Despite
Nigeria’s potential in producing sugar for local consumption, the country’s
reliance on the importation of the commodity has become worrisome for a nation
endowed with manpower, raw materials, expanse of cultivable land and excellent
climatic conditions.
In
Nigeria, like in many parts of the world, sugar consumption for various uses is
quite high. The situation has remained largely unchanged. For too long, Nigeria
has been under the stranglehold of sugar importation for the confectionery and
beverage industry.
According
to data obtained from the National Sugar Development Council (NSDC), Nigeria’s
sugar consumption was put at 1.6million metric tonnes (mt) in 2017, 1.56million
mt in 2016, 1.50million mt in 2015 and 1.1 million mt in 2012.
Sadly,
Nigeria manages a paltry two per cent of its sugar requirement. The data
disclose that local production stood at 13,488mt in 2015 and rose with 85.34
per cent to 25,000 in 2016. Consumption level in 2012 was put at 10,843 mt.
To
service the nation’s industrial sugar requirements statistics reveal that as
much as $512 million was sunk into importation in 2012/2013, creating more jobs
for people outside, and locally draining scarce foreign exchange. Last year,
the Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, said the country spends $100 million on
importation of white sugar annually.
One of
the reasons adduced for this trade deficit in the sugar industry is the
challenge of sugarcane cultivation and processing to finished products, which
has been underutilised over the years.
This lackluster
performance has deprived the country of all the benefits derivable from a
vibrant sugar sector. The annual drain on the nation’s foreign exchange
earnings was put at N101.9 billion in 2011, and there was the loss of hundreds
of thousands of employment opportunities for skilled and semi-skilled labour
and food insecurity arising from sugar import dependence. But all these are
about to change now.
Worried
about the development, the immediate past administration set out to change this
with the approval of the formulated National
Sugar Master Plan (NSMP) in 2012. The purpose of the interventions include:
trade instruments, “which give domestic products access to the local markets;
and the N2 billion Agricultural and Infrastructure Support Fund set aside at
the Bank of Agriculture for investors in Government’s Backward Integration
Programme.”
The
NSDC Executive Secretary, Dr. Latif
Busari, at a stakeholders’ workshop in Kogi State, explained the incentives
put in place to attract investors. He said the Federal Government also created
N10 billion funding pool, managed by the Bank of Industry (BoI), with N5
billion matching fund by the NSDC.
The
plan has estimated that the country’s demand for sugar would reach the 1.7
million mt mark by 2021. To be able to satisfy this from domestic production,
there was a plan to establish some 28 sugar factories of varying capacities and
bring about 250,000 hectares of land into sugarcane cultivation, over the next
10 years. The bulk of the investment capital is expected to come from private
investors.
The
Minister of Industry, Trade and Investment, Mr. Okechukwu Enelamah, last year affirmed that the NSDC would
boost local production of sugar over the next few years. In the plan, those
that are prepared to do backward integration were expected to work with farmers
to produce sugar.
He
said the target was to provide 200, 000 tons of sugar locally every year, until
the country would be self-sufficient in sugar production, adding that the
policy came up due to the fact that sugarcane is grown widely in Nigeria.
“Sugar processing is capital intensive and requires billions of naira to set up
a sugar processing plant.”
The
Central Bank of Nigeria (CBN), Governor, Mr. Godwin Emefiele, who was also
worried about the unfavorable trade deficit, declared the readiness of the apex
bank to partner the Nigeria-based Chinese investor, Lee Group, and Jigawa State
government on the take-off of the multi-billion naira white refined sugar
cane factory that could generate N60 billion annually.
Emefiele,
who spoke during the foundation laying ceremony of 12,000 hectares of land for
the sugarcane factory in Garin Chiroma in Gagarawa Local Council Area of Jigawa
State, noted that Nigeria had the potential to produce sugar for local consumption.
The
NSDC Executive Secretary, said to encourage the companies, part of the
concessions approved for the investing operators from the Federal Government
include low tariffs of five per cent duty and five per cent levy for raw sugar
import, rather than the five per cent duty and 70 per cent levy contained in
the National Sugar Policy. These applied to the three prominent companies – Dangote, Sunti and BUA.
Busari
said the concession would help to stabilise the local price of the commodity in
case of hike since sugar production is yet to reach any appreciable level
locally. For now, he revealed that the capacity utilisation within the sugar
refinery sector has gone up from 60 to 75 per cent.
Other
incentives under the plan are zero duty on machinery and spares by local
refining companies, as well as 10 per cent import duty and 50 per cent levy on
imported raw sugar for others. Imported refined sugar attracts 60 per cent levy
and a 20 per cent duty. The high tariffs are deliberately designed to discourage
importation and encourage local production of sugar.
Towards
achieving the target, last August, Dangote
Group signed a Memorandum of Understanding (MoU) with Niger State Government for the establishment of N166 billion
state-of–art and fully integrated sugar complex.
On
completion, according to the President of the Group, Alhaji Dr. Aliko Dangote, the project will generate over 15,000
jobs in the state, and bring about a complete economic turn-around. The $450
million pact, which was signed at the Government House in Minna, is expected to
see the company producing raw sugarcane on 16,000 hectares of land at Lavun
Local Council Area, through an out-grower scheme. The company, boasts of having
Africa’s largest sugar refinery in Lagos, and a sugar cane plantation in Numan,
Adamawa State. But despite the steps, it appears the country is not in any way
inching closer to self-sufficiency, as all indices have shown.
A
sugarcane farmer, Timi Omololu, told
newsmen that despite the fact that sugarcane cultivation holds a lot of promise
for Nigerian farmers, there is little concentration on the cultivation of the
produce. He said: “Unknown to many farmers, sugarcane
has a fast rate of growth. Typically, sugarcane can be harvested over five
times before it is spent (after which new sugarcane plants can be replanted).
There are a lot of advantages accruable to sugarcane farmers, some of these
include its being a raw material for the production of sugar, it can also be
used for the production of biofuels.”
He,
however, noted that the issue of land acquisition has become a serious
challenge, as a majority of sugarcane farms have been turned to residential
areas. He suggested that if government could formulate a legislation that would
be backed by laws, on land acquisition, the dream of producing enough for the
country would soon be realised. “With what we have on ground now, attaining
self-sufficiency in sugar production in 2021 as proposed is not realizable,” he
added.
In a
recent interview with journalists, the Acting Group Managing Director, Dangote
Sugar Refinery Plc, Abdullahi Sule,
said the Federal Government’s drive of ensuring the country becomes
self-sufficient in 2021 may not be realistic. (Guardian)
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