Welcome, Guest: Join Nairaland / LOGIN! / Trending / Recent / New
Stats: 2,660,142 members, 6,246,109 topics. Date: Saturday, 17 April 2021 at 07:07 AM

Who Is Sabotaging Nigerian Sugar Master Plan? - Business - Nairaland

Nairaland Forum / Nairaland / General / Business / Who Is Sabotaging Nigerian Sugar Master Plan? (10752 Views)

Nigerian Customs Sabotaging Igbo Businesses - Ohanaeze Youths / Nigerian Sugar Industry : Local Consumption Continues To Outweigh Production / Fashola Lambasts Power Firms For Sabotaging Economy (2) (3) (4)

(1) (2) (Reply) (Go Down)

Who Is Sabotaging Nigerian Sugar Master Plan? by AnonPoet: 3:30pm On Apr 08
In 2008, BUA Group acquired Lafiagi Sugar Company from the federal government with a promise to build a refinery and conclude plans to make Nigeria a sugar-producing hub.

Twenty-three years before that transaction, the facility had been in the hands of Mehta Group of India, which, like BUA, failed in most of the agreements entered into with the government.

For many years, BUA did not develop the nursery, nor did it have plans to establish plantations or invest in backward integration projects from where it would source its raw sugar. Its plan has focused mainly on importation of raw sugar and refining it to make huge profits, while leaving the nation continuously dependent on Brazil and other countries for raw sugar.

Seeing the import-inclination of the likes of BUA, then-Minister of Trade and Industry Olusegun Aganga developed Nigeria Sugar Master Plan (NSMP) to chart a course for the industry.

In the words of Aganga, “The Plan has estimated that our demand for sugar would breach the 1.7 million metric tonnes (MMT) mark by 2020. To be able to satisfy this from domestic production, we 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.”

True, BUA has 15,000 hectares of land in Lafiagi, Kwara State, but the company has only done little in terms of plantations and backward integration.

This was why the Minister of Industry, Trade and Investment Adeniyi Adebayo visited BUA Sugar in Kwara State in December 2019, the outcomes of the visit were mostly promises – which the company has been dishing out since 2008.

“What we are trying to do is to produce not only plantation of raw sugar but also refined sugar. So, as you saw when we went round the factory, you will see that we have all the equipment for us to be able to complete this project by December next year, God willing. We have the equipment that will make us produce 10,000 tons per day,” Abdul Samad Rabiu, BUA chairman, had told the minister.

Fifteen months after the visit, the backward integration project is still at an inchoate stage, and no meaningful development and announcement have emanated from it.

The usual excuse for the likes of BUA is the emergence of COVID-19. But, was there COVID-19 between 2008 and 2019?

The reality is that BUA is taking advantage of poor monitoring of the Sugar Development Plan targets set for producers under NSMP to abuse the policy and ensure that the target is not achieved.

Despite that BUA’s work on its sugarcane plantation is still some way behind others currently, the company opened a new export-focused sugar refinery in Bundu Free Zone in Port Harcourt to perpetuate importation of raw sugar.

The company performed poorly in the backward integration objectives, yet it is requesting to increase its import quota of sugar in 2021 by 66.7 percent from 360,000 MT it was allocated in 2020 to 600,000MT.

In fact, as pointed out earlier, it took the company up to eight years to begin work on its Lafiagi site. Even at that, most of the work is at the nursery stage. Its 15,000 hectares of land are still fallow, with excuses of community conflicts, which other players also have.

The key question again is: should BUA be talking of sugar export when the country still has a huge supply-demand gap? In 2012 when the NSMP was developed, Nigeria only produced two percent of its sugar needs. Nine years down the line, the gap is still huge.

No doubt, the new export-focused sugar refinery by BUA is a good feat as it will create jobs for thousands of Nigerians and help the country earn the much-needed foreign exchange.

But the bigger question is whether Nigeria really needs to start exporting sugar at a time it still has a huge demand-supply gap.

Sugar consumption in Africa’s most populous nation has been declining since 2016 due to consumers’ health consciousness and low purchasing power. Yet, the country spends millions of dollars yearly importing the sweetener —a narrative NSMP was targeted to change.

