ETHIOPIA – Ethiopia, a landlocked country in the Horn of Africa, has outlined an ambitious plan of increasing sugar production from the current 3.6 million quintals to 13 million quintals in the next five years.

The Ethiopian Sugar Industry Group (ESIG) revealed that concerted efforts have been carried out to completely replace the country’s demand for sugar with domestic production in the upcoming five years.

Reta Demeke, Public Relations, and Participation Head at the Ethiopian Sugar Industry Group stated that the Ethiopian Sugar Industry Group was re-established in March 2022 with the intention to match the supply and demand of sugar production.

He lamented that the domestic production and supply of sugar have not been matching the ever-growing demand of the public.

According to academic literature, with three successive governments investing in the country’s sugar industry, the question of why sugar has continuously remained a strategic political and economic tool of the state is critical.

This question is particularly pertinent since, despite decades of aspiration and effort, the governments have not succeeded in making sugar become a major export, but rather meeting the growing domestic demand for sugar, and exploiting the economic advantages of its by-products including ethanol and electricity.

However, Demeke explained that ESIG has been working hard on solutions by identifying the bottlenecks that caused the decline in sugarcane production and the raising in production costs.

The group is giving attention to expanding the irrigation infrastructure for the newly built sugar factories as well as enhancing the practice of buying sugarcane cultivated by farmers and associations in their respective areas apart from factories cultivating sugarcane on their own.

“The country has embarked on a strategic plan so that the demand for sugar production can be covered domestically. A five-year strategic plan is introduced to identify the bottlenecks for the reduction of sugar products and the reasons for the increase in production costs. Therefore, the strategy is for her to overcome these difficulties,” Demeke said.

“Another issue is to expand irrigation development infrastructures, especially in new projects, to increase their coverage and yield of sugarcane productivity. We are working on a plan that will help us to stop importing sugar after 2025.”

In 2022, Ethiopia announced plans to wean local millers off state budgetary support and improve local production with the sale of eight sugar factories.

The move was part of the government’s broad sugar sector reforms aimed at increasing private sector participation to improve the efficiency and performance of firms.

Ethiopian Investment Holdings, the main marketing authority for the government, invited local and foreign investors to acquire up to 100 percent ownership in the eight sugar firms including Omo Kuraz 1, Omo Kuraz 2, Omo Kuraz 3, Omo Kuraz 5, Arjo Dedessa, Kessem, Tana Beles and Tendaho.

ESIG took over the administration role of Kessem and Tana Beles while owning the remaining enterprises.

The transaction was also aimed at creating opportunities for refined and raw sugar exports, enabling foreign currency inflows into the country.

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