East Africa: Rwanda Blames Sugar Shortage on Region's Hefty Import Tariff

Rwanda has blamed its current sugar shortage on the region's heavy tariff on sugar imports from outside the region.

Kigali says the EAC's common external tariff (CET) of 25 per cent and VAT of 18 per cent on sugar from outside the region has crippled the capacity of its sugar traders to create the commercial relationships in the global sugar market that are needed to access extremely competitive sugar stocks.

Mid last year, Kigali was granted a waiver of duty on imported sugar for six months to allow it to import 50,000 metric tonnes from outside the region, however, only 4899 metric tonnes have entered the country so far.

The government is now requesting the extension of the waiver. The waiver was granted to avert a potential shortage of around 20,000 metric tonnes of sugar following a regional sugar crisis last year.

"The EAC import duty led to our traders losing their supply networks, it has been difficult for them to find sugar because they had no commercial relationship with suppliers outside the region," Rwanda's Trade Minister Francois Kanimba told The East African last week.

"We had to start from zero, which is why the sugar prices have not come down as expected. The sugar is not yet sufficient enough to lower prices," he added.

Mr Kanimba said that due to supply constraints, the retail price of sugar has not reduced to $1.3 as initially expected at the beginning of this year. Retail prices rose early last year, with the price of imported sugar going up to $2 from $1.6 per kilogramme, while locally produced sugar increased from $1.3 to $1.6.