NIGERIA – The Central Bank of Nigeria (CBN) has restricted importation of sugar into the country to be only undertaken by the three major industry players i.e., Dangote Sugar Refinery Plc, Golden Sugar Company owned by Flour Mills of Nigeria Plc, and BUA Sugar Refinery Limited.

The Apex bank in a circular titled: “Sugar Importation in Nigeria,” signed by the Director, Trade and Exchange Department, CBN, Dr. Ozoemena Nnaji, hinged its reason for selecting the aforementioned sugar manufacturers on the fact that they had made reasonable progress in achieving backward integration in the sector.

“The Federal Government of Nigeria under the National Sugar Development Council established the Nigerian Sugar Master Plan to encourage and incentive sugar refining companies in their Backward Integration Programme (BIP) for local sugar production.

“Accordingly, the underlisted three companies, who have made reasonable progress in achieving backward integration in the sector, shall only be allowed to import sugar into the country,” it explained.

In view of the foregoing, the central bank stressed that authorised dealers shall not open Form ‘M’ or, access foreign exchange in the Nigerian foreign exchange market for any company, including the three listed above for the importation of sugar, without its prior or express approval.

It reiterated that it is charged with the mandate of monitoring the implementation of the backward integration programmes of all the companies in the sector.

“The underlisted three companies, who have made reasonable progress in achieving backward integration in the sector, shall only be allowed to import sugar into the country.”

Central Bank of Nigeria

The National Sugar Master Plan (NSMP) introduced in 2012 was designed to attract over US$1 billion annually in local and foreign direct investments and create an estimated 107,000 jobs over the first ten-year period.

Its aim is to raise local production of sugar to enable the country attain self-sufficiency; stem the tide of unbridled importation; create huge number of job opportunities and to contribute to the production of ethanol and generation of electricity.

Therefore, in order to achieve this, it estimated that the country would need to establish some 28 sugar factories of varying capacities and bring about 250,000 hectares of land into sugarcane cultivation.

The bulk of this investment is expected to come from private investors and mandates sugar companies to invest in sugar farming and increasingly use locally produced extracts for their refineries. 

Investment plans by giant sugar millers

To this end, BUA Group, has invested over US$ 300 million in Lafiagi Sugar Company (LASUCO) in Kwara State, which is in an advanced stage to completion.

LASUCO, a first of its kind in Nigeria, is an integrated milling factory that will comprise of a 20,000-ha sugar plantation, a 10,000tcd sugar mill, a 220,000mtpa sugar refinery, 20,000,000litres per annum ethanol plant, and a 35-megawatt power plant that will be integrated into the national grid.

Meanwhile, Dangote Sugar Refinery has committed over US$700m to its sugar projects to support the Backward Integration Policy.

The company has commenced the rehabilitation and expansion of the Savannah Sugar Company Limited Sugar Factory at Numan, with a key focus to increase production capacity by 6,000 tons of cane per day (TCD).

Dangote has also noted that Sugarcane planting has commenced in two other BIP locations i.e. Tau Sugar Project in Taraba State and Tunga Sugar Project in Nasarawa State.

The integrated sugar complex to be located in Tunga, Awe Local Government Area of Nasarawa state, comprises an initial 60,000ha sugar plantation and two sugar factories with the capacity to produce 430,000tpa of refined white sugar.

Flour Mills of Nigeria Plc (FMN), recently acquired 20,450 hectares of land in Nasarawa State, an addition to the 5,200 hectares of land in Sunti Golden Sugar Estates, bringing the total land size of its sugar milling subsidiary, Sunti Golden Sugar Estate to 22,000 hectares, with about 15,000 hectares under cane.

The total projected cost of the company’s recent expansion drive is projected at about US$300 million, which includes the land acquisitions at both states and the construction of a new sugar mill at Nasarawa.

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