Despite backward integration, Nigeria imports N953.9bn raw sugar in 12 months
Despite the Backward Integration to allow development and sourcing of raw sugar in Nigeria, major producers of refined sugar imported 953,971bn worth of raw sugar into the country to be processed for consumers. Analysis of foreign trade statistics produced by the National Bureau of Statistics showed the product was imported from July 2024 to June […]
Despite the Backward Integration to allow development and sourcing of raw sugar in Nigeria, major producers of refined sugar imported 953,971bn worth of raw sugar into the country to be processed for consumers.
Analysis of foreign trade statistics produced by the National Bureau of Statistics showed the product was imported from July 2024 to June 2025.
A breakdown showed that N156.752bn worth of the product was imported in the third quarter of 2024 (July to September) while N332.52tr worth of raw sugar was imported in the fourth quarter of 2024 (October to December).
For the first quarter of 2025 (January to March), N305.73bn of the product was imported and N158.95bn of the product was imported in the second quarter of 2025 (April to June).
Further breakdown showed N952.59bn of the commodity was imported from Brazil while N1.376bn was imported from the Netherlands.
Nigeria’s troubled sugar master plan
The Nigeria Sugar Master Plan (NSMP) was introduced in 2012 for local production of sweetener through sugarcane plantation and has grown steadily and billions of naira have been pumped into its backward integration policy (BIP) programme to establish farmlands that would supply feed for the growing sugar industry.
This has made the sector get billions of naira in annual incentives in the form of tax holidays, crop loans, tariffs, and regulated imports of foreign sugar, among others.
According to the National Sugar Development Council (NSDC), these incentives were planned to grow sufficient sugar to satisfy the local demand and expand it into a foreign exchange earner and harness Nigeria’s sugarcane resources, creating jobs and a ready market through the value chain while bridging the country’s sugar demand at 1.53 million MT in 2020.
Under the initiative, local investors would make sizable investments in the industry within 10 years to guarantee self-sufficiency in the production of the sweetener and domestically produced extracts for their refineries.
Also, operators with backward integration plans were given import quotas to import raw sugar. The policy helped in attracting investments into the industry and has impacted production positively.
Nigeria’s sugar industry has expanded and continues to attract more investments as producers in the sector have vastly invested in cultivating large sugarcane plantations and building mills as stipulated in the policy.
According to the NSDC data, local production increased to 38,597 MT in 2019 from 6,843 MT when the country kick-started the backward integration programme for the sector.
This has allowed big millers such as Golden Sugar Company, BUA and Dangote Sugar to continue making huge investments across the value chains.
According to the United States Department of Agriculture, Foreign Agricultural Services (FAS), Nigeria comes behind South Africa as the second largest market for sugarcane in sub-Saharan Africa while Nigeria produces less than five percent of the total consumed sugar.
Sugar refinery capacity in Nigeria is said to have increased from 2.75 million metric tons per annum in 2019 to 3.4 million metric tons per annum in 2020 but operating at less than 70 percent capacity.
Currently, there are only three players in the industry which are Golden Sugar Company, Dangote Sugar, and BUA.
The second phase of the NSMP to run through 2033 is being implemented where allocation of sugar import quota would be based on the extent of BIP performance in the preceding year, and no longer based on the refining capacity.
While demography and the rise of the food and beverage industry are two major factors driving sugar demand in Nigeria, the country’s sugar consumption is expected to decline this year owing to high import costs and weak consumer spending.
Increasing sugarcane cultivation
Smallholder farmers in major producing states have abandoned growing sugarcane to cultivate other crops of higher demand are now returning to the production of the commodity since the BIP was introduced in the sugarcane value chain.
While there is no recent data to show the marginal rise, the USDA projected the country’s 2024/2025 production output to remain unchanged at 1.7MMT owing to a lack of recent government support to increase local production.
Sugar imports on the rise
Despite increased investments in the sector, sugar imports have continued to make a steady increase.
Sugar is the second most agricultural import in Nigeria in terms of quantity after wheat, according to the Food and Agricultural Organisation.
It has a 2.1 percent ratio of production to demand, according to the Nigeria Sugar Master Plan.
And yearly, millions of dollars amid acute shortage are still spent on importing the sweetener yearly – a narrative BIP is to change.
Africa’s most populous nation still spent a whopping N517.8 billion in 2023 importing sugarcane amid acute FX shortage from N350.8 billion it spent in 2022 importing the commodity, data from Nigeria’s Foreign Trade Report shows.
‘Insecurity, preference for foreign products, others fuelling import’
Speaking with Daily Trust, an economist, Dr. Marcel Okeke, said the insecurity that has engulfed Nigeria is one of the major issues causing more import of raw sugar as farmers can’t have access to their farmlands.
He said the situation is exacerbated with Nigerians having taste for foreign products as well as the lack of infrastructure to make locally-manufactured goods cheaper.
He said, “Don’t you think that the places where sugar is supposed to be cultivated have a serious impact on this insecurity situation? The people who are supposed to be farming sugar, do you think the places are peaceful and the farmers are doing their job? That’s the main issue.
“Then you start talking about the quality of what we get, the raw sugar cane or whatever we get locally versus what is imported because when it comes to local production and import, you can’t compare in terms of quality.
“A lot of people that use sugar are already used to the importation of varieties or quality, so, when they are locally produced, they are likely to still prefer the ones that are imported.
“But the major issue is that of local farmers. Are they settled where they are supposed to be settled to keep cultivating as many of them are dislodged and displaced? So, no matter what you see on paper or what the policy is, they have to settle down in their farms and their villages to continue to produce their sugarcane. If you know the locations, mainly up north, those people are badly affected. That’s the major point.
“The other point is the preference for imported brands or quality of sugar. How do you see the commitment of local producers, manufacturers of this sugar? How do you see their commitment? They’ve been talking about backward integration and that they have integrated even in their plan and so on. How do you see their commitment? Once you are doing any manufacturing here, you are operating in a harsh environment.”
“The environment is harsh because if you look at the infrastructure, for instance, let’s remove the issue of insecurity, which is a major one. Then you come to the infrastructure, you come to light, you come to water, you come to network of routes, how do you distribute what you produce, and so on and so forth.”
“So when you factor all this, and the cost of money, if you want to raise money, because the government is playing very actively in the financial market, always raising money and all that. So they are kind of crowding out many private sector borrowers, and that is why the interest rate is very, very high. So when you look at all this in its totality, it doesn’t encourage any local production here, whether it’s sugar or whatever.”
“So people who do anything here are not competitive. As a matter of fact, they put whatever will be cheaper when you factor in the cost of business here into whatever you are doing.
“Even if you cross a border to Cotonou in Benin Republic, you will see that what you are getting from there is cheaper compared to what you get from local producers here. So what kind of commitment is that? So you can see that what is on paper, in terms of the intention of government by way of policy, is different from the reality.”
He restated that with the level of insecurity there is no way Nigeria can get its agriculture right.
He added, “That is why everything about agriculture is usually manifested whenever the president speaks, whether independence, democracy day or any occasion.
“We just throw figures, throw a number of tractors and many billions spent here and there but what is the impact? Who is on ground to do those things and engage in serious agriculture?”