The Federal Government has unveiled a $7.1bn 10-year investment programme to raise Nigeria’s annual sugar production above two million metric tonnes, save $2.1bn in foreign exchange annually and create 110,000 direct and indirect jobs as part of its ongoing policy reforms in the agricultural sector of the economy.
The implementation of the plan, which is being championed by the National Sugar Development Council (NSDC), involves 10 new sugar estates expected to produce 835,000 metric tonnes yearly at full capacity, and the expansion of existing operators and improved output from established mills.
Specifically, the council stated that the programme was designed to reduce the country’s dependence on imported sugar, with more than 97 per cent of the 1.8 million metric tonnes consumed annually currently refined from imported raw sugar.
Speaking during a presentation of the plan at a briefing on Sunday, with the Commerce and Industry Correspondents Association of Nigeria in Abuja, the Executive Secretary/Chief Executive Officer of the council, Kamar Bakrin, recalled that for many years Nigeria had repeatedly announced sugar production targets without achieving self-sufficiency.
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He clarified: “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.
“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”, the Executive Secretary added.
According to him, the programme will require $5bn in debt financing and $2.1bn in equity contributions from project promoters and operators.
Bakrin explained that the proposed debt financing comprised $3bn from export credit agencies, $1.75bn from development finance institutions and $250m from local development finance institutions.
He expatiated: “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.
“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”, the NSDC boss added.
Barkin further disclosed that the council had signed a $1bn agreement with a Chinese group, Sinomach, for engineering, construction and financing, adding that the funding is expected to flow to the estates for the implementation of the programme once financial close is achieved.
