Tuesday, August 14, 2018

Sweet Deals

A disaster: that's what Samuel Nyandemo, senior lecturer on economics at Nairobi University, calls the refusal by lawmakers to investigate finance minister Henry Rotich and East African community minister Adan Mohamed, previously minister for trade, for their roles in the importation of contaminated sugar from Brazil last year. "Members of Parliament are supposed to be truth seekers. But they have resorted to rent-seeking," Nyandemo told DW, pointing out that there is ample proof that lawmakers took bribes from the industry to ditch the investigation. "A good number of those members of parliament that didn't want to take bribes have come out openly and they say they saw bribes being received," he said.
To solve an alleged shortage, finance minister Rotich last year gave the sugar barons the authorization to import any amount deemed necessary, leading to an oversupply of 450,000 tons. This had a direct negative impact on sugarcane farmers and the local sugar industry. It also cost the state millions in tax revenues. Moreover, minister Mohamed is accused of failing to supervise the quality of the imported commodity, which turned out to be tainted and a health hazard for consumers. 
According to economist Nyandemo, Kenya itself had no real need for imported sugar. Claims of a shortage were attempts by sugar traders to manipulate prices. "In any case, Kenya is a member of the East African Community (EAC) and COMESA (Common Market for Eastern & Southern Africa)," meaning that any imported sugar should have come from another member state," like Sudan, "which is known to produce sugar at a lesser cost than any other country in the region," he said.
Nyandemo has no doubts that the sugar in question was smuggled to other countries. 

Kenya's "sugargate" has spilled over into neighboring countries. Last week, President Yoweri Museveni of Uganda and President John Magufuli of Tanzania met to solve a dispute over Ugandan sugar exported to Tanzania. They took care to point out that the fault lay with Kenya. Allegedly, the sugar sold by Uganda originated from Kenya and was then repackaged to be sent on to Tanzania. There are fears that it could be the same Brazilian product considered unfit for consumption. Tanzania is also trying to protect its own industry and feels that imports from abroad are unfair competition.

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