Experts say COMESA safeguard mechanism hurts sugar consumers

Nairobi- Kenya (PANA) -- Experts said here Monday that Kenyan consumers pay exorbitant prices for sugar and its end products due to an importation lifeline shielding the local manufacturing industry from increased competition from neighbouring African nations.
A special safeguard mechanism granted two years ago cushions Kenya from excess and unregulated sugar imports from the Common Market for Eastern and Southern Africa (COMESA) member states.
ActionAid International's Food Security Co-ordinator Angela Wauye said the sugar consumers are being hurt due to the sugar lifeline, which was meant to protect the struggling sugar industries get back on their feet before the borders are fully opened for imports.
"The sugar sector is not productive, we need to make it more efficient," Wauye told sugar traders, investors and owners of sugar mills attending a forum convened by ActionAid and the World Food and Agriculture Organisation (FAO).
Kenyan factories have the capacity to produce 500,000 tonnes of sugar every year, which is below the 700,000 tonnes needed by the economy.
The government negotiated for the COMESA lifeline to allow the importation of 200,000 tonnes.
However, the World Bank has expressed reservations at Kenya's restrictions of exports from the 19-member COMESA, saying Nairobi's economy could suffer massive damages if the states whose imports are restricted induced similar protection moves.
"There is no domestic support and general lack of political support for the sugar sector.
We must fight for the listing of sugar as a special product.
The government must also be forced to examine the special safeguard measures," Wauye told the meeting Monday.
Kenya is considered a large-scale consumer of industrial sugar, used in the production of icing sugar for making cakes, sweets and pharmaceutical products, which are later sold within the COMESA region.
Local sugar industries fear the massive opening of the markets would induce large-scale importation of the commodity, making it impossible for them to cope due to their over-reliance on rain- fed agriculture and poor investments in the sugar growing zones.
"Kenya is a high-cost sugar producer.
We are tying to address the problem directly," said Phillip Wanyama, an investor in a new project, the Kamkuywa Sugar Company, a joint venture between South Africa and German investors.
The new sugar project is expected to focus on the production of sugar and its by-products such as power-alcohol, ethanol and the co-generation of electricity.
However, the sugar investors fear that the lack of proper mechanisms to ensure sugar millers get impressive prices for their additional power, to be sold to the national power utility firm, the Kenya Power and Lighting Company, would be grounded by lack of laws.
"We have been cited as having the laziest parliament in Africa that makes on average of two laws a year, at this rate making the relevant laws would take us about 120 years for the industry to move forward," said Peter Kegode, the Chair, Sugar Campaign for Change (SUCAM).
Two organisations, FAO and ActionAid convened the consultative workshop on sugar to address the challenges facing the sector.

04 juillet 2005 15:07:00

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