With every national budget that is presented, […]

With every national budget that is presented, there are Winners and Losers. The Winners are those firms and individuals that stand to benefit, pay less in taxes, get market protection through fiscal measures and get to have the benefit to increase their revenues when the new budget policies and pronouncements are implemented while the losers are those that will end up losing revenue or increase prices to pass on the tax, paying more in taxes and non tax payments etc.

According to the official 2027 budget speech, which was circulated and read by Finance Minister Situmbeko Musokotwane, do you know who the sweetest loser is? Zambia Sugar PLC!.

 This company is owned by UK’s Associated British Foods is publicly listed on the Lusaka Securities Exchange – LuSE , which is a plus as Zambian can get a share of this win by taking a stake via their listed shares.

With a reported 80% market share of the Zambia Sugar market and its proximity to the massive multi billion dollar Democratic Republic of Congo – DRC market, this company is the sweetest loser of the 2027 budget. Other fringe losers from this policy measure announced are other sugar players based in Zambia such as Consolidated Farming’s Kafue Sugar, Kalungwishi Estates Kasama Sugar and Mansa Sugar.

 In the 2027 budget, the Zambian government has introduced excise duty on sugar at K1 per kilogram and at 20% on chocolate and sugar confectionery. So, Zambia Sugar management has to either directly pass on the K1 per KG duty to customers by increasing their wholesale and retail prices or take a knock on their profits partly or fully absolve and pay for the newly introduced excise duty to avoid increasing their prices.

Moreover, Zambia Sugar and other local sugar producers upstream customers who are confectioner and chocolate manufacturers are taking an even higher hit of 20% excise duty. This is likely to result in reduced demand for sugar from these manufacturers as they pass on and partially take up this 20% excise duty.

 When you look at this double hit, Zambia sugar rightly gets the sweetest loser spot from the 2027 budget. Sweet tooth consumers, bakeries, biscuit and chocolate factories should also expect an increase in sugar and confectionary prices, joining UK’s ABF in being the sweetest losers of the 2027 Zambia budget.