Mr Zacch Adedeji is the Executive Secretary of the National Sugar Development Council (NSDC). In this interview, he said the target of Nigeria’s Sugar Master Plan is to end sugar importation and earn Foreign Exchange (forex) with sugar exports through Backward Integration Programme (BIP).
What is your assessment of the sugar industry in Nigeria?
One of the greatest assets we have at the NSDC today is the Master Plan put in place by the agency. The Agency has succeeded in stopping the importation of refined sugar. The country was spending heavily on the importation of refined sugar hitherto to meet its consumption, which has now grown to 1.7 million metric tonnes. Through the instrumentality of the plan put in place by the agency, Nigeria now has a combined local production capacity that is about twice that.
The NSDC, thereafter, selected those who can achieve BIP to add value to the raw sugar being brought in. This has led to the creation of hundreds of thousands of jobs for Nigerians working in the three local refineries. So, NSDC has done very well in increasing the country’s sugar refining capacity. That is the starting point. Today, the country does not import refined sugar. We only import raw sugar which is refined in the refineries set up by the operators in the country. The focus now is our backward integration programme which we are now running. So, the same energy we displayed in putting a Master Plan in place is being devoted to the Backward Integration Programme.
What are the constraints to the council’s mandate?
Since I assumed office, I have been trying to understand and address the constraints to progress. These constraints include availability of suitable land, hostility among some host communities, financing and infrastructure. For example, sugar grows under quite specific conditions and requires a considerable amount of water. So, just having land is not enough. The land must have the correct topography and also have adequate water via irrigation. Then there must be provision of infrastructure to enable mechanised farming to be conducted. So, as you can imagine, to really develop the industry as we desire, many stakeholders across the three tiers of government and the private sector have roles to play.
One of the key reforms we have introduced is to bring in external resources to support our monitoring. We see monitoring as the key to attainment of the objectives of the Master Plan. It will allow us to truly measure progress and to take corrective action, if any player is not meeting their commitments. So, each operator has to submit a quarterly plan and we monitor progress against each milestone. But the wider vision is to deepen the industry and this will involve attracting investments and overcoming some of the constraints.
Already, we are interfacing with the state governments on areas that have been identified as suitable for sugar cultivation to ensure release of land and provision of infrastructure. These states are Nasarawa, Kwara, Adamawa, Oyo, Niger, Taraba, Ondo, Sokoto and Bauchi.
We are also working with the Nigerian Ports Authority (NPA) and the Customs to try and ensure that equipment needed by our operators get out of the ports on time, avoiding congestion. This is because sugar cultivation is time-sensitive and delays in harvesting can result in losses to our farmers, which can discourage them. Finally, we are working with CBN to arrange a single digit funding that will support investment in the sector.
From our analysis, strict implementation of the Nigeria Sugar Master Plan will create thousands of jobs in our rural areas and in the wider value chain such as logistics, marketing and even in technical areas. This is why we are very determined to ensure that we achieve our objectives.
Competition is rising in the sugar backward integration, what is your take?
My view is that as a regulator, we are ultimately the champion of the consumer. As I indicated earlier, the Sugar Master Plan is set up to attain certain clear objectives that are in the best interest of the Nigerian people. These include: stable pricing, job creation through backward integration, conservation of foreign exchange and value enhancement. So, in terms of disputes in the industry, our role is to enforce the provisions of the Nigeria Sugar Master Plan. Where a dispute affects the attainment of the Master Plan, it becomes our concern. Our yardstick on resolving disputes is the Master Plan and this was how we engaged with the parties in this instance. The truth is that there is a lot of room for improvement across the sector and this is our focus. We are playing catch-up, so infighting creates a distraction. In the final analysis, the entire sector has a long way to go and we need all hands on deck, working collaboratively to ensure that we meet our objectives.
The Central Bank of Nigeria (CBN) recently restricted sugar importation to Dangote, BUA and Golden Sugar, does this align with the Sugar Master Plan?
First, let me clarify that what the CBN has done is very much in tune with our Master Plan. At the beginning of the implementation of the Master Plan, there are conditions set for those wishing to participate in the BIP. One of the conditions is for them to have a verified plan to produce sugar locally. The three companies you mentioned are those that have committed huge investments into the plan by setting up refineries with a minimum refining capacity of 100,000 metric tonnes (MT) for each of them and they have also keyed into the BIP.
Sugar importation is based on a quota which is issued under the terms of our Master Plan to any company that can produce a minimum of 100,000 metric tonnes of sugar locally. What CBN has done is to link our Master Plan progress to entitlement to forex at an official rate. These three companies you mentioned have, in compliance with the Master Plan, been allowed some incentives and concessions to encourage their investments in local sugar production.
Our target is to have more of such operators. We are actively working with a number of smaller players to help them get to the 100,000 MT target as quickly as possible. From my background in Procter and Gamble, where we produce products with lots of competitors I know that competition spurs excellence and innovation.
So, I expect CBN to widen this list, as more operators key into the scheme. Don’t forget that local production is our primary focus. So, importation should be a temporary state of affairs to supplement until local production can meet our needs. The quantity imported should reduce over time.