CREATING AN ENABLING ENVIRONMENT FOR SUGAR INVESTMENT IN NIGERIA BY SONG ABUBAKAR AHMED overdue.

The call for an enabling environment for sugar investment is therefore apt and there is no time more appropriate than now. More so, the present Sugar is an important food item derived from sugarcane. It is a strategic Investment in sugar production and development in Nigeria is long

Potential areas for production of sugar from sugarcane have been identified and categorized into large, medium and small fields covering five of the six geopolitical zones of Nigeria. Surveys have indicated that over two million adopted. It could be higher if advanced agronomic and manufacturing processes are 60,000 tonnes per annum. Positive action was taken by the government to production from NISUCO at that time satisfied up to 80% of Nigerias

food item and has been declared so by the Nigerian Government since 1993.

administration has accorded sugarcane production a third priority after rice and wheat.

tonnes of sugar can be produced per annum from the areas already identified. Up to independence in 1960, sugar consumption in Nigeria was about

produce sufficient sugar for national consumption through the establishment of the Nigeria Sugar Company Limited Bacita (NISUCO) in 1964. The company consumption. This was followed 15 years later with the establishment of production. Savannah Sugar Company Limited Numan (SSCL) with installed capacity of started with an installed capacity of 45,000 tonnes of sugar per annum. The

50,000 tonnes of sugar per annum and a design capacity of 100,000 tonnes of
Creating an Enabling Environment for Sugar Investment in Nigeria By SONG ABUBAKAR AHMED

sugar per annum. All these were efforts made to match consumption with local
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hand kept on declining from 60,000 tonnes per annum for the two companies in the 70% targets were planned Government made certain assumptions which by and large were not fully executed. Amongst them were: Levy and Tariff: Government approved in 1993 that The reasons adduced for the failure was that in 1993 and 2000 when imported white sugar should attract a tariff of 40% and a sufficiency plan. Six months after commencement the policy never mentioned at all and it remained un-taxed to date. nothing was done. The Government assumed that foreign investors were to the 80s to a current miserable 20,000 tonnes per annum. Consumption on the other hand has grown to about 1.3 million tonnes per annum.

two companies was met, as both companies did not develop sufficient land to meet their cane requirement at factory installed capacity.

made to establish new companies to match the increasing demand arising from increasing population with rising income due to oil. Furthermore, only halfhearted efforts were made towards ensuring that the installed capacity of the

Since the establishment of the two companies, no serious efforts were

The gap between consumption and production kept widening. Production on one

levy of 10% to fund the implementation of the selfwas reversed to 10% tariff and 5% levy on imported white sugar. It should be pointed out here that raw sugar was come and invest. Unfortunately they did not come. So The reduced levy on sugar which was to be domiciled in a bank account controlled by the National Sugar development Council (NSDC) to promote the plan was kept by the CBN. The small amount released by the CBN could not effectively

Creating an Enabling Environment for Sugar Investment in Nigeria By SONG ABUBAKAR AHMED

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support even the SSCL and NISUCO to meet the Counterpart assist in the realization of the 70% target; sufficiency.

funding component of the ADB loans which were meant to The privatization policy arrangement of the FGN stopped strangulated any activity towards meeting the 70% selffunding of the expansion of the Sugar Companies which

NSDC on the directive of the Presidency.

Hope for sugar was rekindled in 2010 with the development of the Nigerian 70% self sufficiency by the year 2020. This road map was evolved by the

The objective of the NSMP can only be achieved if the necessary friendly environment is made available for investors to come in and invest with clearly stated in the NSMP and are given below: Government the NSMP. should adopt the

Sugar Master Plan (NSMP) which provided a road map for the attainment of

their funds. These conditions can be created only by Government. The following are what can be regarded as an ENABLING ENVIRONMENT FOR INVESTMENT IN LOCAL SUGAR PRODUCTION. These have been sector of Nigerias manufacturing industry. proposed NSMP for

The current National Sugar Policy should be reviewed in line with incorporated into the amended Sugar policy for immediate implementation.

implementation of a national strategic plan for the sugar sub-

All the policies in the Plan shall be adopted by FGN and

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 The total amount required to execute the NSMP and achieve the investment for this should commence immediately with proclamation of a number of FISCAL incentives. Sugar Levy Account. preliminary works and studies. Part of this could come from the target of 70% self-sufficiency in local sugar production by the

2020 is about $3.1 billion and the mobilization of private million being 10% of the total investment to facilitate the

Government should provide the SEED MONEY estimated at $310 All existing Nigeria policies related to sugarcane and sugar development should be coordinated, structured and focused by the NSDC in close collaboration with relevant agencies. to encourage the setting up of integrated sugar projects.

