Nigeria’s drive towards industrialisation has met several headwinds as the country aims at self-sustainability. Last week, Nigeria’s Minister of State for Industry, Trade and Investment, Aisha Abubakar, said that the federal government plans to attain self-sufficiency in sugar production had hit 20 percent implementation level.

Nigeria is the largest sugar importer in sub-Saharan Africa. The country currently spends about $500 to $600 million annually on sugar importation to satisfy her domestic and industrial needs.  Nigeria also consumes about 1.5 million tonnes of sugar annually. According to the minister, 30,000 hectares of land are being cultivated in Nigeria by the three major players – Dangote Sugar, Bua Refinery Ltd and Golden Sugar Co.

The Executive Secretary of the National Sugar Development Council, Mr Latif Busari said, “If we are able to implement the master plan as projected, we should be looking at producing about 1.79 million metric tonnes of sugar between 2020 and 2023 which is also what is projected to be our demand about that time.”

In 2013, the International Sugar Organisation put Nigeria’s total sugar production at 30,000 tonnes. In 2016 so far, the total output is estimated at 14,000 tonnes. This is a huge disparity from Nigeria’s estimated target to be completed within the next seven years.

The potentials of the sugar industry are very high for Nigeria. Mr Busari said that Nigeria could produce 161 million litres of ethanol, and generate over 117, 000 jobs for the economy. He further said Nigeria could save $350 to $500 million annual on foreign exchange and possible generate an additional 411 megawatts of electricity.

The oligopolistic nature of Nigeria’s market nature and lack of antitrust policies has led to very few companies benefitting from the government’s industrial policies. In the cement industry, two companies, Dangote Cement and Lafarge Africa Plc. account for 90 percent of cement sales in Nigeria. Likewise, the wheat market, only three companies control 75 percent of the market revenue.  This has limited the growth of social inclusiveness and led to an almost non-existent middle class in Nigeria.

The market potentials for the sugar industry are immense, but the industry is yet untapped, probably because of the huge capital requirements. Incentives should be created to attract investors and loans should be easily accessible to individuals or companies who want to invest in this industry. The Central Bank of Nigeria’s recent decision to retain the monetary policy rate at 14 percent has made it tougher to enter this industry. Policies like this need to be reviewed to attract more local entrepreneurs to enter into these industries.

We must definitely acknowledge the role of the existent companies driving growth within the country. Rather than depend on only these few companies to achieve this plan, more investors should be encouraged to enter into the industry to help promote growth, increase revenue potentials and achieve the country’s sugar sufficiency plan.

Kindly listen to the podcast below:


Elsewhere on Ventures

Triangle arrow