Tanzania is poised to end decades of sugar shortages and become a net exporter, as a surge in foreign and domestic investment fuels a rapid expansion of its production capacity.
For the first time in its history, Tanzania has begun exporting sugar, a landmark achievement that signals a turning point for a nation long plagued by recurrent deficits and price volatility.
The country recently exported 85,000 tonnes of sugar, earning US$72 million in revenue, a testament to the success of a concerted government-led effort to attract investment and boost production.
The government is actively courting both local and foreign direct investment (FDI) to close the long-standing gap between demand and supply. The country’s annual sugar demand is estimated at between 550,000 and 700,000 tonnes.
While production has been increasing, it has historically fallen short of this target. In the 2024/2025 season, national sugar production stood at 453,382.56 tonnes.
At the heart of this transformation are several large-scale investment projects. The Kilombero Sugar Company’s K4 expansion, a US$292 million venture, is set to more than double the company’s output to 271,000 tonnes per season.
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The project, which is 99.8 per cent complete, is a public-private partnership with the Tanzanian government holding a 25 per cent stake.
Similarly, TPC Limited has announced a US$52 million investment to modernise its operations and produce ethanol, while the Mkulazi Sugar Company is now ready to produce 50,000 tonnes of industrial sugar annually, a move that will end the country’s reliance on imports for this refined product.
The major players in the sector are all ramping up production. Kagera Sugar Limited, the country’s largest producer, is expected to increase its annual output to 300,000 tonnes within the next few years. Other key producers include TPC Limited, Mtibwa Sugar Estates, and the emerging Mkulazi and Bagamoyo factories.
These efforts are aligned with the government’s Vision 2050, which aims to make Tanzania one of the top ten food producers in Africa.
“We have an annual demand of 700,000 tonnes of sugar, of which the coming of these investors will definitely narrow down the sugar gap,” said Prof Kitila Mkumbo, the Minister for President’s Office, Planning and Investment.
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Prof Mkumbo is currently in the Morogoro region on a visit to assess investment levels, particularly in the sugar sector. During this visit, he is expected to tour the Kilombero Sugar and Mkulazi Sugar projects.
He is also scheduled to meet with investors in the region at various times to discuss the opportunities and challenges present in the sector.
Despite the optimistic outlook, challenges remain. The sugar industry is still susceptible to seasonal fluctuations in sugarcane quality, particularly during the rainy season, which can lower sucrose levels and affect processing efficiency.
To mitigate this, experts have recommended the creation of strategic stockpiles through the National Food Reserve Agency (NFRA).
The economic benefits of a self-sufficient sugar industry are substantial. The Kilombero K4 project alone is expected to save the country US$70 million annually in imports, create 2,000 jobs, and significantly increase government revenue and farmers’ incomes.
The development of a domestic ethanol industry is expected to further diversify the economy and reduce reliance on imported fossil fuels.
