How the sugar sub-sector can be sweet again

Although agriculture contributes over 40% of the GDP, its full potentials for wealth creation, employment generation and rural industrial transformation have been limited by the export of primary agricultural products to the detriment of the economy. Furthermore, extensive mechanization and large scale agriculture have been lacking. The obvious consequence has been that Nigeria is a […]

Although agriculture contributes over 40% of the GDP, its full potentials for wealth creation, employment generation and rural industrial transformation have been limited by the export of primary agricultural products to the detriment of the economy. Furthermore, extensive mechanization and large scale agriculture have been lacking. The obvious consequence has been that Nigeria is a net importer of some agro-based commodities like rice, sugar and palm oil all of which can be produced sufficiently for domestic consumption and for export.
In a bid to reverse this ugly status, the Federal Government is pursuing a radical transformation agenda with innovative policies and programmes to attain rapid food security and generate employment with the creation of modern agro-based industries. The Federal Government has identified three crops as very critical to its policy on strategic food security. The crops are rice, wheat and sugar. The importation of these three commodities has constituted a drain on Nigeria’s foreign exchange.
While the cassava inclusion policy will address the dependence on imported wheat which incidentally has limited climatic prospects for cultivation in Nigeria, rice and sugar do not have agronomic limitations. Sugar production, for instance, started shortly after independence, but the sector is still largely under-developed, contributes less than three percent of national sugar requirements despite the available human, land and climatic potentials for the commodity. This dismal performance has deprived the country of the huge social and economic benefits derivable from a vibrant sugar industry. Most worrisome is the huge number of employment opportunities that the nation has lost due to poor development of the agribusiness sector. This situation is about to change with the approval of a Nigerian Sugar Master Plan (NSMP).
The Nigerian Sugar Company Bacita, Kwara State, was incorporated in 1961. Production began in 1964 at the first integrated sugar factory in Nigeria.  The company attained peak production of 35,000MT in 1973. Unfortunately, production began to decline in the 1980s due to administrative and funding challenges. The second integrated sugar estate, Savannah Sugar Company, Numan, Adamawa State, started production in 1980 with an installed capacity of 50,000MT. It attained 23,000MT in 1991 before it was plagued by poor management, inadequate funding and crippling debt. By the late 1990s, the Federal Government had decided to privatize the two pioneer sugar estates and both were eventually sold to private investors by the Obasanjo Administration.
There were other attempts by the Federal Government to establish new estates at Sunti and Lafiagi. Both projects did not reach full implementation.
Similarly, the 1500MT sugar factory initiated by the Jigawa State Government in 2005 was not completed. However, many mini sugar plants with capacities ranging from 10–25tons established by both private investors and some state governments exist but their combined output have remained insignificant owing to national demand, besides the fact that most are also not in operation.
Records show that sugar consumption in Nigeria was 43,000MT in 1955. It rose to 450,000MT in 1974. In 1982, demand had jumped to one million MT of which the country produced only about 40,000MT. Current production data shows that Nigeria produces 30,000MT of the 1.4MT (2012) national requirement. The implication is that Nigeria depends on imported raw and refined sugar to meet its demand in spite of the fact that the nation has the reservoir of land, water and human resources to produce enough sugar for national demand and export to earn foreign exchange.
In realisation of the above, the Federal Government directed the National Sugar Development Council (NSDC) to develop a road map for the attainment of self-sufficiency in sugar production. The Nigerian Sugar Master Plan (NSMP) was the outcome of the work done by consultants commissioned by the NSDC.
The NSMP is fashioned to make Nigerian sugar Industry a world-class, multi-product sugarcane industry. It is designed to re-invigorate the industry in consonance with the Federal Government’s Transformation Agenda of making Nigeria one of the top 20 economies by 2020. In September, 2012, shortly after the Federal Executive Council approved the NSMP, the Honourable Minister of Trade and Investment, Dr Olusegun Aganga had promised that government will create a robust policy environment to drive the implementation of the Plan which is packaged to make Nigeria a major player in global sugar trade.
The Executive Secretary NSDC, Dr. Latif D Busari, has advocated that Adamawa and Taraba States be designated the Sugar Belt in Nigeria, in recognition of their rich potentials for sugar production. His position is no doubt based on the richness of the massive land stretching from Guyuk to Mayo Inne in Adamawa State and Lau and Tau in Taraba State. Reports indicated that the Management of the Sugar Council has visited and was warmly received by the Executive Governor of Adamawa State, Admiral Murtala Nyako, who pledged to embrace the Sugar Master Plan and cooperate with the Federal Government towards realising its objectives.
The Sugar Council has also staged regional sugar forums in the geo-political zones to propagate the Sugar Master Plan and advertise the investment opportunities which abound in the sugar industry. At the various sessions, the Executive Secretary has reiterated the intention of the Council to support and encourage commercial sugarcane farmers at the catchment areas of existing and new sugar factories with inputs for sugarcane cultivation.
Another critical aspect in ensuring success of the Sugar Master Plan is access to funding facilities. The Plan has provisions for utilization of the Sugar Levy Fund whose portfolio will be deployed under several schemes to meet the needs of the sugar industry. For example, The Sugar Council will collaborate with the Bank of Industry and Bank of Agriculture to provide matching grants to investors and farmers.
Some Commercial Banks will be invited to support Outgrower farmers who constitute the major workforce in sugar production. Research institutes will also be funded from the Sugar Levy Fund while the Central Bank of Nigeria, in line with its mandate, is expected to support the cultivation of sugarcane through the necessary intervention packages. This is imperative to drive down interest rates and ensure the farmers reap reasonable profits from their production efforts. Attaining local self-sufficiency in sugar production is possible if we are consistent and diligent in implementing the sugar road map.
Kareem is a public policy analyst in Abuja