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Uganda: Sugarcane producers lament as regional market shrinks due to oversupply, low prices

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Ugandan consumers are celebrating the lowest retail prices for sugar in five years although the industry is currently unstable. However, Planters are objecting to declining sugarcane prices due to a glut that millers attribute to rapidly contracting local markets, which has caused domestic stockpiles to reach previously unheard-of heights.

In protest at the decline in prices from Ush250,000 ($67.72) per tonne, a little over a year ago, to Ush140,000 ($37.92) today, growers in the eastern region of Buikwe decided this week to stop supplying cane to Sugar Corporation of Uganda Ltd (Scoul), located in Lugazi.

The millers claim they are in a bind and threaten additional drops unless Uganda is allowed access to crowded regional markets.

“It is a misconception for anyone to believe that cane prices are simply a reflection of the supply of cane; they are more a reflection of the challenges in the market for refined sugar,” said Wilbur Mubiru, spokesperson for industry lobby Uganda Sugar Technologists Association.

“Whenever we face challenges in the market for refined sugar, that is transmitted backwards to the price for the cane. If we had better access to the East African market, we would be happy and outgrowers would be happy, but there is nothing we can do about it now.”

Retail costs in Uganda have recently dropped significantly, averaging Ush3,300 ($0.89) per kilogram. It is less than half of what it was three years ago when it peaked at Ush7,000 ($1.90) a kilogram. Uganda’s demand for sugar was negatively impacted by the COVID-19 shutdowns in 2020–21, which caused many farmers to give up on growing sugarcane.

However, as markets opened up as a result of disruptions to international shipping, the region saw dry conditions that led to a jump in demand and sky-high retail prices.

As prices sharply recovered, a new normal was established, which encouraged more individuals to cultivate cane. Currently, several millers anticipate more price reductions.

“We see cane prices falling even more, as the crop planted over the past two years reaches maturity,” said Albert Bituura, general manager at Bwendero Sugar, a small miller based in the western Ugandan district of Hoima.

“We are dependent on the Kenyan market, which is now flooded with their domestically produced sugar because of good rains over the past 18 months. The regional market has seized up as a result.”

Due to limited access to export markets, Uganda’s sixteen sugar plants, which have an installed capacity of 1.2 million tons annually, are only working at half of that amount. There are only 0.4 million metric tonnes consumed domestically. Kenya stands as the greatest regional market, with a one-time peak of 100,000 tonnes of Ugandan exports.

Millers have been thinking about automating the loading and harvesting process, but there has been opposition and threats of arson. Growers are the most vulnerable in an unfair status quo caused by the industry’s backtracking.

 

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Dangote Group optimistic about boosting Nigeria’s falling currency with $30 billion revenue

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The $30 billion in income that Dangote Group plans to generate by the end of 2025, according to company President Aliko Dangote, will strengthen the naira. Dangote made the plan known during a Monday tour of Dangote Fertilizer Limited and Dangote Petroleum Refinery & Petrochemicals.

The plan signals a strategy to become independent from the Central Bank of Nigeria regarding foreign exchange sourcing.

The richest man in Africa stated that the substantial amount of foreign exchange that his companies are expected to bring into Nigeria will naturally increase the value of our local currency and restore the value of the naira in the global exchange market.

When the refinery started operating fully in 2024, its primary focus was on the refinement of intermediate products, including naphtha, polypropylene, RCO, gasoline, diesel, and jet fuel.

He clarified that in March 2024, the refinery began its steady-state production phase. Furthermore, he projected that by August, production will escalate to 500,000 barrels per day with 15 crude cargoes each month, reaching 550,000 bpd by the end of the year, and aiming for 650,000 bpd by the first quarter of 2025.

“Petrol production will commence in July with sales from August,” assured Dangote.

Additionally, he disclosed that the group plans to list Dangote Fertilizer Limited and Dangote Petroleum Refinery & Petrochemicals on the Nigerian Exchange Group in the first quarter of 2025.

He continued by saying that Nigerians would be allowed to take a stake in these businesses.

“Due to the nature of our business with both the refinery and the fertiliser, we are aiming to list them by the end of this year. However, depending on circumstances, worst-case scenario, we anticipate listing them before the end of the first quarter of next year. This will allow us to offer shares for sale and enable Nigerians to participate as shareholders,” Dangote stated.

At full capacity, the Dangote Refinery can process 650,000 barrels of oil per day, making it the largest single-train facility in both Africa and the globe.

Additionally, the largest granulated urea fertiliser factory in Africa is run by Dangote Fertiliser Limited. At the moment, the most capitalized firm in Nigeria is Dangote Cement.

He emphasized that the refinery would produce 53 million litres of gasoline and 1.1 million tonnes of diesel per day, although its total storage capacity is 4.5 billion litres, which is enough to meet Nigeria’s crude needs for 20 days and store products equal to 15 days’ worth of fuel.

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Tanzania eyes law to promote foreign investment

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The Tanzanian government has suggested changing its rules to give Tanzanians living abroad special status so they can open businesses in important, high-priority economic sectors to attract more foreign investment.

The government has introduced the Miscellaneous Amendments Bill 2024 to Parliament for discussion, aiming to offer special status to Tanzanians residing abroad so they can establish businesses in their home country, thereby relaxing its burdensome regulations and legislation.

Through the Diaspora Tanzanite card, Tanzanians living abroad will be eligible for inheritance rights and investment incentives under the proposed immigration law revisions.

Only citizens of Tanzania have been allowed to possess land and other properties. The Miscellaneous Amendments Act, 2024, was released on June 26 and suggests amending the Land Act, cap 113, and the Immigration Act, cap 54, to grant land occupancy titles to Tanzanians residing abroad.

Tanzania is one of the African nations with stringent immigration laws and restrictions on property ownership rights that are placed on foreign nationals and residents who hold dual citizenship.

Before this, President Samia Suluhu Hassan had pledged to examine the Immigration Act. During her six-day official visit to Seoul in June, she addressed Tanzanians living in South Korea and promised her government would make sure Tanzanians living abroad would receive special treatment, including the opportunity to settle in Tanzania without having to go through a laborious visa application process.

As of 2018, the manufacturing sector in Tanzania attracted the greatest concentration of foreign direct investment (FDI) among all economic sectors, according to Statista. It totalled 1.4 billion dollars, which was split among 133 projects. After that, FDI in agricultural activities totalled more than half a billion dollars.

She promised to provide the legislative framework necessary to allow Tanzanians living abroad to send money home through their families to invest in, acquire, and use technology and knowledge that are primarily required for manufacturing, services, and agricultural output.

Samia informed the Tanzanians in Seoul that by 2023, Tanzanians living abroad had invested almost Tsh280 billion ($106 million) in housing, while others had purchased shares in UTT Asset Management and Investors Services (UTT AMIS) for Tsh6.45 billion ($2.4 million).

Through unified laws throughout the EAC, the Tanzania Investment Center (TIC) has been encouraging members of the East African Community (EAC) to form cooperative companies in Tanzania.

To identify and help Tanzanians living abroad register for business and investments, the Ministry of Foreign Affairs and the East African Co-operation built a diaspora database. The database is based on the availability of enough land that would be a good investment.

Tanzania lacked active agricultural investments, had a weak agro-industrial basis, and received little revenue from cash crops despite having abundant agricultural land.

Tanzania has 44 million hectares of arable land in total, according to data from the Ministry of Agriculture, but only 15 million of those hectares are being farmed for both food and commercial crops.

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