using old varieties. These have caused low yields and they are susceptible to diseases and pests. We are now introducing new improved varieties that are high in sucrose content, with high yields, and are resistant to diseases and pests. With improved varieties, we can have higher yields and higher sucrose content; hence, the volume and quality will improve. If we have disease-free sugar cane, then the sugar that comes out of it is also of top quality, which can lead to better access to global markets. These new varieties of sugarcane are now being introduced through a project that was implemented through the Common Fund for Commodities (CFC). They funded a project to improve the varieties, which are now being propagated within East Africa for use by smallholder farmers and large estates.

What role can the sugar industry play in developing Tanzania?

First of all, the sugar industry is vital for promoting rural development. Smallholder farmers around large estates can farm cane, deliver it to the mills, and receive an income. Sugarcane is a lucrative way of generating income. Once growers are attracted toward farming sugarcane, then they can readily sell it to the mills, and improve their life standards. If you look at the areas surrounding the large sugar mills where the growers live, you observe substantially improved livelihoods.

What legislative changes are needed to improve the power of this sector?

We have recently changed the laws and regulations to try to create a conducive atmosphere for people to venture into sugarcane agriculture, and also be attracted to providing supplementary services to the sugar industry. We think that the present legal framework provides enough safeguards and incentives for stakeholders to enter the sugarcane business. We do see some challenges for the time being; for example, whenever there is a surplus in the world market, sugar gets directed into sugar deficit countries, or is smuggled in by illegal importers. This is a challenge against which we must protect our local industry in order for it to grow. We have to put up mechanisms and enforce laws in collaboration with other players and authorities, such as the police and revenue authorities, so that we can better enforce the laws and protect farmers. Any actor that brings in sugar that is not licensed by us commits an offence and will be penalized. That has been harming our industry as well as many others. Within the East African market, we all suffer from the same problems. In Uganda, Kenya, and Tanzania, illegal imports are a common problem for all of us. We have to find means to stop the illegal sugar business.

What are your main goals for 2014?

We wanted to become self-sufficient, but I think it will take two or three years more to reach our goal because of the land limitations. However, we are making efforts in this direction and I think in the not-too-distant future we will have enough land to start these projects. We will need two or three more years. I think by 2018 we will be close to self-sustainability and self-sufficiency. The government is doing much to solve the problem of acquiring land for sugar production. There is already a task force to find land for investment into sugar and sugarcane. These efforts are underway, and, once we are done, this country will be self-sufficient and more. Once we get the land required, everything else will fall into place.