Gimme Some Sugar


Nigeria’s sugar industry has an established history but has never reached the extent of development that might have been expected. First established in the 1960s, the industry only supplies enough […]

Nigeria’s sugar industry has an established history but has never reached the extent of development that might have been expected. First established in the 1960s, the industry only supplies enough raw material to meet 2% of the nation’s demand. Recognizing the need for further development, the Nigerian government directed the National Sugar Development Council (NSDC) to create a plan to achieve self-sufficiency, creating a new source of jobs, reducing food insecurity, and even boosting the nation’s energy industry.

Nigeria has natural resources that make its goal of raising sugar production entirely attainable. Its ample arable land, fresh water supply, and temperate weather conditions allow it to support sugarcane plantations in all parts of the country. Nigeria has the largest sugar refinery in Africa, but has few milling plants and as such has to import much of the raw materials needed to meet demand. The country’s current sugar refining production of around 14,000 tons puts it well behind South Africa (2.1 million tons), Egypt (2 million), and Sudan (710,000), the three largest African producers. In contrast, it consumes more than 1.5 metric tons a year, up from 442,867 tons in 1995. Demand has surpassed supply to the point that Nigeria is now the third-largest importer of sugar in the world, its 1.57 million metric tons (mmt) per year behind only Russia (2.52mmt), the US (2.37mmt), and the EU (2.01mmt). The cost of this import, most of which comes from Brazil, is around USD500 million per year.

Fully aware of the social and economic costs of such low production, the Nigerian government created the NSDC to work toward achieving self-sufficiency. The crop’s ubiquity across industrial sectors and potential to create hundreds of thousands of jobs means this is a key issue for the country’s continued industrial development. The third most-important commodity in the country after rice and wheat, sugar’s use in activities such as manufacturing soft drinks and pharmaceuticals means that it is needed for far more than household consumption. To meet the nation’s supply needs, the Nigerian Sugar Master Plan (NSMP) was created in 2012 to create a path to national sugar self-sufficiency.

Nigeria’s leading sugar company is Dangote Sugar Refinery, which operates one of the five-largest refineries in the world. Its capacity of 1.44mmt per year makes it the epicenter of the Nigerian sugar industry, but further work is needed to boost crop production to the levels needed to meet this capacity. Part of the NSMPs core mission is to start a Backward Integration Program, which will increase raw material production and limit the industry’s reliance on imports. Dangote Sugar currently has 7,000ha of sugarcane under cultivation and plans to begin cultivation on an additional 33,000ha in the coming months, allowing it to increase sugar output to 700,000 tons by 2021. Falling oil exports and instability in some cane growing regions have hurt the ability to begin new cultivation in some points; however, the government has offered financial incentives including tax breaks and credits to attract producers. The African Development bank has also agreed to help with funding and is currently working on finalizing a USD1 billion loan for Nigeria to assist with investment.

Increasing sugarcane production would reap benefits on multiple fronts. Dangote plans to employ an additional 250,000 Nigerians due to new investments in sugar, oil, and concrete, which is just a fraction of the potential labor gain to be made from increased sugar production. The sector has the potential to become a source of employment for both skilled and unskilled labor, making it central to the continued growth of the Nigerian economy. There are also energy gains to be made as well; Nigeria seeks to increase its supply of renewable energy, and ethanol and other biofuels obtained as a byproduct from sugarcane are highly energy efficient and generate low emissions. Boosting cane production could reap dividends for the energy industry, which would in turn result in lower costs for sugar producers. When fully enacted, this virtuous cycle could transform Nigerian industry. Pretty sweet.

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