Africa’s most populous nation spent a whopping N263.8 billion in 2020 importing sugarcane mainly from Brazil amid acute FX shortage, data from Nigeria’s Foreign Trade Report said.

The National Sugar Development Council (NSDC), in its midterm 2017 review of the three sugar-producing companies, scored Golden Sugar Company – owned by Flour Mills 58 percent in its assessment, which was higher than the other companies reviewed.

Flour Mills-owned Sunti Sugar Estate is considered the most productive backward integration programme in the industry.

This is not surprising, considering the level of investments made by FMN in the last three years.

Nigeria President Muhammadu Buhari commissioned FMN’s N50 billion Sunti Golden Sugar Estates in March 2018, featuring 17,000 hectares of irrigable farmland and a sugar mill processing 4,500 metric tons of sugarcane per day.

At full capacity, the estate can produce one million tons of sugarcane with roughly translates into 100,000MT of sugar yearly.

Dangote scored 45.8 percent in the target set in the backward integration plan, including several projects, new sugar factories, land developed, land under sugarcane, out-grower farms, sugar produced, and job creation, while BUA scored 17 percent.

Dangote Group, which operates Savannah Sugar, is investing $3.8 billion in sugar and rice and promises to produce enough sugar to satisfy the country’s demand in 10 years.

Latif Busari, former executive secretary of NSDC, had revealed in the mid-term review that BUA produced zero ton of sugar out of the 15, 600 metric tons promised by the company during the period under review.

Dangote produced 20, 200 metric tonnes, being 28 percent of the 72, 000 metric tons it promised to produce, while Golden Sugar produced 800 metric tons, being one percent of the 57, 750 metric tons the company ought to have produced during the period.

BUA’s lackluster performance in the NSDC performance review document is a testament that the company is abusing the backward integration policy for its gain and not for economic growth.

Understanding NSMP

To curtail Nigeria’s heavy import reliance and reduce the deleterious effects of excessive sugar importation, the Federal Government, in 2012, introduced the NSMP as a policy roadmap for attaining self-sufficiency in sugar production.

Under the NSMP, investors would make sizeable investments in the industry within 10 years to guarantee self-sufficiency in the production of the sweetener.

In return, investors in the sugar industry who participate in the backward integration programme will receive incentives in form of a five-year tax holiday, a three-year concessionary import duty tariff of five percent, with a five percent levy, on imported raw sugar for their refineries.

The Backward Integration Policy (BIP), which is a crucial aspect of the NSMP, was introduced as a way of harnessing Nigeria’s sugarcane resources, creating jobs and a ready market through the value chain, while bridging the country’s 1.7 million metric tons of sugar demand.

Through NSMP, Nigeria has begun boosting its sugar production steadily while gradually reducing the importation of the commodity.

Africa’s biggest economy now produces an average of 16,791MT of raw sugar per annum since the NSMP took effect, according to the analysis of National Sugar Development Council (NSDC) data. But this is down to the progress made by Golden Sugar and Dangote Refinery – as earlier acknowledged by the Sugar Council.

Checking Abuse, Making NSMP a success

Experts believe that the NSMP is going to liberate the country’s economy for heavy import reliance as sugar remains the second most imported agricultural commodity after wheat in the country.

However, they stress that the policy must be well implemented for it to be successful and translate to economic growth.

According to them, allowing saboteurs to abuse the policy will not only pose threat to the sugar industry but other commodities where the BIP is replicated.

Hence the federal government must go back to the Sugar Plan and monitor the level of backward integration progress made by each company.

Henceforth, allocation of raw sugar importation should be done on the basis of progress done in backward integration programme. Companies that have nothing on ground should get little or no allocation for raw sugar imports, while those making investments in BIP projects should be able to bring in sugar for refining.

This is not a strange model. It worked in the cement industry, which has made the likes of BUA Group a conglomerate today. The then President Olusegun Obasanjo granted Dangote and Lafarge import allocations based on their BIP projects. The advantage of the policy was that it forced all the players to invest in its own raw materials locally, which is the summary of what backward integration entails.

