$5bn Sugar Investment Plan: Reps to Initiate Amendment of NSDC Act
The Executive Secretary/CEO of the National Sugar Development Council (NSDC), Mr. Kamar Bakrin, has shared the Council’s comprehensive plan for accelerated sugar project development in 2025 with the House of Representatives Committee on Industry.
Delivering his keynote address at the retreat organised for the Committee members in Calabar, Cross River state at the weekend, Mr. Bakrin said before the 2025 plans and the Nigeria Sugar Master Plan (NSMP) II can be achieved, certain loopholes in the establishment law must be addressed.
The Committee members who attended the retreat therefore agreed in principle to take a serious look at the law establishing the Council and make necessary amendments that will empower the Executive Secretary and his Management team to successfully pursue the advancement of the Nigeria Sugar Master Plan (NSMP) II.
“Our focus in 2024 has been on resetting the agenda and realigned the industry to the high expectations of Nigerians. For us, 2025 is the year of acceleration. This is not a choice but a must, given our macroeconomic realities and the tremendous benefits we know are possible from the cultivation and processing of sugarcane.
“Our key priorities for 2025 are to (i) Accelerate to pace of project development; (ii) Facilitate investment of $5bn into the Sector; (iii) Ensure our priority greenfield projectsare ready for investment; and (iv) Strengthen NSDC’s capacity to develop the sector.
“We have set out the initiatives to be executed in 2025 that will drive the realisation of these objectives. One of these key initiatives is the amendment of the NSDC Act to address loopholes created by conflicting policies and codify its market protection provisions.
“This is a key requirement that emerges in all our conversations with our current and potential investors and financiers. As usual, we shall be counting on the House Committee for your guidance and support in making this happen in 2025.
“We are most grateful for the continued intervention and direction which this event is privileged to receive from Mr. President which has resulted in the resolution of key issues which were hindering its performance and provides investors with the confidence that the Nigerian Sugar Industry is a viable investment option,” he said.
Mr. Bakrin who resumed office on October 16, 2023 after his appointment by President Bola Tinubu, also shared with the Committee members how the journey has been in the last one year.
“Since my resumption in office, we have sought to address the fundamental issues which held back investment in the sector such as – How can sugar production become viable in Nigeria? How do we extract all the benefits of sugarcane processing? How do we better align the NSMP’s incentives to performance? How do we reposition NSDC as a world-class Development Agency and not just a Regulator?
“Working with our investors and stakeholders, we have reimagined NSMP II. The objectives of NSMP II are now threefold – to attain self-sufficiency in sugar production; develop a globally competitive sector and become the cost leader in Africa; and develop an inclusive and sustainable sugar sector.
“These objectives shall be fulfilled using seven pillars that reflect the key changes that must be made – (i) Ensure sugarcane farming for the Backward Integration Programme is only carried out on suitable land; (ii) Partner with investors that are adequately motivated and possess the financial resources to execute and pedigree to attract funding into their projects; (ii) Attract the right mix of capital suitable for a capital-intensive, long-gestation business such as sugar; (iv) Provide directly relevant research, development and continuous improvement; (v) Improve the viability of sugar production by ensuring a diversified and optimal product mix; (vi) Deploy resources towards interventions that de-risk and enable investment-readiness of projects in the sugar sector; and (vii) Ensure the sector’s growth also results in the development of host communities and the adoption of sustainable farming and factory practices.
“We have also commenced several programs to strengthen our capabilities in NSDC and NSI. We are strengthening NSDC’s technical and managerial capabilities and transforming our Research and Development capacity in NSI,” he noted.
To put the NSMP II in proper perspective, the NSDC boss reflected on the achievements of NSMP I.
“As a result of the implementation of NSMP I, the sugar industry has been a key contributor to Nigeria’s economic growth and a catalyst for the development of the host communities in which they are established.
“Total installed capacity of Nigeria’s sugar refineries has risen to 3million metric tonnes, creating self-sufficiency in the production of refined sugar, securing a steady supply of refined sugar for the domestic market and creating capacity in readiness for the market access opportunities created by the African Continental Free Trade Area Agreement (AfCFTA).
“BIP projects under the NSMP have attracted $1bn worth of investments from its major investors. These investors have created over 15,000 permanent and seasonal jobs, acquired over 180,000 hectares, placed 13,000 hectares under cane, established cane processing factories with a total capacity of 18,000TCD in five active project sites.
“Establishment of an Outgrowers Scheme that engages 535 farmers and pays over N1billion per annum. The BIP Projects have also established numerous impactful Corporate Social Responsibility (CSR) initiatives in their host communities covering schools, hospitals, grants, palliatives, infrastructure and even support for farming other crops.
“Investments have also been made in greenfield sugar projects by investors who are not beneficiaries of the NSMP’s fiscal incentives. These include the Great Northern Agribusiness Limited (GNAL) Project in Gagarawa, Jigawa State to establish a 5,000TCD sugar plant; 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; and two mini-sugar projects: Oyo Sugar Processors Ltd, Iseyin, Oyo State and Goronyo Sugar Project in Goronyo, Sokoto State.
“Establishment of the Nigeria Sugar Institute to conduct cutting-edge research and drive innovation that will catalyse the development of the sugar industry and enhance its viability, competitiveness, and sustainability. This initiative promotes equitable access for all investors in the industry and facilitates the adoption and commercialisation of the results of the R&D activities,” he added.
He noted that the NSMP II has a protected domestic market made attractive by a robust incentive framework which includes a Protective Tariff Regime that is consistent with the various protocols to which Nigeria is a signatory and meant to protect the market for investors who are implementing the BIP, use of an annual Raw Sugar Import Quota Allocation to determine how much sugar can be imported by the participants in the BIP and support of an extensive out-growers scheme to promote inclusiveness and sustainability and stimulate partnership with host communities of the sugar estates and projects.
Others include support for greenfield projects which neither participate in the BIP nor benefit from the NSMP’s fiscal incentives, a mandatory Backward Integration Programme for the Sugar Refineries who bought the publicly-owned sugar estates and supply refined sugar to the Nigerian market and also a two-tier Monitoring and Evaluation Framework, consisting of the Sugar Roadmap Implementation Committee (SURMIC), a multi-agency committee charged with the supervision of the NSMP, and the Sugar Industry Monitoring Group (SIMOG) composed of CEOs of all local Sugar Manufacturing companies, a peer review platform that promotes the credibility of outcomes,” he added.
Looking ahead, Mr Bakrin said: “These are exciting times for investors and stakeholders in Nigeria’s Sugar Industry. We have an unmet and growing local demand of 2million metric tons and a deficit in Africa that is expected to expand to 13mMT by 2030.
“There are also tremendous unrealised opportunities in an ever-growing list of sugarcane derivatives such as biofuels, polymers, bioplastics, sustainable aviation fuels, power production, etc,” he concluded.
Also speaking at the retreat themed, “Creating Synergy for Nigeria’s Sugar Industry Development,” the Committee Chairman, Hon. Dolapo Enitan Badru, commended the NSDC boss and his management team for the ‘impressive’ work they have done in the last one year.
He expressed the commitment of the Committee to the institutional steps that must be taken to achieve the Council’s 2025 sugar project development plan.
He stated that properly codifying the NSMP into law is required to improve investor confidence and address the lacuna in the existing law that enables some operators get away with not contributing to the realisation of the vision for the sugar industry, adding that all the loopholes will be addressed in the proposed amendment of the NSDC Act.
