Nigeria may produce 1.7m tonnes of sugar by 2023 —Sugar Council boss

20.02.2017

In its quest to reduce unbridled importation and encourage local production with its attendant benefits, Nigeria launched the National Sugar Master Plan in 2013. Part of the goal is to increase local production and generate at least 117,000 jobs. Already in its fourth year, Nigeria is producing 30,000 tonnes with prospect of going to 200,000 tonnes in four years with current efforts. Acting Executive Secretary, Nigeria Sugar Council, Mr Samuel Kwabe spoke with SANYA ADEJOKUN and SANYOOL TYASVUAL on trends of activities in the sugar sector.

What has the council done in the last few years that should make unemployed Nigerians happy that something is coming?

As you rightly say as a preamble to this discussion that many people don’t know about what certain government agencies like the council is doing, perhaps this interview with the Nigeria Tribune will go a long way in educating such people that do not know much about us.

The Sugar Council was established in 1993, which is about 23 to 24 years now so it not a new organization. Since its establishment, the council has been in the forefront of promoting the development of the local sugar industry; that was the main purpose for which it was established in the first place. As we all know, we have all it takes to make sugar locally and yet, the bulk of our sugar is imported.

The council was established to promote the local development of the sugar industry, which if properly managed is one of the industries that can generate huge employment because that is the core of your question.

Since inception up to 2012/2013 the Sugar Council has been implementing its objectives without any sound policy framework but by 2012 invoked a Master Plan to take the unbridled importation of raw sugar. The master plan is a strategic road map that if diligently implemented, will take Nigerians to the promise land in terms of local sugar production.  The government of President Umaru Musa Yar’adua then directed that we should evolve the master plan. That directive gave birth to the Nigerian Sugar Master Plan (NSMP), the implementation started in 2013. The master plan is a 10-year document that will lapse in 2023 and if carefully implemented at the end of the planned period, the sugar industry is expected to have generated about 117,000 jobs both permanent, residual and seasonal. You can see that it has huge potentials for creation of jobs.

So where are we now with the implementation of that master plan, which commenced in 2013, this is 2017, where are we? Can we measure where we are?

Of course, there is nothing that cannot be measured. We are in the fourth year of implementation. By the nature, the sugar industry is a capital intensive industry, is a long gestation industry, it takes many years of confession to implementation, that is from the beginning where you locate sugar estate, you install your mill, to the time that you expand your mill, to the time you test run and commission it to the time that you start the real sugar production takes a minimum of four to five years. So if for instance since the inception of the Master Plan in 2013, the first industry started, we are now in the fourth year that the industry started in 2013, it is probably this year or next year that it will be commissioned and go into production because of the nature of the industry. Before the implementation of the master plan, there were sugar industries, I am sure you know that. The first sugar factory is the Nigeria Sugar Industry. Those sugar industries as of 2013 were not in production, so we were at zero level.

Since the BIP was signed, appreciable progress has been made because Dangote bought the Savannah sugar that was not producing but now the mill is producing, the Golden Sugar bought Sunti and they built a new plant at Sunti. The plant was test run last year and hopefully they will go into production this year. The Bua Lafiaji Sugar Project, had an initial problem over land but that has just been resolved. So far, they have been able to achieve about 400 to 500 hectares of land. They have already finished negotiation on the land dispute and installation of their mill at Lafiaji.

Apart from these, there are other investor that have approached us, we have the Lead Group in Kano, they are going into sugar production in Jigawa State, as we speak, they are paying compensation to land owners that they have acquired their land. Two investors have also approached us from Edo State and by the special grace of God, some of my officers will be travelling there by next week to see their site with a view to advice everybody on how to go about the establishment of their sugar factory. Apart from these ones, there are other smaller sugar plants coming up.

There are also investors that have indicated interest in establishing smaller plants in Kwara State, there is another one in Shaki also in Oyo State. The big players like Dangote, apart from the BIP, have also acquired another site in Taraba State, in a place called Numan.

On the contrary, I think the journey has been remarkable especially since 2013 because if the foundation is not properly laid, we will not have a solid superstructure. However, how much are you empowered to achieve the goals?

I think we are fortunate in the sense that the government is 100 percent behind us. We have been empowered; you know we get our funding from the Sugar Levy under the law establishing us. The law made provision for the importers of raw sugar to pay certain amount of money, or levy to the Central Bank to further develop the local sugar industry. So the Sugar Levy is actually paid to pave way for the development of the local sugar industry. In terms of funding, I can say that government has been magnanimous to us and right financial backing has actually been provided. We have been getting support from our parent ministry. Like I mentioned from the beginning, it was the Yar’ Adua government that was instrumental to the establishment of National Sugar Master Plan, and this tells you that government has been in support of what we have been doing at the Council.

 Can you tell us how much is in the sugar fund right now?

