Nigeria still heavily reliant on sugar imports as production stagnates at 70,000mt against local demand of 1.62 mmt

NIGERIA – Nigeria’s current 10-year Sugar Master Plan (NSMP), launched in 2012 aimed to boost local production of the sweetener and attain self-sufficiency, is set to come to an end soon.

Both public and private sectors players have undertook massive investments within the decade long period, however, the country is still heavily reliant on imports to meet demand.

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According to USDA in a GAIN report, Nigeria’s sugar production in the Marketing Year 2022/23 is forecasted to be flat at 70,000 MT due to the country’s ineffective crushing capacity over the past 12 months.

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 have been channelling money into building new or rehabilitating existing milling facilities to boost production.

However, most of these projects are not yet finalized but are in an advanced stage.

USDA also notes that, sugar companies are also challenged by their inability to access foreign exchange required for importing machinery and equipment.

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Foreign exchange scarcity causes delays in procuring modern machinery – required to increase productivity.

There are also delays in clearing the imported machinery and equipment. These delays significantly disrupt the installation timelines of modern machinery –negatively impacting sugar production targets.

Nigeria’s per capita sugar consumption was around eight kilograms in 2021

On a positive note, Nigeria’s sugar refineries capacity increased from 2.75 million metric tons per annum in 2019 to 3.4 million metric tons per annum in 2020 but operating at less than 70% capacity.

Currently, the country has 210 percent refinery capacity over the annual import quota.

Only two new companies are reported to have entered the sugar sector within the last 2 years i.e., KIA Africa Group and Lee Group.

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KIA Africa Group bought Bacita Sugar Company from Josepdam Nig Limited. Prior to the deal, Bacita was the premier sugar producing company in Nigeria.

On the other hand, the Lee Group – a Hongkong registered company is a green field company operating under Great Northern Nigeria Agribusiness Limited.

Other greenfield sugar projects being developed under the NSMP include the Gagarawa Sugar Project in Gagarawa, Jigawa State, the Contec Global Project in Isanlu Esa, Kogi State, Gummi Sugar Project in Zamfara State, Sean-Zara Sugar Project in Kwara State, Crystal Sugar Project in Jigawa State, Oyo State Sugar Processors Ltd, Iseyin, Oyo State, Goronyo Sugar Project in Goronyo, Sokoto State and Cocaset Sugar, Ondo State.

The upcoming projects serve as an encouragement to meeting the local demand by the industry players as the country’s local production is said to meet on 5% of the demand.

During the period under review, Nigeria’s sugar consumption is expected to marginally rise by 1% to 1.62 million metric tons MMT.

To meet the high demand, the West African nation is expected to import 1.8 million metric tons (MMT) of raw sugar to be refined locally.

As of 2021, Nigeria’s per capita sugar consumption was around eight kilograms, much lower than the global average of roughly 36 kilograms per person.

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