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| Mr Samuel Kwabe, Acting Executive Secretary, Nigerian Sugar Development Council |
Mr Samuel Kwabe is the acting executive secretary of the Nigerian Sugar Development Council (NSDC). In this interview he said the sugar industry is playing a key role in President Muhammadu Buhari’s efforts at diversifying the economy. He also revealed what the industry is doing to create jobs and generate electricity, among other things.
In view of the dwindling oil prices, what role is the sugar industry playing in the efforts to diversify the economy?
It is no longer a secret that the mono-economic system hinged on oil has failed, especially with the slumping prices of crude oil globally. But the sugar industry can make significant impact in terms of job creation.
President Muhammadu Buhari’s administration has vowed to diversify the economy, with particular preference to agriculture and solid minerals.
To create jobs, we are implementing a master plan known as the Nigeria Sugar Master Plan (NSMP). It is a 10-year plan document, and we are in the third year of the implementation. It is believed that at the end of 2023, the sugar industry should be able to create over 100,000 jobs for Nigerians. I can tell you that presently, the two functional sugar industries we have – the Golden Sugar Company in Niger State and the Savanna Sugar Company in Adamawa State – have provided jobs for about 13,000 Nigerians. This tells you that the industry has huge potentials for job creation.
Apart from sugar, the sugarcane has potential to produce ethanol and electricity through coal generation. If our plan is faithfully executed, by the end of the period, the sugar industry should be able to produce over 160 million litres of ethanol. Also, in the area of electricity generation, the industry should be able to generate over 400 megawatts of electricity.
In a country like Brazil, it is very hard to find vehicles purely relying on petrol. Most of their fuel requirement is a blend of petrol and ethanol. These are the few areas the sugar industry can make huge impact in the present diversification efforts of the present administration.
How much revenue can it generate for the country?
In revenue generation, the NSMP states that at the end of the 10-year plan period, we should be able to produce over 1.7million metric tons of sugar. That would be more than enough to meet our domestic requirements. By this, it can even earn Nigeria foreign exchange. Presently, we are spending huge amounts of money to import raw sugar because the bulk of our sugar requirement is imported.
What is the projected capacity of the Golden Sugar Company when it starts full production?
The capacity is about 4500 tons per day, and that can probably give you about 60,000 metric tons of sugar per annum. I am happy to tell Nigerians that the Savannah Sugar, owned by the Dangote Group, has been able to produce about 13,000 metric tons of sugar this year. The company is undergoing expansion. As a matter of fact, they are in the process of acquiring a brand new mill, which is about three times the size of the present one.
Just recently, 20 Brazilians, who were representatives of mill producers in their country, came to Nigeria on the invitation of the Dangote Group. They visited Savannah with a view to accessing and identifying where the mill would be installed.
The Dangote Group has a plan to start their project in Taraba State. All issues concerning the land have been resolved, so they will start their field preparation for sugarcane planting this year.
The third site where significant progress is being made is Bua Sugar at Lafiaji. This year, they have the plan to develop 500 hectares of land for their seed cane. So far, I was informed that they had developed about 230 hectares.
Apart from the Backward Integration Programme, what other incentives do you have for potential investors in the industry?
The Backward Integration Programme is not an incentive per say; it is a policy of government to make the existing players in the industry look inward for their raw materials. These players are Dangote Sugar, Bua Sugar, and the Golden Sugar owned by the Flour Mill. They were made to sign the programme with the government. It is a kind of import substitution strategy put in place by the government.
The government has put specific incentives in place to attract investments into the sugar industry. First, the government has put in place, zero per cent duty on machinery import. Government has also put in place, five years tax holidays for sugarcane value chain. It has also come up with the out-grower programme as an incentive. The idea is that since the mill will actually be too busy to grow the sugar, farmers should be encouraged. We are expecting that at the end of the day, about 50 per cent of the sugarcane requirement would be produced by out-growers. And we are working hand-in-hand with the Bank of Agriculture.
We have established a pool of funds with the Bank of Agriculture so that out- growers can access loans at a single digit interest rate. This is a very big incentive. The loan covers farm input like fertiliser, agrochemicals and so on.
The government has also taken it upon itself to prepare a feasibility report on identifying sugarcane growing areas. We have already prepared the feasibility report for 10 sites. By this, the burden of preparing feasibility report has been taken off the investors.
We are also liaising with relevant government agencies to do extension services to sugarcane growers at no cost to them. This is another area of incentive. Also, government is always ready to provide infrastructure like access roads between the farms and the mills, especially where there are out-growers. We have also provided transformers as incentives to smaller sugar mills.
Again, Savannah Sugar’s water requirement during the dry season is provided by the Kiri Dam, which is 100 per cent owned by the federal government. This is also another area of infrastructural incentives.
Is there any relationship between the NSDC and various state governments to encourage them to key into sugar production?
We have been having a kind of synergy with state governments in the area of land acquisition. You know the sugar industry requires vast expanses of land. And these lands are available in the states. Once such lands are identified, we will approach the various state governments to see if we can convince them to release them to us. And once the lands are released, we will do feasibility studies, prepare report and market such lands to investors. That was the process we used in acquiring the 10 areas where we have done feasibility studies.
Still on investment, is there any relationship between you and other relevant government agencies like the Export Promotion Council?
Yes, the President Muhammadu Buhari administration, and indeed, our mother ministry, the Federal Ministry of Trade and Investment, have been in the forefront of trying to establish a kind of synergy among the parastatals under it. The idea is to work with a common goal. Just recently, the management of the Nigeria Investment Promotion Council visited me, with a view to synergising so that we can achieve the overall objective of the ministry. As you know, the council’s major mandate is to attract investment into Nigeria. What we are doing is to produce more sugar for Nigeria, so we identify areas where they can be of assistance.
We have committees that will help us monitor the implementation of the sugar master plan. One of them is the Sugar Industry Implementation Committee. This is an inter-ministerial committee. The Federal Ministry of Agriculture, Federal Ministry of Water Resources, Federal Ministry of Power and the Federal Ministry of Transport, are represented in this committee. These ministries are also stakeholders in the sugar industry, so we have been working with them to achieve the master plan.
