NSDC: Nigeria Requires $5bn Investment to Achieve Self-sufficiency in Sugar

Sunday Ehigiator

The Executive Secretary of the National Sugar Development Council (NSDC) of Nigeria, Mr Kamar Bakrin has stated that Nigeria requires $5 billion investment in the sugar sector to achieve self-sufficiency.

Also, he revealed that Nigeria produces a total of 48,000 metric tonnes of sugar annually and consumes about 1.8 million metric tonnes, representing a shortfall of about 1.75 million metric tonnes.

Bakrin kicked against the imposition of a sugar tax in the country, stating that Nigeria has no excess sugar consumption problem as it only consumes 9kg per capita sugar annually, nevertheless, it’s a large population.

Speaking at a one-day media interactive session in Lagos, Bakrin said, Nigeria’s sugar industry is a $2 billion local production market, which is still growing, and will require a $5 billion investment if it must expand to its full capacity.

According to him, “The biggest producer of sugar around the world, by far the number one producer of sugar in the world, is Brazil with 41 million metric tons, followed by India and Thailand with 36 million and 14 million metric tons respectively. In Africa, Egypt leads with 2.8 metric tons, followed by South Africa and Eswatini with 2.4 million and 0.78 million metric tons respectively.

“In terms of exportation, Brazil leads the world with 29.2 million metric tons, followed by Thailand with 8.2 million metric tons and India with 7 million metric tons; while in Africa, South Africa leads with 0.7 million, followed by Mauritius, and Eswatini, with 0.6 million metric tons respectively.

“In terms of global consumption, India leads with 29.5 million annual consumption which represents 19.38 per capita sugar consumption, followed by the EU (European Union) with 17 million and China with 15.5 million metric tons, which represents 7.30kg per capita sugar consumption.”

He added, “In Africa, the largest consumer is Egypt, with about 2.68 million annual consumption, representing 26.27kg per capita consumption, followed by Nigeria with 1.8 million, representing 9kg per capita sugar consumption, and South Africa, with 1.7 million, representing 29.98kg per capita sugar consumption. You begin to understand the reason for this when you realise that a lot of sugar is consumed in industry. So there’s a correlation between the sort of industrial development of the nation and the per capita consumption.

“So it’s not just about whether people have a sweet tooth or not, it’s more about how much industrial activity is going on, and therefore how much sugar ends up in products. Sugar creates livelihoods for about 100 million people across the world. So it’s a very strategic product in terms of economic development.

“Also, because sugar cane, of course, is grown on farms in rural areas, what it does is that it drives a lot of rural development via its very nature because sugar is typically produced in large sugar estates in remote areas.

“And of course, to get there, you have to build roads, you have to build all sorts of things, you have to build clinics, you have to build schools, and you have to build all matters of things in the rural area to service it. So it pulls in infrastructure, I mean, rural development by its very nature. The question then is, why does Nigeria under-produce and rely heavily on importation when we can even be a major exporter of sugar?”

Sugar factory capacity, he stated, is measured in tons per day adding that Nigeria currently have about 17,300 tons per day factory capacity installed in the country.

“But we have a refinery capacity, which is to refine brown sugar, which we currently import, 3.7 million. So it’s more than enough in terms of being able to refine the sugar that we consume in Nigeria. So we do have excess refining capacity.

“Nigeria has massive potential to become a serious player in the global sugar equation because the geography favours us. Nigeria needs just about 250,000 hectares of land to produce all the sugar it needs to consume. We are currently farming on just 14,000 hectares. We need about 250,000 to be self-sufficient in sugar production. If we’re aggressive with our agronomic practices, we can do it on 200,000 hectares.

“There are at least 800,000 hectares of land that are deemed suitable for sugar production. So we don’t have constraints in terms of land. So we are well positioned, unlike some countries that have fairly significant constraints, but are still doing wonders there. How do we then reposition the sector? We sat down and ran the numbers in detail. The sector requires about $5 billion. There’s no $5 billion anywhere in Nigeria available for anything.

“The money has to be long-term, it has to be cheap, and it has to be five billion dollars. You can’t do it with $200 million; you can’t do it with $1 billion. If we want to achieve self-sufficiency, $5 billion is to be invested in the Nigerian sugar sector,” he said.

“And it has to be long-term money; because it takes four years from the day you enter virgin land to produce your first bag of sugar. It takes four years at a very aggressive rate of development. So you need money that can wait four years, and then maybe another two years for you to achieve a steady state.

“So you need development finance. We have kick-started that process of finding this quantum of money, of this kind of turnover and cost that can deliver this. Of course, to be able to support the sector’s capacity, both in terms of manpower and know-how and so on, we are massively revamping the Nigerian sugar institute,” he stated.

Speaking on the sugar tax, Bakrin said, “We sit on the other side of the debate on the sugar tax. We don’t want it because we don’t believe that sugar is the problem in Nigeria.

“I mean, look at our per capita sugar consumption. A sugar tax is imposed when you feel that there is excessive per capita sugar consumption. But look at the statistics as I mentioned earlier, we consume 9 kg per capita sugar. I mean, Egypt is at like 20-something. So, does it sound like we have a problem with excessive sugar consumption in Nigeria? No, we don’t.

“Sometimes this is what happens; people show up, fund NGOs with very dodgy agendas and what have you, show up and start making a lot of noise. And because there is no proper understanding of the issues, people jump on the bandwagon.”