PROBLEMS AND PROSPECTS OF DEVELOPING THE SUGAR INDUSTRY IN NIGERIA BY SULEIMAN ABDULLAHI

The Industry: The Nigeria Sugar Industry is made up of two major contributions: commercial cane outfits

Production through processing of sugarcane crop grown in existing Production through importation of raw sugar for refining locally at existing refineries in Lagos and Port Harcourt.

Our concern in this discussion is the production through the use of sugarcane as raw material. The first sugar industry established is the Nigerian Sugar Company (NISUCO) which came in to being about 50 years ago. This was followed by the Savannah Sugar Company Numan (SSCL) which came into initial plans and the potentials they have. Sunti has had to operate for the production in 1980. These two (NISUCO and SSCL) are the beginning and end of

plant with a throughput of 100TCD. It is important to mention that SSCL with privatization in 2003, the company is yet to attain a production of 20,000
Problems and Prospects of Developing the Sugar Industry in Niger By ALHAJI SULEIMAN ABDULLAHI

place where up to 20,000 hactares of land is available. Lafiagi with a potential to produce 75,000 tonnes of sugar per annum started operation first by

installed capacity of 50,000 tonnes of sugar per annum and design capacity of capacity. In the last ten 10 years production has been on and off and since

tonnes of sugar per annum.

100,000 tonnes of sugar per annum never produced beyond 40% of its installed

transporting its cane to Bacita for processing and later through the use of a mini

period of over twenty years with a mini plant with a capacity of 250 TCD in a

the development of sugar from commercial cane production in the last 50 years. The others, principally Sunti and Lafiagi, have never taken off considering the

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Nigeria has tremendous potentials for the production of sugar from sugarcane.

POTENTIALS

The present identified sites alone are capable of producing over two million 1.3 million tonnes per annum. The Nigerian Sugar Master Plan has for

tonnes of sugar per annum. This far exceeds the national consumption figure of with the first group being within existing companies where infrastructure for the potentials arising from availability of land, water and favourable climatic reasons for the situation are as follows: not certain if the production of 2% can be sustained. What are the problems militating against the development of the local sugar industries? The main both the field and factory are partially available. It is to be noted that inspite of factors; Nigeria is currently producing only 2% of its annual requirement. It is

convenience of implementation broken the potentials areas into four (4) groups

commensurate duty and levy. The production by these two refineries is more is to be noted that despite this excess production, two 2 more refineries are BUA respectively.

than the national consumption figure by 600,000 tonnes of sugar per annum. It already being erected at Lagos and Port Harcourt by Flour Mills of Nigeria and refining up to four times its consumption, thereby eating deeply into the In addition Dangote refinery at Lagos is being expanded to 600 tonnes of sugar National Foreign Exchange Reserve for unrecorded exports to neighboring

sugar per annum. The raw materials come in without having to pay

at Lagos (Dangote and BUA) together refining about 1.9 million tonnes of raw

1. Sugar Refineries at the Ports: There are currently two (2) sugar refineries

countries. The expected taxes and levies are not paid, but most importantly they scuttle the efforts to local sugar production. It is to be noted that the
Problems and Prospects of Developing the Sugar Industry in Niger By ALHAJI SULEIMAN ABDULLAHI

per day. By the time these new ones and expansion is completed Nigeria may be

owners of all the privatized sugar companies are all sugar importers with three
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yet to be completed. Investors will not wait that long. Acquiring land must be made less painful to investors. are located far away from existing settlements. Besides the development of irrigation infrastructure and erection of factories, roads, bridges, schools, only be provided by Government which most of the time is not done. that required infrastructure is provided by Government.

for the development of sugar estates is very difficult. The NSDC is aware of the time it has taken since Lau was identified for the purpose of starting the Lau Sugar Project. About ten years after commencement to acquire, the process is

Experience in the recent past has shown that to acquire 20 25,000 hactares

of the sugar estate. About the time of establishing SSCL and NISUCO, the going policies of Northern Nigeria made it easy for large hactarages to be acquired.

associated with local sugar production (i.e. employment, power generation, animal feeds, ethanol etc).

