FG targets $7.1bn investment in sugar industry, 110,000 jobs

By Diden Abigail Owuntarose

The Federal Government has unveiled a $7.1 billion investment programme aimed at boosting local sugar production, creating 110,000 direct and indirect jobs, and reducing Nigeria’s dependence on imported sugar over the next 10 years.

The programme, coordinated by the National Sugar Development Council (NSDC), is expected to raise annual domestic sugar production to more than two million metric tonnes and save the country an estimated $2.1 billion in foreign exchange annually.

The Executive Secretary and Chief Executive Officer of the NSDC, Kamar Bakrin, disclosed the plan while outlining efforts to achieve self-sufficiency in sugar production through expanded agricultural activities, improved processing capacity and increased private-sector investment.

According to the council, the programme will focus on improving existing sugar estates, expanding production by established operators and developing 10 new integrated sugar estates across Niger, Kwara, Oyo, Kaduna, Jigawa, Bauchi, Nasarawa and Adamawa states.

The proposed estates are projected to produce about 835,000 metric tonnes of sugar annually when they reach full capacity.

The council said 143,478 hectares of land had been secured for the proposed projects, which are expected to have a combined milling capacity of 55,500 tonnes of sugarcane daily.

The estates are also designed to support ethanol production and electricity generation, creating additional opportunities for agricultural processing and other businesses within the sugar value chain.

The NSDC estimates that established operators could contribute about 1.22 million metric tonnes of sugar annually, while existing estates and the proposed new projects would help push total domestic production beyond two million metric tonnes.

Nigeria’s sugar industry relies heavily on imported raw sugar, leaving local manufacturers exposed to foreign exchange pressures and fluctuations in international commodity prices.

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Increasing local production could help reduce the demand for foreign exchange used to import sugar while creating opportunities for farmers, processors, transport operators and other businesses.

The council said the $7.1 billion programme would require approximately $5 billion in debt financing and $2.1 billion in equity contributions from investors and project promoters.

The proposed debt financing is expected to come from export credit agencies, development finance institutions and local development finance institutions.

The NSDC has also disclosed a $1 billion agreement with Chinese engineering company Sinomach relating to sugar estate development, although the associated financing arrangements are yet to be completed.

In addition, the council is working with the Bank of Industry on a proposed N10 billion Sugar Projects Acceleration Fund to support feasibility studies and prepare projects to attract investment.

To increase the supply of raw materials to sugar mills, the council is also targeting 11,000 hectares of farmer-grown sugarcane around existing facilities.

It said 7,000 hectares had so far been identified with partners in Kwara, Niger and Adamawa states.

The initiative is expected to strengthen links between smallholder farmers and industrial processors while expanding agricultural opportunities in host communities.

The proposed programme is projected to create 110,000 direct and indirect jobs and support more than one million livelihoods across the sugar value chain.

However, achieving these targets will depend on securing the required financing, completing project assessments, developing the proposed estates and ensuring a reliable supply of sugarcane.

The success of the initiative will also depend on whether locally produced sugar can compete effectively in terms of price, quality and supply reliability.

The council’s investment plan represents a major effort to expand Nigeria’s agricultural and industrial capacity, but the projected benefits will ultimately depend on how quickly the proposed projects move from planning and financing into full commercial production.