Sugar importation to drop by 0.32% in 2028

…As Nigeria projects to spend $454 million on sugar imports in 10 years

According to Nigeria Sugar Development Council (NSDC) importation data, sugar importation is to drop by 0.32% in 2028, provided that the expected sugar factories come into limelight during the period under review. This was deduces from MSMEsToday analysis of sugar import data from the Nigeria Sugar Development Council (NSDC). Though the drop seems in significant, further drop in sugar importation is expected more sugar factories at different stages of completion become fully operational.

Our checks reveal that the country’s sugar importation is to reduce from 1.22 million metric tonnes in 2018 to 1.21 million metric tonnes in 2028, representing a decrease of 0.32%. In monetary terms, raw sugar price is projected at $375.0/per ton in the international market. This implies that Nigeria is to spend a total of $454.6 million to import 1.21 million metric tonnes of raw sugar in the next 10 years.

Contrary to drop projected in the volume of sugar importation, the spending on importation increases when compared with what was spent in 2018. The spending on sugar importation increased by 34.8% from $337.3 in 2018 to $454.6 in 2028 as result of increase in the price of raw sugar in the international market. The raw sugar price is to increase from $286.5 in 2018 to $375.0 in 2028.

Historically, the country spends about N101.9 billion annually to import sugar largely because domestic production supplies only accounts for about two per cent of the nation’s demand.

Due to the gap between sugar demand and supply the Federal Government in 2008, directed the NSDC to develop a road map for the attainment of self-sufficiency in sugar within the shortest time possible.

In compliance, the council came up with the Nigeria Sugar Master Plan (NSMP), which projected that the country’s demand for sugar would reach the 1.7 million metric tonnes mark by 2020.

The plan projected that for Nigeria to achieve its domestic sugar targets, the country needs 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 from 2008. It was projected that the bulk of the investment capital will come from private investors.

The plan became necessary considering the huge foreign exchange drain from the nation’s purse as a result of sugar importation.

It was also observed that the consumption of sugar would rise in the next ten years contrary to drop in importation. It will increase by 21% from 1.22 million metric tonnes in 2018 to reach 1.25 million metric tonnes in next ten years. MSMEsToday observed that the increase in consumption will be largely due to population explosion in the country, which has been on a steady rise unlike production, a development that has kept both import values up over the period.

Data available to MSMEsToday shows that in 10 years, Nigeria produced 220,594 metric tonnes of sugar, being about 13 million metric tonnes less than the country’s total consumption within the same period.

Rattled by the two per cent contribution of the local sugar industry to the country’s total domestic consumption, the Federal Government in 2008 began the process of reducing sugar imports through the implementation of the plan which have recoded some gains, including N157 billion investments recorded in the sugar sector, 400 per cent increase in terms of projects but 80 per cent increase when it comes to Backward Integration Programme (BIP) with the Federal Government.

Presenting the status report on the implementation of the NSMP, Dangote, BUA and Golden Sugar refineries were approved as BIP operators and were made to sign formal commitments detailing a number of indicators by which their performance would be measured.

There is need for government to backup and give full support to the implantation of Nigeria Sugar Master Plan in order to create more than 20,000 jobs for individuals and Micro, Small and Medium Enterprises (MSMEs). This will also enhance the country’s chances attaining self-sufficiency in sugar production within the shortest time possible.

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