2. Acquisition of land: wide expanse of land is required for the development

consumption of other surrounding countries and losing every good thing

remain suffocated until all the foreign reserve is denuded to a point where we

can no longer import. Commensurate taxes are not paid; we are supporting the

the biggest problem local sugar production has to contend with. This

arrangement brought about both by design and neglect; local production will

of them owning refineries that can each meet the National Consumption. This is

3. Infrastructure: Due to the demand of large expanse of land, sugar industries power and housing will be required for the project. These infrastructures can Considering long gestation associated with sugar companies it is only natural of any sort starts trickling in; there has always been the need for sound, have been inconsistent and changed without allowing them to have the consistent and friendly policies for investors to respond positively. Policies
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4. Policy Considerations: The fact that it takes up to five years before revenue

Problems and Prospects of Developing the Sugar Industry in Niger By ALHAJI SULEIMAN ABDULLAHI

industry since the BPE handed over to them as the core investors. The NSDC of government is being abused.

wait and see approach and in the process look for areas where they can hit and run to their best advantage. As can be seen the current core investors in Sunti and Lafiagi have done nothing to show that they are serious in developing the

intended desired effect. This has led to a situation forcing investors to adopt a

and the BPE must have the teeth to bite in a situation where the good intention Nigeria is richly endowed with all that nature can provide for a successful local

PROSPECTS

sugar production. These endowments include water, land and favourable

be considered so as to enhance the future: (a)

and to save Nigeria from sugar disaster in the future the following will need to Lafiagi and Nisuco will need to be looked into by the NSDC so that a ensure that the companies do not seize to exist. At the moment the

climatic conditions. The NSDC and its management who are the custodian of the Sugar Master Plan have a role to play if the observed prospects can be used to the National advantage. To be able to realize the objectives of the master plan

Privatized Sugar Companies: The privatized companies- SSCL, Sunti, known programme of activity will be drawn up and complied with to owners of the privatized Sunti and Lafiagi Sugar Companies have not

done much to show that they are serious about bringing up the

companies. In the case of SSCL it is on a downward trend because of security interest. (to a large extent) incompetence of its management NSDC and BPE

must show interest in what is going on as the successful operation of

these companies is not only of economic interest to Nigeria but also of

Problems and Prospects of Developing the Sugar Industry in Niger By ALHAJI SULEIMAN ABDULLAHI

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(b)

are making, that there will continue to be pressure for approving new ones. It has been indicated in the sugar master plan that the only way to provide jobs for our populace is to go seriously into local sugar Refineries should not be allowed to refine beyond the countries Assistants) than to any other reason. large extent due to unemployment and under employment (Special

refineries and ensure appropriate taxes and levies are paid for the

raw sugar imported. It is very clear from the profits these refineries

Government should stop approving the erection of new sugar

production. The increasing waves of unrest all over the country is to a

(c)

consumption needs. Our consumption is about 1.3 million tonnes while the two refineries are now refining 1.9 million tonnes per tonnes?

(d)

any production to report in the last 3 years. The company is also declining at a fast rate and unless some serious measures are taken by Dangote Industries, NSDC and BPE, it is likely to collapse in the no distant future.

Unless action is taken and policies are made to be complied with, the prospect of developing the Nigerian sugar industry are bleak. For nearly fifty years we

are still producing less than 2% of our consumption. It is only SSCL that has had The attitude of government in guiding local sugar production leaves much

production on a prorata basis.

consumption should be imported by these involved in local

annum. Where does it go to? Who account for the additional0.6million In years to come, the shortfall in sugar between local production and

investing today and reaping tomorrow. It is very clear that even the ones
Problems and Prospects of Developing the Sugar Industry in Niger By ALHAJI SULEIMAN ABDULLAHI

stride in developing its sugar sector. Experience over the years has shown that our local investors are unlikely to invest in sugar since most of them prefer
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to be desired. Countries like Sudan that have strict regulations are making great

privatized to them are deteriorating instead of improving. The NSDC must flex its muscles on this if we are not going to end up with no functional sugar industry in the next two years.

the moment. It is pertinent to note that the success in Sudan is not through private sector investment but through participation by government in the

very poor, but can be salvaged through more authoritative involvement by the NSDC. GOVERNMENT may have to be much more involved than it is doing at achieved by the year 2020, you dont need to be told that we have refused to recognize our present position and are not serious about our future. Or else, how do you explain a situation where it has taken us 50 years to erect two discussion for over two years now!!! factories with a total throughput of 8000TCD and sugar output of less than God save Nigeria!!!

I still maintain that the prospects of developing in local sugar industry is

development of the industry. Looking into what government is claiming will be

100,000 tonnes per annum to say that we shall produce 1.2 million tonnes of I thank you for your attention

sugar in 8 years from now. The Nigerian Sugar Master Plan (NSMP) has been in

ABBREVIATIONS NISUCO SSCL TCD -

NSDC

NSMP

Nigeria Sugar Company Limited now Josepdam Savannah Sugar Company Limited Numan Tonnes of Cane per Day National Sugar Master Plan

National Sugar Development Council

Problems and Prospects of Developing the Sugar Industry in Niger By ALHAJI SULEIMAN ABDULLAHI

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