FG fails to meet 1.79 mn tonnes of sugar production target by 2020

Nigerian capacity for Sugar production has failed to improve significantly despite efforts by the Federal government to reduce importation of raw sugar and create self-sufficiency using Sugar Master Plan which has been in existence for the past eight years.

Though the Nigerian Sugar Master Plan (NSMP) will terminate in 2022, currently, the country’s production capacity is less than 300, 000 tonnes instead of the 1.79 million tonnes as targeted for 2020.

Initiated in 2012 under Goodluck Jonathan administration with an estimated target of 1.79 million tonnes of sugar produced locally by 2020, Nigerian Sugar Master Plan (NSMP) programmes have not been able to close gaps in the sector which has made the country to still depend totally on the importation of raw sugar.

Characterized by poor implementation, programmes under the NSPM particularly the Backward Integration Programme (BIP) which was initiated as a strategy to drive or boost local production of sugar in Nigeria has performed below average over the many years.

Pioneer companies of the BIP programme, Dangote, BUA and Golden Sugar had over the years given reasons for their underperformance ranging from flooding, community hostility, land dispute with state governments and difficulties in accessing funds.

Even though the Federal Ministry of Industry, Trade and Investment has not held its quarterly review of the BIP performance in 2020, the reviews held in 2017, 2018 and 2019 showed that the pioneer companies under BIP, Dangote, BUA and Golden Sugar have performed far below average in the sourcing of raw materials for local production.

According to a document, Nigerian Sugar Master Plan (NSMP) published by the National Sugar Development Council (NSDC), “the NSMP provides a framework for setting goals, defining key actions, and generating and allocating resources to fund programmes in the industry.

“In order to both stimulate and protect the local investment in the sugar sub-sector, a regime of fiscal tariff has been approved to take effect from 1st January, 2013.

“The high tariff structure which is deliberately skewed against importation is also designed to reduce current over-reliance on imported raw sugar (accounting for 98% of total sugar imports) which made the country lose all the benefits of sugar production including employment creation, foreign exchange savings and renewable energy production” the document stated.

The former Minister of Industry, Trade and Investment, Olusegun Aganga said in 2012 that Nigeria spent over N101.9 billion on sugar importation in 2011.

Painfully, eight years after the NSMP came into effect, the story has not changed. The companies under BIP still depend on the importation of raw sugar for their production.

In 2017, the Executive Secretary of NSDC, Dr Latif Busari lamented that “If you look at the sugar Master Plan, the projecting for 2018 is 1.6 million tonnes but following the trend that we see in this year that is about to finish, we are projecting something less than that, we are looking around 1.58 tonnes. And this is what will be shared among the operators on the basis of their performance.

“We are projecting that Savannah sugar will produce 24, 000 tonnes. And Sunnty will produce 5, 000 tonnes which is a far cry from our total demand.”

He said, ” we are working to resolve the problems some sugar companies are having with their host communities.”

Busari further explained that based on the agreement signed with the operators of Backward Integration Programme (BIP) under the Nigerian Sugar Master Plan (NSMP), investment into the sugar industry will improve significantly in the coming years.

Nothing changed, in the quarterly review of 2018, the then Minister for Industry, Trade and Investment, Dr Enelamah Okechukwu constantly scored the BIP companies below average.

The sugarcane value chain which is also supposed to drive growth from cane farm to harvesters to millers and to wholesales, or from outgrowers to transporters to distillers to retailers has remained ineffective.

The outgrower programme under the NSMP which is supposed to give 50% loan through the Sugar Levy Scheme to ensure that at least 40% of the total cane required by sugar millers must be sourced from outgrowers farms around all sugar estates have equally been dormant.

Giving the inability of Nigeria to become self-sufficient in sugar production, sugar has remained an expensive commodity in the country.

The Director of Price service at the NSDC, H. Kolawale blamed the rising price of sugar on the rise of foreign exchange.

He said sugar companies in Nigeria depend on imported raw sugar for production, “so if there is a rise in foreign exchange, it will affect the price of sugar in the country.”

Currently, a measure of sugar is sold for N650 while a bag of sugar (50kg) is sold for N18,000.

The rise in the price of sugar has given birth to the rise of other products that depend on sugar for their production including bread, drinks among others.

With just two years before the expiration of the Nigerian Sugar Master Plan, it is difficult to agree that the current programmes in the sugar sector will end importation and guarantee self-sufficient in sugar production in Nigeria.

At the moment, the country also depends heavily on foreign imported sugar brand to meet its sugar demand.

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