‘Why Nigeria is not producing enough sugar’

Weekly Trust: What is the Sugar Development Commission really all about?
Dr. Latif Busai: Our main mandate is to ensure   that Nigeria is a notable player in the global sugar trade and produce for self sufficiency and export to other countries.  The Nigeria Sugar Development Commission is one that has really not been given the required prominence in the economic sector. It comes up with strategies that would improve the economy through the sugar sector. The policies put in place in the commission include progressively reducing government direct participation in the sugar sector while encouraging private sector participation in sugar production in the country. We are also mandated to reduce sugar importation while increasing local production to   achieve self sufficiency.
Nigeria is known to have a very fertile ground for agriculture. Many would like to know why the stumbling block in Nigeria’s sugar cane production as we keep importing instead of exporting?
There are a number of reasons why we have not been able to produce for our own consumption and for export. Currently we are producing less than two per cent of what we consume. It goes far back, the first sugar company was established in the ‘60s with an installed capacity of about 45,000 tons of sugar per annum. The next one was the Savannah Sugar Company established in the ‘80s with an installed capacity of about 60,000 metric tons. At the time these two companies were established and still functioning, Nigeria was consuming about 700,000 metric tons of sugar. Even if both companies were to be producing at full capacities, we would be producing about 105,000 metric tons of sugar, we would still be short of the requirement needed for the country. Also,   we   have a situation where the demand for sugar keeps rising while local production and supply stagnated and indeed regressed. Today, Nigeria consumes about 1.43trillion metric tons of sugar and the two sugar companies that were at that time producing over fifty metric tons for the country are no longer producing. You are aware that both companies were privatized. For now they are the only sugar companies in Nigeria and even if they are producing at full capacity, they are doing just a little compared with what the industry really needs and these companies also have their own challenges.
I would say the constraints are the few operating companies against the backdrop of our increasing demand for sugar in the country, and why do we have this? For over 30 to 40 years, the country has not been able to attract any foreign investment to that   sector.  And we need a huge number of investments to be able to fill the gap we have in the sector.
I would say why we have not been able to attract investors in the sector is because the policies have not been too investor friendly. We do not have protection for investors; our policies are such that up on till the master plan came in, sugar production in Nigeria was an all comers’ affair because everyone was just importing all manner of sugar into the country.
Don’t you think the council needs to put the right policies in place to ensure   Nigerians don’t bear the brunt of the lack of self sufficiency and contribute to the GDP of the country?
What we have put in place is the Abuja sugar master plan which was approved by the Federal Executive Council for implementation September last year. We have started full fledge this year. The policies entail four basic objectives in this framework and the first is to produce sugar until we have self sufficiency, generate jobs for both skilled and unskilled labour and to leverage on the sugar industry to produce ethanol and generate electricity. Traditionally everywhere the sugar industry is to be able to generate its own electricity.
Of all these strategies the most important one is what we call the backward integration programme which requires the refineries to go back to the farm and begin to produce the raw sugar that they would use as their own raw materials from within Nigeria. They add about three to four per cent value to the sugar production. The only import the raw sugar and bleach it to what we see as refined sugar they sell to the general public.
So, backward integration plans targets these refineries and now that there are refineries in place we want them to start producing the raw sugar they are importing. Gradually, importation would be reduced. Unlike in the past where they import all that they want, but now whatever they intend to import and produce has to be approved by Mr. President. We will then benchmark the quota on their sugar importation just like it was done in the cement industry.
The incentives that government is providing are that all the machinery they will import for the farm to the factory is going to be at zero duty. They are going to have five years of tax free holiday for their operations; they will enjoy what they call the pioneer status.
Another incentive is that the government wants them to engage the rural communities in which they are located in what is called the out growers scheme in which you engage the farmers to grow and supply sugarcane and supply to the millers. This enhances income, gives them a sense of belonging and reduces poverty.
We have seen many beautiful and well planned   project that never get to see the light of the day. What makes this different?
We are making sure that it does not go the way of the past. We are doing everything to make sure that this master plan works out according to plan. We cannot afford to keep having policies, but never following them up in terms of implementation. We have an evaluation and tracking template to keep up with the progress in the sector. So, before any refinery starts, it has to sign and tell us when it hopes to develop the land for full take off of the refinery. We will monitor them step by step from scrap to finish. We are not going to wait till year 2020 before we decide that, this isn’t feasible, so let shift the goal post again. The era of shifting goal post is over.
Some of the farmers have complained that the varieties of sugarcane they get are poor yielding? What is the way out in this instance?
We are already addressing that situation, because it is a critical one in the industry. There are a number of challenges though, all the varieties now being grown in Nigeria were imported 40, 50   years ago. That was the last time sugarcane was imported. They have stayed long as aresult th ey succumb to biotic stress. When this happens, they suffer yield decline, so what we need to do is to import new varieties, but more importantly than that is that we need to get a local researching institute to start researching and developing our own varieties and once they start the ones that are getting old and declining in yield there are new ones to replace them. We are bringing varieties from areas that have the same climatic conditions as Nigeria. So the varieties   are likely to do well here.
Sugarcane production is a capital intensive. In what way has the council encouraged local sugarcane farmers?
There is a competitor from within and that is the normal chewing sugarcane we see commonly around. Mind you, it is not the same sugarcane that is being used for sugar production. Somehow, farmers who grow the normal chewing sugarcane still make a lot of money from it.  Before now we were funding the out growers scheme   hundred per cent just to allow the out growers supply the millers. They ordinarily do not want it, because sugar millers have their own field. So, we are encouraging the local farmers by telling the refineries and millers that at least 40 per cent of the sugarcane production should come from the local farmers. We calculate the amount of cane that can be produced on a farm and we give to the farmer to plant and supply to the miller and when he supplies he can take his own profit from whatever he is being paid by the millers.
 Where do you see the sugar sector in Nigeria in the next few years?
 We are targeting 1.74million metric tons by 2020 even beyond our projected year. I see a very rosy future for the sugar industry. We intend to make Nigeria a notable global player in the sugar global sector where the cost of sugar will not be passed to consumers.