Nigeria still has a long way to go before it attains self-sufficiency in sugar production. However, with the right investment and effective monitoring of the backward integration, the country can become a net exporter of this commodity and a key player in the global market.

Exporting refined sugar may look economically sound and can tempt policy makers due to the FX-earning opportunity, but it is like robbing Peter to pay Paul as the same FX would still be used to import raw sugar. Who then gains from the whole transactions?

https://gazettengr.com/who-is-sabotaging-nigerian-sugar-master-plan/

2 Likes

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by zickyclef: 3:38pm On Apr 08
How much them pay you? Give me my share make I eat, make I get energy read ur long epistle.

25 Likes

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by signature2012(m): 4:04pm On Apr 08
Exporting refined sugar may look economically sound and can tempt policy makers due to the FX-earning opportunity, but it is like robbing Peter to pay Paul as the same FX would still be used to import raw sugar. Who then gains from the whole transactions?

Simple answer= The Masses.

4 Likes 1 Share

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by OnyeOlokoro(m): 4:05pm On Apr 08
I don't pity BUA. When Dangote was doing same to Nkalagu cement company, Ashaka Cement, Benue Cement company, Ibeto cement and others, BUA and others kept quiet. Today, he has turned against his own brother from Kano.

cc.: Wickedfacts

this matter no involve me abeg

11 Likes 1 Share

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by pickatyou1: 4:05pm On Apr 08
Guess becos naija no dey sweet again. Too much kata kata.

1 Like

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by Brunosamel(m): 4:06pm On Apr 08
Must everything be politicize in Nigeria....

1 Like

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by NwaNimo1(m): 4:07pm On Apr 08

4 Likes

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by classicfrank4u(m): 4:08pm On Apr 08
I no get strength abg.
Anybody way dn read am finish abg help me summarize

3 Likes

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by donprinyo: 4:09pm On Apr 08
Dangote must be stopped

13 Likes

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by hisgrace090: 4:10pm On Apr 08
Dangote fear competition no be smsll.

21 Likes 1 Share

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by missionmex(m): 4:10pm On Apr 08
zickyclef:
How much them pay you?
Give me my share make I eat, make I get energy read ur long epistle.
make them give us our share jare. Man no go fit read this long story way nobi exam I want write
Re: Who Is Sabotaging Nigerian Sugar Master Plan? by MEGA4BILLION(m): 4:12pm On Apr 08
We can import raw sugar and refine here Nigeria because those industries are run by the northern cartel but it is a crime to import rice so that the southerners will suffer.

One thing I know is that this marriage of strange bed fellows will end one day

15 Likes 1 Share

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by angelfallz(m): 4:12pm On Apr 08
Re: Who Is Sabotaging Nigerian Sugar Master Plan? by EBEk101(m): 4:13pm On Apr 08
they just allocate everything to thier northern brother, if it was ah southerner dat did not implement all that was in d agreement since dem for don boot am commot

5 Likes 1 Share

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by SimplyFacts: 4:13pm On Apr 08
Would reading the long epistle pay my bills
Re: Who Is Sabotaging Nigerian Sugar Master Plan? by 735i(m): 4:14pm On Apr 08
There is a story..... of a young man who tried to import granulated sugar into Nigeria.

His containers slept at the port for over a year. Alhaji Putin show am pepper!!

2 Likes

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by Duplexxx: 4:15pm On Apr 08
Nonsense

1 Like

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by Xexza(m): 4:16pm On Apr 08
This is a very long one! By the time I finished, I had forgotten what I read in the first paragraphs.

Article wey dey give dementia. undecided

3 Likes

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by Muhylonaire007: 4:17pm On Apr 08
Lol..
Re: Who Is Sabotaging Nigerian Sugar Master Plan? by JOBgame(m): 4:17pm On Apr 08
i smell figth and resolution to nigeria
Re: Who Is Sabotaging Nigerian Sugar Master Plan? by PrinzJaay: 4:18pm On Apr 08
Obviously DANGOTE, he sabotages every masterplan of every other investor in the country, to take full charge & control of the industrial economy.
Which so far he’s successful, and with karma involved, he keeps declining in the Global Rich list, because of his wickedness & support of the evil Federal Govt. (Prolific businessman my ass**)

