How private investments can boost Nigeria’s sugar sector

By Miriam Humbe

The National Sugar Development Council (NSDC)’s Master Plan has estimated that Nigeria’s demand for sugar would breach the 1.7 million metric tonnes (MMT) mark by 2020.
In order to satisfy this from domestic production, it is estimated that the nation will need to establish some 28 sugar factories of varying capacities and bring about 250,000 hectares of land into sugarcane cultivation, over the next 10 years, with the bulk of the investment capital expected to come from private investors.
The demand for sugar in Nigeria was estimated to have grown from 442,867 metric tonnes from 1995 to about 1,301,494 metric tonnes in 2005 showing an average annual growth rate of 7% while local production accounted for less than 2%.
Today, demand has risen to about 1.5mmt, but while local production would have stagnated, thanks be to the indigenous private sector producers in that sector, in the likes of Dangote Sugar, BUA Sugar and Dogan’s Sugar among others, who have stepped in to fill the gap. A lot more still needs to be done.
Information obtained from www.nsdcnigeria.org decried the underdeveloped state of the sugar industry and the low local sugar production which has deprived the country of all the benefits derivable from a vibrant sugar sector leaving some unwanted consequences notably, the annual drain on the nation’s foreign exchange earnings, loss of hundreds of thousands of employment opportunities and food insecurity arising from sugar import dependence.
Nigeria has the potentials to become a net exporter of the commodity, if the capacity of the existing sugar plants is enhanced, new plants established and sugarcane out grower farmers encouraged and supported through provision of credit facilities, procurement of necessary inputs and development of basic infrastructure.
The Nigerian sugar industry was first established in the 1960s, but can however be regarded to still be in its infancy given the fact that today, it only supplies about 2% of the nation’s requirement, in spite of the nation’s comparative and competitive advantages for sugar production.
This uninspiring performance has however, deprived the country of all the benefits derivable from a vibrant sugar sector, notably the annual drain on the nation’s foreign exchange earnings put at N101.9 billion in 2011, the loss of hundreds of thousands of employment opportunities for skilled and semi-skilled labour and food insecurity arising from sugar import dependence.
Recall that in 2008, the Federal Government of Nigeria directed the National Sugar Development Council to develop a road map for the attainment of self-sufficiency in sugar within the shortest time possible, necessitating the need for massive investments in the sector.