Online Reporter
Farirai Machivenyika
Senior Reporter
Government should initiate reforms of the sugar industry value chain to improve its competitiveness, attract new investment and viability of farmers, the Portfolio Committee on Industry and Commerce said on Tuesday in its report of an inquiry on the sugar value chain tabled in the National Assembly by its Chairman, Cde Clemence Chiduwa.
The committee also recommended amendments to the Sugar Production Control Act to take into account current trends in the sector.
“The Ministry of Industry and Commerce should engage a reputable independent consultant with experience in developing or evaluating the DoP formula to carry out comprehensive research to come up with a Division of Proceeds (DoP) ratio acceptable to both outgrowers and millers by October 31, 2026,” the report reads.
The DoP currently stands at 80,5 to 19,5 in favour of farmers over millers. However, the farmers argue that the current ratio doesn’t take into account proceeds accrued from by-products from sugar cane milling like ethanol, molasses and stockfeed.
“The Mutapa Investment Fund must recapitalise the National Railways of Zimbabwe (NRZ) to enhance efficiency in the transportation of sugarcane as well as distribution of the final product by December 31, 2026.
“The Ministry of Lands and Rural Development should issue bankable land tenure instruments to at least 70 percent of out-grower farmers within two years to improve access to credit.
“The Ministry of Finance, Economic Development and Investment Promotion, in collaboration with RBZ, should establish a concessional financing facility by December 2026, offering interest rates below 15 percent for sugar value chain players to support refining operations, which require substantial capital investments for running costs and for expansion,” the report further read.
The committee also called on ZINWA and ZESA to prioritise the sugar industry and commit to uninterrupted supplies of water and electricity, respectively.
It also urged the Ministry of Industry and Commerce to incorporate Vitamin A fortification as a requirement when issuing permits for table sugar imports.
The committee said the legal requirements for local players to fortify their product and the Sugar Tax make locally produced sugar more expensive as compared to imported sugar.
“The Ministry of Industry and Commerce must install an additional mill in Mkwasine with a production capacity of between 5 00 to 10 000 tonnes of cane per day to reduce transport costs and introduce competition in the milling segment.
“The Ministry of Agriculture, Mechanisation and Water Resources Development should ensure that, by 31 December 2026, it transitions to a consumption-based water billing system and rehabilitates conveyance infrastructure from major dams, aiming to reduce water losses by 30 percent,” the report read.
The Competition and Tariff Commission was also urged to review market structure and recommend measures to enhance competition, including the feasibility of an additional mill, while it also recommended that the Ministry of Finance, Economic Development and Investment Promotion should, by 31 December 2026, review the sugar tax and fortification policies to balance public health goals with industry competitiveness.
“The sugar value chain in Zimbabwe remains a critical pillar of the economy with strong potential for growth and value addition,” it said.
“However, stakeholders submitted that its competitiveness is constrained by macroeconomic instability, high input costs, infrastructure deficits and institutional inefficiencies. The Committee is of the view that addressing these challenges requires coordinated efforts from Government, industry players and stakeholders.
“With appropriate reforms and investments, the sugar industry can significantly contribute to national development and industrialisation goals.
The Committee therefore urges all stakeholders to act on the recommendations outlined in this report to ensure a sustainable, competitive and inclusive sugar value chain in Zimbabwe.”
