AN ASSESSMENT OF THE STRUCTURAL AND POLITICAL ECONOMY ISSUES IN THE ZAMBIA SUGAR INDUSTRY

1. AN ASSESSMENT OF THE STRUCTURAL AND POLITICAL ECONOMY ISSUES IN THE ZAMBIA SUGAR INDUSTRY By: MUSONDA MSETEKA Assistant Programs Officer CUTS International

2. About CUTS International • CUTS Lusaka was established in Zambia in 2000. • Functions as a centre of excellence for policy research, advocacy and networking • “CUTS has distinguished itself through its stress on consumer – producer synergies for sustainable increase in consumer welfare, given that the ordinary consumer is not just a functional unit but an actual human being whose welfare and growth depends significantly on their association with economic production and the income generating opportunities arising from such association”.

3. ROLE OF CUTS • Our role is to conduct evidence based research mainly to feed into our advocacy work through a process we call (RAN) • More importantly, we have over the years been providing services to consumers – despite our limited financial resources. • Lusaka Water Case • Power Interruption • The issue of No Refund No Return (resulting in it being incorporated in the CCPA) • The Cement case • The Internet – Zamtel Case • The Zambeef Case • All these cases are can be accessed on the our website http://www.cuts-international.org/ARC/Lusaka/interventions.html

4. PROJECT BACKGROUND The sugar sub-sector is very important in Zambia, contributing about 1% to GDP. About 4% to total merchandise exports and employing over 8,000 permanent and seasonal workers There have been several concerns about the market structure as well as the prices of sugar in the market This led to the sector being the subject of discussion and research over the past years. However, the question which still sands is whether the exiting literature have covered enough ground on the sector CUTS, under the ZEAP programme, identified the sugar sector as a sector for detailed analysis.

6. PROJECT OBJECTIVES • To review the existing literature on the Zambia sugar sector to identify research gaps where in information where • To collect general statistics in the sugar industry in Zambia, which were used to confirm the existing market shares held by different production companies; domestic sales and export figures; the divisions between commercial and small scale farming contributors to production; contemporary costs of sugar production; as well as the current retail and wholesale prices; • To review the current policy context on import and export tariffs on sugar, competition law, the position with respect to new investments in the sector and the key policies in neighbouring countries towards additives

7. METHODOLOGY • A simple methodological approach of literature review, basic data collection on wholesale and retail prices and in depth interviews with key stakeholders was employed. • Literature review was undertaken for a general understanding of the market structure of the sugar industry in Zambia. • Literature review was mostly previous research into the issue by various researchers as well as company specific information, mostly through the websites of the sugar producing companies.

8. METHODOLOGY cont. • The identified stakeholders were interviewed to get their views regarding the sugar prices. • The information gathered was then used in the assessment, which is mostly an attempt to give an understanding about the production process, which includes the costs incurred at the various stages in the production chain. • Areas of possible intervention were then flagged out based on the assessment.

9. Expected outcomes • An informed overview of what been covered in the sector and the gaps which exist • Key immediate issues of consumer concerns identified

10. CONCLUSION • This is an open process/project and we encourage interested stakeholders to seize the opportunity and participate in the process Ends