High Court supports NFRA role on sugar importation

DAR ES SALAAM: A LEGAL challenge to amendments made to the Sugar Industry Act, which grant the National Food Reserve Agency (NFRA) an exclusive authority to import, store and distribute sugar in Tanzania to address sugar shortages and maintain buffer stock, has been rejected.

This follows a ruling by the High Court in Dar es Salaam, which dismissed a constitutional petition filed by 24 local sugar producers challenging the amendments made to Section 14 of the Sugar Industry Act (Cap 251) through Section 86 of the Finance Act No. 6 of 2024.

Judges Salma Maghimbi, Deo Nangela and Awamu Mbagwa ruled in favour of the Minister for Agriculture and the Attorney General (AG), declaring that the petition was “frivolous and unfounded.” They noted that the petitioners had failed to provide sufficient evidence to support their claims.

“The petitioners have failed to discharge their burden to prove the allegations on balance of probabilities. Having found no grounds to support the petition, the same is hereby dismissed in its entirety,” the judges said in their recent judgment.

The judges further held that the amendments to Section 14 of the Sugar Industry Act, as introduced by the Finance Act No. 6 of 2024, did not violate constitutional provisions such as Articles 21 (1) (2), Article 22 (1) (2), Article 24 (1), Article 26 (1) (2), and Article 27 (1) (2).

The court considered whether Sections 85 and 86 of the Finance Act, which grant the NFRA the mandate to import sugar, align with Tanzanian laws and the Constitution. They also examined whether the amendments undermined the petitioners’ rights by enabling the uncontrolled importation of sugar, potentially harming the local sugar industry and infringing on the rights to work, fair remuneration and property ownership.

After reviewing the submissions from both parties, the judges expressed difficulty in understanding the petitioners’ concerns. They noted that the amendments effectively removed the monopoly on sugar importation.

“It seems to us, as is apparent in their submissions, that the petitioners are concerned that the amendment grants unfettered discretion in determining sugar imports, which could lead to abuse by officials or other parties,” the judges remarked.

The petitioners argued that the amendments were designed to dismantle the local sugar industry, benefiting a few unscrupulous politicians and businesspeople who would manipulate the system to facilitate uncontrolled sugar imports.

They also contended that the amendments would harm sugarcane growers and producers, lining the pockets of corrupt individuals while turning Tanzania into a net sugar importer.

However, the judges found no substantive evidence to support the claims, stating that the amendments were reasonable and valid.

“We have nothing substantive in their submission to substantiate these facts in so far as the amendments are concerned. With this unfounded speculative contention, we hold that Section 14A, brought about by the amendment, is reasonable and valid,” the judges stated. The petitioners also argued that the amendments violated their rights to work, earn income, and protect property and were detrimental to the national economy.

In response, the judges concluded that the amendments did not undermine the local sugar industry but rather supplemented it. They noted that local sugar production often falls short of national demand, insisting that importing sugar helps address this gap and maintain buffer stock.

“The primary supply of sugar in the market remains the task of local sugar producers, with importation serving as a supplementary measure to cover the gap and ensure the availability of sugar,” the judges explained.

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In 2020, Section 14 of the Sugar Industry Act (Cap 251) was amended by Section 91 of the Written Laws (Miscellaneous Amendment) Act No. 3 of 2020, granting local sugar manufacturers exclusive rights to import sugar. However, this exclusive right was reportedly abused, leading to a sugar shortage and higher prices due to a lack of effective management by the local manufacturers.

In response to the shortage, the Minister for Agriculture proposed amendments to the Act under the Finance Act No. 6 of 2024. The National Assembly passed the Finance Act on June 28, 2024, and was assented to by the President on June 30, 2024. These amendments removed the exclusive right to import sugar previously granted to local manufacturers.