Sugar production in Nigeria has jumped 85.3 percent between December of 2015 and end of 2016, but consumption has also risen by 4 percent, as demand by households and manufacturers remain on the high.
Africa’s most populous country, saw its sugar production in 2016 rise to 25,000 mt, from 13,488 mt recorded in 2015, while consumption increased to 1.56mmt from 1.50 mmt obtained in 2015, data from the National Sugar Development Council (NSDC) show.
“Savannah Sugar in Numan, Adamawa State; and Golden Sugar, actually processed and produced sugar last year. They also refined,” Umar Ango, head of north-west zonal office, National Sugar Development Council (NSDC), told BusinessDay in a telephone interview.
Nigeria developed the National Sugar Master Plan (NSMP) in 2012 to achieve sugar self-sufficiency in 2016/ 2017. But the target was revised and extended to 2023, with a target to churn out 1.7mmt sugar production.
The master plan has attracted deep pocket investors, who are pumping over $2.6 billion into the industry.
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’ time.
“We have developed a sugar backward integration project plan, targeted at the production of 1.5mmt per annum, from various sites across Nigeria in the next 10 years. We are acquiring about 150,000 hectares for sugar plantation in Adamawa, Taraba, Nasarawa, Kwara, Kogi and Niger states,” said Abdullahi Sule, acting group managing director, Dangote Sugar, at an MoU signing with the Nasarawa State Government, in June.
While Flour Mills of Nigeria’s Golden Sugar Company, is pumping $300 million into the development of its sugar estate at Sunti, HoneyGold Group and Crystal Sugar Mills are investing $300 million and $30 million respectively, to produce 200,000 mt and 60,000mt respectively.
Similarly, Confluence Sugar Company is investing $240 million in Kogi State to produce 200,000 tonnes sugar per annum, on about 37,000 hectares of land at Ibaji.
Latif Busari, executive secretary of NSDC, said there was an about 400 per cent increase in sugar projects between 2013 and 2016 but 80 per cent increase when it comes to backward integration. Busari estimated new investments in the industry at N157 bilion.
However, Africa’s biggest economy is still importing a lot of raw sugar from Brazil. Nigeria imported raw sugar worth 1.55 million metric tons, estimated at $516.2 million in 2016. Per capita consumption in the country rose to 9.1 kg from 8.6kg and 8.7 kg in 2014 and 2015 respectively.
Nigeria imported 1.43mmt estimated at $632.7 million in 2014, as against 1.48mmt, worth $552.5 million in 2015.
“Nigeria today spends a lot of money importing sugar in the country, whereas we can grow it in Nigeria,” said Godwin Emefiele, Central Bank governor, in May this year.
Aliko Dangote, president of Dangote Group and Africa’s richest man, said while signing an MoU in Nasarawa State, that the group would set Nigeria on the path of sufficiency, adding that Phase II of the project, extended to cover 100,000 hectares, andwould be the largest sugar plant in Africa.
According to Busari, backward integration targets were not met by 2016 as some of the participants did not meet the expected targets.
He said BUA scored 17 per cent, while Dangote and Golden Sugar scored 45.8 percent and 58 percent respectively in terms of backward integration.
“Community hostilities and political elite interference in access to land are preventing land acquisition. Sugar needs large hectares of land and we are asking the Federal Government to engage the state governments to make land available,” Busari said in a recent interview on Channels TV.
Demography and rise of the food and beverage industry are two major factors driving sugar demand in Nigeria. The country’s population is estimated at 182 million, while the rising urbanisation and growth of super stores are propelling demand for packaged foods.
“Sugar confectionery continues to benefit from population growth, which has ensured a good supply of new consumers, supporting both volume and value sales. Demand is particularly strong amongst children, the number of which is growing strongly,” said Euromonitor International, on Nigeria’s sugar confectionery industry.