New Telegraph

February 23, 2024

FG plans to save N2.8trn on sugar imports in 10 years

After the failure of its first phase master plan, the Federal Government has conceived another phase of the National Sugar Master Plan (NSMP) to save N2.8trillion ($3.5billion) sugar importation in another 10 years.

The first phase was introduced between 2013 and 2022 but it failed to yield the desired result as sugar production was below capacity target, while importation was on the increase after investing N250 billion through Federal Government’s Backward Integration Programme (BIP).

 

Data obtained from National Sugar Development Council (NSDC) revealed that the country imported 12.3million tonnes of sugar between 2012 and 2020, while production stood at 122,959 tonnes or 1per cent in the same period. During the period, the council’s data revealed that 12.5million tonnes of sugar were consumed.

However, in the new phase, government assured that the 10-year plan target would save $350million annually and create 110,000 jobs.

 

Apart from the forex savings and job creation targets in the second phase of the master plan, the Minister of Industry, Trade and Investment, Otunba Niyi Adebayo, said that the country would save $65.8million on ethanol import and generate 400 megawatts of electricity.

He explained: “Today my ministry brought a memo seeking Council’s approval for the second phase of the National Sugar Masterplan. In 2012, the first phase of the sugar master plan was approved, lasting from 2012 to 2022. “Today, the Federal Executive Council approved the extension from 2023 to 2033.

That’s for another 10 years and the whole idea of the sugar master plan is for the development of the sugar industry for self-sufficiency in sugar production.”

It would be recalled that in its first phase, part of the incentives to boost domestic production of sugar include a five-year tax relief for investors in the value chain; 10 per cent import duty and 50 per cent levy on imported raw sugar; 20 per cent duty and 60 per cent levy for imported refined sugar.

Between 2016 and 2020, NSDC, through the National Sugar Master Plan (NSMP), introduced a 10 per cent duty and additional 80 per cent levy for raw sugar; 20 per cent duty and 85 per cent levy for refine sugar imports.

 

Also in 2019 and 2020, refined sugar attracted 10 per cent duty, 30 per cent levy raw sugar imports. Also, it was revealed that the NSDC Act was further amended in June 2015 to further support the NSMP as funding remains inadequate to support the development of Nigeria’s sugar industry, while domestic production failed to keep pace with the rising demand despite the incentives offered by the government to boost local production.

In 2021, following high demand for industrial and domestic use of the commodity, Dangote Sugar, BUA, and some firms imported $889.74 million raw sugar from Brazil, while other countries supplied $97.38 million of the commodity after the country’s projection to meet 800,000 tonnes target of sugar production failed this  year.

 

Brazil alone, accounted for 84.4 per cent or N351.4billion ($702.8 million) of the N417.1billion ($834.2 million) total raw sugar supply to the country in 2021. Also, China struggled to grab 4.5 per cent or $37.2 million of the total supply to Nigerian market within the period.

According to Trade Data Monitor (TDM) data, Brazil’s cumulative raw sugar export to Nigeria in 2020/21 season was 1.62 million tonnes, while domestic cane sugar production slumped from 75,000 tonnes to 70,000 tonnes within one year.

Despite the huge expenditure on the commodity, the Executive Secretary of National Sugar Development Council (NSDC), Mr Zacch Adedeji, explained that Nigeria was recording steady progress in the implementation of its sugar policy.

Under the BIP programme, the existing industry players are Dangote Group, BUA Group and Flour Mills.

 

According to Adedeji, seven years into the policy, more investors had expressed willingness to commit more resources into the sector, noting that a new investor, KIA Group Africa, had completed the process of acquiring the defunct Nigeria Sugar Company (NISUCO) in Bacita, Kwara State and had since commenced work.

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