NSSF, Prisons joint venture incurs Sh380m in losses

Controller and Auditor General (CAG), Charles Kichere

By Gadiosa Lamtey

More by this Author

Dar es Salaam. The delayed start of a sugarcane processing plant at the Mbigiri Farm in

Morogoro Region has resulted in a loss of over Sh379.4 million, a new report by the Controller and Auditor General (CAG) reveals.

The loss was the result of the sale of sugarcanes that had exceeded its harvesting period, CAG’s report for the 2019/20 financial year shows.

The sugarcane factory at Mbigiri is owned by Mkulazi Holdings Company Limited (MHCL), a joint venture between the National Social Security Fund (NSSF) and the Prisons Department.

The project was supposed to start production in December last year but it was delayed due to a delay in the purchase of machines.

The CAG, Mr Charles Kichere, now says due to that delay the company was also at risk of losing another Sh499.93 million for sugarcane that had also exceeded its harvesting time at Mtibwa farm.

“I recommend Mkulazi Holdings Company to speed up the purchase of plants and establishment of a sugar factory at Mbigiri Farm,” reads part of the report.

The company plans to establish two sugar processing projects that will produce 250,000 tonnes of sugar per year.

This would play an important role in bridging the gap between demand and supply of sugar in the United Republic.

The country currently produces about 470,000 tonnes of sugar annually.

Available data shows that demand for both table and industrial sugar increased by over 16 per cent from 610,000 tonnes in 2018 to 710,000 tonnes in 2019.

Demand for table sugar currently stands at 545,000 tonnes, with Kilombero Sugar Company Limited produces 134,000 tonnes.

Mkulazi Farm will produce 200,000 tonnes of sugar per year while the Mbigiri project based in Kilosa District, will produce 50,000 tonnes of sugar per year.

According to Mr Kichere, the destruction of sugarcane in the farm because they had exceeded harvesting time indicated a lack of attention in preparing a friendly environment for sugar production before the installation of a sugar processing plant.

The other anomaly, recorded by the CAG on the project, was that during the financial year 2019/20, fertilizers and pesticides worth Sh155.2 million were delivered from the warehouse without any approval.

“My review concludes that MHCL has shown efforts during implementation of the Mbigiri Project. Thus, improvements are needed to ensure project implementation reaches the intended goal,” he said.

In addition to that all the loss was due to the company not complying with adequate standards affecting the implementation of the project.