NSDC targets $1bn investment to cut sugar imports

The National Sugar Development Council (NSDC) in Nigeria is aiming to inject $1 billion into the country's sugar industry through a strategic agreement with SINOMACH, a Chinese engineering firm, and a N10 billion Sugar Project Acceleration Fund established with the Bank of Industry. The NSDC's Executive Secretary, Mr. Kamar Bakrin, revealed these plans during a recent meeting with members of the Abuja Chapter of the Chartered Institute of Directors.

Nigeria consumes approximately 1.8 million metric tonnes of sugar annually, with $1 billion spent on imports each year. The NSDC's strategy, outlined in the Nigeria Sugar Master Plan 2.0, focuses on increasing local production and retaining more value within the Nigerian economy. The council emphasizes that the industry's challenges stem from poor implementation rather than a lack of policy.

NSMP 2.0 is designed to shorten Nigeria's path to self-sufficiency, with the potential to produce two million metric tonnes of locally produced sugar. The council also plans to expand the use of sugarcane beyond sugar production, exploring its potential for ethanol, animal feed, and power generation. To ensure effective enforcement, the NSDC has developed a four-principle program - qualify, reward, verify, and enforce.

Special attention is given to backward integration, where companies seeking import quotas must demonstrate commitment to integrating with the local sugar industry. The NSDC is leveraging satellite imagery and field inspections to verify activities at project sites, reducing reliance on self-reporting. The N10 billion Sugar Project Acceleration Fund will finance feasibility studies and project preparation, paving the way for the $1 billion engineering, procurement, and construction-plus-finance agreement with SINOMACH of China.

The council is also engaging with Afreximbank and partnering with the Nigeria Governors' Forum to accelerate the development of sugar estates across the country. Additionally, the Sugarcane Outgrower Development Programme aims to involve smallholder farmers in the sector's growth by reserving land for outgrowers and investing in host communities.

Drawing inspiration from Brazil's institutional approach, the NSDC emphasizes the importance of strong institutions in driving industrialization.