4 Likes

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by kennykruzmason: 4:20pm On Apr 08
I don't have the time to read all that
Re: Who Is Sabotaging Nigerian Sugar Master Plan? by IsabiTheWork: 4:25pm On Apr 08
PrinzJaay:
Obviously DANGOTE, he sabotages every masterplan of every other investor in the country, to take full charge & control of the industrial economy.
Which so far he’s successful, and with karma involved, he keeps declining in the Global Rich list, because of his wickedness & support of the evil Federal Govt. (Prolific businessman my ass**)

I don't understand how you got this from all that. If anything, the BUA group has shown to be extremely incompetent and mischievous.

All three groups performed poorly (based on their promises) but Dangote did way, way better than the other two.

P.s. I'm no supporter of Dangote, and please do not take this as an attack on your person.

8 Likes 2 Shares

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by Bus2: 4:27pm On Apr 08
A poor article written by a mediocre dUngote apologist.

2 Likes

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by TSBO: 4:27pm On Apr 08
Good article that provides a clear counterbalance to the other article on the frontpage vilifying Flour Mill and Dangote for opposing BUA's new refinery.

But again, trust most to jump to conclusions without reading through..

I think Dangote needs to find a means of improving his image in the Nigerian market. Methinks part of the challenge is that his enterprises are named after him, so it is almost impossible for them to have independent identities. While there are benefits to being the eponym of such dominant enterprises, it also has its disadvantages, especially in a nation that's deeply divided.

8 Likes 2 Shares

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by drLammy(m): 4:29pm On Apr 08
If this is true

Then BUA ain't doing it right

1 Like

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by Shoodboi: 4:31pm On Apr 08
Dangote is clearly sponsoring the media to attack BUA.

This was the same nonsense he did a few years ago when he sponsored media houses to list the superiority of cement roads over asphalt road.

But this time, he couldn't attack BUA without advertising his "achievements"

7 Likes 1 Share

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by sojfarm: 4:31pm On Apr 08
The State of Nigeria is in a set of wrong hands and another set of senior thieves are warming up to sustain the suffering.

1 Like

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by rockstar99: 4:32pm On Apr 08
IsabiTheWork:


I don't understand how you got this from all that. If anything, the BUA group has shown to be extremely incompetent and mischievous.

All three groups performed poorly (based on their promises) but Dangote did way, way better than the other two.

P.s. I'm no supporter of Dangote, and please do not take this as an attack on your person.
Did they all start at the same time. Dangote acquired Savannah Sugar from the BPE around 2006. When did the others start the backward integration. There is an online article adducing this to the refusal of BuA to increase sugar price for Ramadan.

3 Likes

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by ejunkie(m): 4:34pm On Apr 08
This is a video of BUA's sugar factory site in Lafiaji. Over ten years of chopping billions in CBN interventions for sugar and tax relief on imported sugar, nothing to show!..

Now he has gone to open a new refinery to keep importing sugar! Who did we offend in the country?

6 Likes 1 Share

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by Nightalan: 4:35pm On Apr 08
You people should read, read, read...Ah!
After this report indicting BUA some unlearned folks will rather echo Dangote, Dangote, Dangote as the culprit, na wa o.
Reading will do you lots some good, and if you can't simply skip the topic instead of sounding like a mentally handicapped drunk in a beer parlour.

15 Likes 5 Shares

Re: Who Is Sabotaging Nigerian Sugar Master Plan? by wman(m): 4:38pm On Apr 08
So, we import sugarcane in Nigeria? Wow.

1 Like

(1) (2) (Reply)

YouWIN Final Awardees/Winners Announced / Nigerian Breweries To Launch Multi-billion Naira Project In Enugu, Laud Ugwuanyi / Is Nigeria Untapped And Ready For Outsourcing?

(Go Up)

Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health
religion celebs tv-movies music-radio literature webmasters programming techmarket

Links: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Nairaland - Copyright © 2005 - 2021 Oluwaseun Osewa. All rights reserved. See How To Advertise. 139
Disclaimer: Every Nairaland member is solely responsible for anything that he/she posts or uploads on Nairaland.