The Federal Government has unveiled a $7.1bn investment programme spanning 10 years to increase Nigeria’s annual sugar production to more than two million metric tonnes, save $2.1bn in foreign exchange annually and generate 110,000 direct and indirect jobs.
The programme, led by the National Sugar Development Council, includes the development of 10 new sugar estates with a combined annual production capacity of 835,000 metric tonnes at full operation. It also provides for the expansion of existing operators and increased output from established sugar mills.
The NSDC said the programme aims to reduce Nigeria’s reliance on imported sugar, noting that more than 97 per cent of the 1.8 million metric tonnes consumed annually is currently produced from imported raw sugar.
Speaking at a press briefing organised by the Commerce and Industry Correspondents Association of Nigeria in Abuja on Sunday, the council’s Executive Secretary and Chief Executive Officer, Kamar Bakrin, said Nigeria had repeatedly set sugar production targets but failed to achieve self-sufficiency.
“We import almost all the sugar we consume. Plants have been launched and relaunched. Targets have come and gone. I did not invite you here to add to that list. The diagnosis is done,” Bakrin said.
He added, “What is different today is that we’re no longer debating why this has been the case, and who is to blame, and what have you.
“There are four, and we have answers to each and every one of why we’re where we are.”
According to the council, the programme will be financed through $5bn in debt and $2.1bn in equity contributions from project promoters and operators.
The proposed debt financing will comprise $3bn from export credit agencies, $1.75bn from development finance institutions and $250m from local development finance institutions.
Bakrin added, “The NSDC’s $7.1bn, 10-year program is Nigeria’s strategy to raise annual sugar production beyond 2 million MT, above current domestic demand of about 1.8 million MT. Built on three interventions (optimising existing estates, expanding incumbent operators, and recruiting new greenfield investors) across 13 projects, it is projected to save about $2.1bn in foreign exchange annually and create 110,000 direct and indirect jobs.”
He said conventional commercial loans were unsuitable for large-scale sugar projects due to their high interest rates and short repayment tenures.
“Commercial loans cannot finance this sugar sector. That one I think we know that as industry correspondents you know that you cannot build an industry on the back of commercial people at 28 per cent, 15 per cent over five years,” he said.
He said the council had entered into a $1bn agreement with Chinese firm Sinomach to provide engineering, construction and financing services, adding that funding would be made available to the estate after the project reaches financial close.
The NSDC is also partnering with the Bank of Industry to establish a N10bn Sugar Projects Acceleration Fund to finance feasibility studies and prepare projects to attract investment.