I cannot tell you because I don’t have the information. The Sugar Fund goes into a dedicated account in Central Bank and that account is not our account per say, so we don’t have direct access. Only the Central Bank can give you accurate information.

About three weeks ago, the Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah said that there is a plan for the country to be produce 200, 000 tonnes of sugar per annum but that looks insufficient considering that the country is consuming 1.6 million tonnes in a year. What is the council doing to cut the importation to at least half that figure?

As we started off, everything that we do is just to provide the foundation, presently the country consumes between 1.3 and 1.5 million tonnes of sugar in a year. You made reference to the Minister who said the country will be producing 200, 000 tonnes of sugar in a year, if the BIP is properly implemented, the country will be producing over 1.7 million tonnes of sugar per annum. Right now the country’s local production is over 30, 000 tonnes and that is just from one sugar factory, the i Golden Sugar Estate, Sunti, Niger State. The Sunti project is expected to go into production by the end of the year or early next year. Once that happens, there will be additional 60, 000 tonnes and with the expansion programme of Dangote, we are hoping they will double what they produce this year. In probably three to four years from now we should be talking of about the 200, 000 tonnes you are talking about.

 Although it is difficult to plant sugar cane very far from where the factories are, but there should be a way out because, there are locations suitable for sugarcane that are not close to the sugar plants. Is it possible for the Council for instance to help farmers acquire crushing machines such that they can then extract the juice and transport to factories without necessary carrying taking the sugar cane?

The simple answer is no, when you say that farmers can grow sugar cane far away from the factories and crush, what will they use in crushing? You can now empower some people to get those kind of machines.That is what I mentioned earlier. In such a situation, we encourage the formation of cooperative society, where they can pull resources together and establish small plants. They can produce raw sugar and they will now sell to the mills. I earlier mentioned that a smaller plant is right now being established at Iseyin, that small plant will be servicing a cooperative of about 500 farmers. The small plant is being promoted by those cooperative farmers. Smaller plants can also produce sugar, raw sugar or brown sugar. If they want, they can send it to the refinery. Another one is coming up at Goronyo in Sokoto State. We presently have been approached by many cooperative unions but are advising them to let us wait and see how the Iseyin project will turn out first because it is the closest to producing sugar. They are presently importing their mill, the bunk of which has already arrived.

So, to some extent, what you are suggesting can be done and then, the general sugar master plan talks about the out grower estate. Going by the master plan, sugar estates are meant to source for their feeds from out grower farmers and it stipulates that about 50 per cent of what the sugar industry needs should come from out growers and this is what we have started promoting. Out growers are individual farmers who have been empowered to grow sugarcane, and then sell it to the mill as off-takers, they will mill it and pay the farmers. The sugar industry is such that we encourage the growing of sugarcane around the mill because the transportation from harvesting of the sugarcane to transporting to the mills should not take too much time because it will affect the sucrose content.

What are you doing in terms of research and development? Is there a way the Council funds farmers, research and development activities in the industry or how do spend your money?

We don’t fund famers per see but if you are talking about R and D, we have been promoting R and D in collaborating with research institutes. We have had very good relationship with the University of Ilorin Sugar Research Institute, the Institute of Agricultural Science at the ABU Zaria, these are the research institutes that we have been collaborating with. We assist them with funding mainly in the aspect of sugar to sugarcane value chain. We don’t take part in research ourselves because the research institutes are capable enough, they have the manpower to conduct research which the farmers can benefit from millers can also benefit from them. It may interest you to know that we have established a sugar bio-factory at the Institute of Agricultural Research, Zaria and we are presently in the process of establishing one at the University of Ilorin Sugar Research Institute. These factories can help to solve our sugarcane problem in Nigeria.

What are the type of incentives given to the investors?

As I said, whenever an investor approaches us, we will go and see their site, do preliminary study on their site, determining the size of their land. If we establish the viability of the site, we will now sponsor feasibility studies at our own expense, we will pay for it. Government is collecting zero percent on import of sugar machinery, on machineries to develop sugar feeds, on mills, zero percent duty on importing all sugar needs, which is an incentive. Government is also ready to assist them on infrastructural development in terms of investment in irrigation infrastructure. If you know the Savannah Sugar in Taraba, they are getting their water from a dam owned by the Federal Government, at least the trouble of building a dam is off them. We have also established trust fund, one with Bank of Industry and another with Bank of Agriculture. Investors can access the funds even though the funds just gradually building up but at end of the day, even the big players will be able to access the funds.

Before you go, can we know how much the funds are presently worth?

As I said, we are building it up, but I can assure you that the Iseyin small sugar plant that we talked about accessed over N500 million from the fund domiciled in Bank of Agriculture. We are gradually building up with the intention that at the end of the day, even big investors can access funds there. And the idea is that, whatever amount we put in the funds, Bank of Agriculture and Bank of Industry will match it up with similar amount, so it is kind of managed jointly by us and them.


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