Government should ensure that ethanol importation is controlled Government should undertake an elaborate enlightenment

or proscribed as may be appropriate as re-assurance for investors programme about the new Government Policy on Sugar development aimed at mobilizing the private sector to invest in projects, availability of credits facilities, grants for infrastructural development etc, should be made the focus of the campaign. its publicity enlightenment campaign. local sugar production. Accordingly, the new policy on funding of including Federal, States and local Governments, relevant MDAs,

Government should ensure the participation of all stakeholders the organized private sector, local communities and individuals in

Creating an Enabling Environment for Sugar Investment in Nigeria By SONG ABUBAKAR AHMED

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 In view of the limited number of competent contractors in this specialized field, Government should allow and encourage and equipment duty-free for such jobs with a view to repatriating them after the execution of the projects. competent and qualified contractors to undertake the specialized contractors should be allowed to bring in specialized machinery Government should ensure that the preliminary activities for sugar estate development such as land acquisition are simplified. In this regard, States and Local Governments should be fully constructing access roads to Sugarcane to Sugar manufacturing companies. refining 1.8 million tonnes which is 40% higher than current Government should stop the establishment of new refineries. infrastructural development of sugar estates. In this regard, such

sensitized to speed up the process of acquiring land for industrial

purposes. State Governments should bear the responsibility for The two (2) operating refineries in the country are importing and

To achieve the target of 70% self-sufficiency in local sugar refined sugar import as obtained in other sugar producing countries in order to discourage Importation and Dumping. production by the 2020, Government should be ready to diligently impose and enforce 80% TARIFF and 40% LEVY on both raw and

National Consumption of 1.3 million tonnes per annum.

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It is necessary to note that the enabling environment created above is create and sustain this environment throughout the implementation period and after. The environment is dynamic and must be made so. SUCCESS STORIES

easier said than done. Government must have the POLITICAL WILL to

The situation in which Nigeria is caught up with respect to local sugar and have approached it in a similar way as we are doing today. The most and Ethiopia. SUDAN important thing is to have the POLITICAL WILL to implement the Plan. I shall take up the example of two success stories related to the Sudan

production is not new. So many other countries have similar situations

Sudan started sugar manufacturing by Government about the same time as Nigeria in 1964. Its Kenana factory currently the largest in the world was built at the same time as SSCL. Sudan realized its potential as a sugar producer and the advantages associated with sugar. It went a head to design the Grand Plan for sugar production which it went into

the Government of Sudan, and in the case of Kenana by the Government of Sudan and some Arab States. professional jobs and 2 million seasonal jobs as direct employment paid The production of 13 million tonnes is to create 800,000

of sugar per annum by 2018. All investments are being carried out by

years. Sudan is now implementing a plan to produce 13 million tonnes

implementation in full and by the Government; within a period of ten

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by the companies. They will co generate 2244 mega watts of electricity which incidentally is more than 50% of Nigerias total electricity generation. (ii) (i) Other complimentary products are: (iii) Dairy products Ethiopia (iv) Meat Animal feeds Ethanol 774 million liters

8.4 million tonnes 3.4 million tonnes

0.200 million tonnes

companies: (i) (ii)

The country also has good potentials for growing sugarcane and Finchaa Wonji 80,000 tonnes per annum

producing sugar. By the year 2007, Ethiopia had the following sugar 75,000 tonnes per annum

In order to derive fully all the advantages of exploiting its potentials, it drew a sugar master plan to be implemented within five years. factories at Awosh Valley. The new position was to be a follows: per annum

(iii) Methora

120,000 tonnes per annum

The plan was to expand the existing factories and start a new set of Finchaa raised from 80,000 tonnes per annum to 270,000 tonnes

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 Methora raised from 120,000 tonnes per annum to 190,000 In order to actualize the master plan, a budget requirement of $1.3 billion emerged which was sourced through a loan of $640 million from the Indian Government and internal source of $660 million from the completed in the next 3 years! into it having believed in the benefits that are clear. They have not lesson for Nigeria. Conclusion Government of Ethiopia. Today these projects are on course and will be waited for investors but have without fail kept inviting them and giving them the environment to also come in and contribute. This is a great One thing to note is that in each case, government has gone fully Awosh Valley to produce 600,000 tonnes per annum tonnes per annum

Wonji raised from 75,000 tonnes per annum to 350,000 tonnes per annum

20,000 tonnes to about one million tonnes.

attainment of 70% self-sufficiency in local sugar production from The NSDC as a matter of urgency should be able to kick start the

a Nigerian Sugar Master Plan from which a road map was put up for

The Federal Government must be saluted for directing the production of

Creating an Enabling Environment for Sugar Investment in Nigeria By SONG ABUBAKAR AHMED

development of agro-based industries like this one. Thank you!!!

on five sites. From this full feasibility study should be undertaken for three
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sites. The solution to the massive unemployment of professionals lies in the

development process by commissioning the preparation of pre-feasibility study

NSDC SSCL TCD

ABBREVIATIONS NISUCO -

National Sugar Development Council Tonnes of Cane per Day National Sugar Master Plan

NSMP

Nigeria Sugar Company Limited now Josepdam Savannah Sugar Company Limited Numan

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