TZ gov’t okays $550 m sugar project, private investor furious

Per Carstedt, Executive Chairman of Agro EcoEnergy is not happy about Tanzania's red tape

Per Carstedt, Executive Chairman of Agro EcoEnergy is not happy about Tanzania’s red tape

The long awaited mega model sugar estate project courtesy of the joint partnership between the Tanzanian government and a Swedish company Agro EcoEnergy will start anytime from now after the former announced to have cleared the technical hitches.

Uncertainty over the implementation of the planned multi-billion-shilling sugar plantation and processing project meant for Bagamoyo District has been irritating to the investor and the communities surrounding the project location.

The government however has finally declared “all the major barriers have been addressed.”
Stephen Wasira, Agriculture, Food Security and Cooperative Minister told this website issues like the boarder wrangle between the cane estate and Saadan National Park, Makaani case court regarding the former 22,300ha Ranch of Zanzibar in Bagamoyo (RAZABA) and policy reforms to regulate the sugar industry have all been ironed out.

Tanzania which announced in 2010 to set up at least 10 sugar factories by 2030 is moving at a snail pace with only a single project on paper.

The minister said that land administration issues have been holding back government’s programme to improve the sector which contributes only 1 percent in the national Gross Domestic Product –GDP.

According to the minister, the ministry for Land, Housing and Human Settlement Development, Agriculture, Food Security and Cooperative and that of Natural Resources and Tourism have all reached consensus on the boarder squabble.

Wasira reveals the government was identifying land for two similar projects in Kagera and Morogoro regions. All these measures he said are aimed at addressing the current sugar deficit standing at 300,000 tonnes annually.

The government announcement comes at a time when major financiers of the Bagamoyo sugar project; the International Fund for Agricultural Development (IFAD) which announced a $66 million commitment, the African Development Bank (AfDB) with $30million, as well Sweden International Development Agency (SIDA) that has earmarked $100 million, have all frozen their pledges pending the October 25 General election.

Agro EcoEnergy (T) Executive Chairman Per Carstedt told Afrika Reporter the government has been dragging its feet and stalling for the last five years and as a result production of sugar is 3 years late.

He claims, should the project fail get going, “it would be a disaster to us and a terrible situation for the communities and its likely Tanzania will slowly be damaged resulting to failure in attracting investors.”

Carstedt nonetheless remains optimistic soon after the election and if all things are in place by June next year, it will take two years to start production and two more years to reach full production level.

About 150,000tonnes of sugar is estimated to be produced a year for the domestic market alongside feeding 100,000MW into the national power grid and making available some 10 million litres of ethanol.

The project is also expected to create 20,000 new direct jobs and will sustain more than 1.6 million people. Sugar industry which has been the engine of the economies in Mauritius, and Soul Paul remains stagnant in Tanzania which despite the arable land and sustainable soil texture imports 300,000 tonnes per annum.

A sugar industry expert tells Afrika Reporter lack of robust investment in the sector compounded with the fastest increasing population, Tanzania is bound to import 500,000 tonnes (in 2020), 1,000,000 (by 2030) and 1,500,000 tonnes by 2035.

The cost implication is that, on top of exporting jobs, Tanzania will also export $10 billion in 20 years (or by 2035), he said this is equivalent to $1 billion every year. “We need to be much focused and develop sugar industries …and this is possible by creating absolute predictable investment environment.”