Nigeria spent N217 billion on the importation of sugar in 2016 despite the federal government’s plan to produce 200,000 metric tonnes of sugar yearly. The government had promised to reduce sugar import by 1.6 million tonnes but media reports have it that the country has been producing only 70,000 tonnes, far off its target because of poor infrastructure and high cost of manufacturing refined sugar.
Findings revealed that between April and June this year, about 1.3m tonnes of sugar worth N190.3bn ($501m) were imported from Brazil. At present, sugar consumption is said to have grown by 27 per cent to hit 1.7m tonnes. In 2014, the federal government promised to develop a National Sugar Master Plan (NSMP) that would boost the production of the commodity for 10 years through a backward integration policy to achieve self-sufficiency and eliminate the huge foreign exchange spent yearly on its import. But the National Sugar Development Council (NSDC) disclosed that the country would still have to depend on refined imported raw brown sugar from Brazil worth over $500m yearly till 2020. According to the NSDC, the country needs $1.238bn to meet 49 per cent of the total sugar demand by 2020, adding that the federal government had stirred $3bn investments since the implementation of the NSMP. But all that may soon change with the bold implementation of the Dangote Group’s plan for self-sufficiency in sugar production.
Last week in Minna, the Niger State capital, Dangote’s Sugar Refinery Plc sealed a massive sugar deal with the Niger State government through a Memorandum of Understanding (MoU) worth N166bn ($45bn). The deal involves establishment of a fully integrated sugar complex that will generate over 15,000 jobs in the state and boost its economy. The pact will see the company producing raw sugar cane on 16,000 hectares of land at the Lavun Local Government through an out-grower scheme.
The President of the Dangote Group, Aliko Dangote, said his investment was informed by his company’s firm belief in the potentials of the Nigerian economy, adding that the new outlay would add value and create jobs for Nigerians. Dangote said, “The Dangote Integrated Sugar Project in Niger State will also include the establishment of integrated sugar mills, generate power, and produce molasses, ethanol fuel, biomass and animal feeds.” The Group Managing Director of Dangote Sugar Plc, Engr. Abdullahi Sule stated that the MoU would be a game changer for the Niger State economy and Nigeria as a whole.
Sule said the mills would have the capacity to produce 160,000mt of raw sugar, saying the Group hasbbeen in the forefront of support for government’s industrialization programmes through its backward integration policy in agriculture. According to him, the Dangote Sugar Refinery was developing a sugar backward integration plan through the production of 1.5mt/pa in 10 years in Nasarawa, Adamawa, Kogi, Kwara, Taraba and Niger states.
The Dangote Group had moved into the sugar business in 1981. It then injected over N38bn into the Savannah Sugar Company Limited it acquired from the federal government in 2003. Savannah Sugar, this year alone, has produced 20,000mt of raw sugar from its plantation.
This step will move Dangote Sugar from a port-based to refining to fully integrated sugar production within Nigeria, thereby helping the country to archieve self-sufficiency in sugar production and create over 100,000 new employment opportunities.
In addition to what was done in Niger State, the Group had acquired some other integrated sites in locations close to suitable land with good irrigation, and its key markets have begun the engagement of the required technical competence for its projects.
In the first half of this year, Savannah Sugar factory produced and sold 15,805mt and 9,561mt of refined sugar from cane sugar, which contributed 4.3 per cent and 2.7 per cent to aggregate sales and production volumes respectively during the year.
Dangote Sugar plans to rehabilitate the Savannah Sugar refinery and expand it’s annual installed capacity to 100,000mt from its current capacity of 50,000mt, while land development is ongoing in Taraba State. The intention is to complete capacity expansion in Savannah in the next 15 months, and management is confident that production can ramp up, having expanded its acreage area and harvested sufficient cane sugar for production.
It is expected that by the end of the 10-year plan period, Nigeria would have built up the industrial capacity required to, among other benefits, produce about 1.79m metric tonnes of sugar and 161.2 litres of ethanol. It will also substantially reduce importation of sugar to conserve the huge foreign exchange spent on imports annually, generate about 411mw of electricity and create about 117,000 jobs.