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Fresh $3 billion investment to boost Nigerian sugar market

Additional N3 billion injected into the Nigerian sugar industry will yield positive returns and become another success story, BusinessDay has learnt.

‘’With regard to Sugar, progress is being made and it will take some time, but we believe it will be another success story since $3 billion has been invested into the sector,’’ said Mohammad Badaru Abubakar, president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture(NACCIMA) stated in an interview with a cross section of journalists in Lagos.

Riding on the back of backward integration, the Nigerian sugar market has attracted about $3 billion investment from   local and international investors. The investment represents funds used for expansion of production capacity to meet current and future consumption, according to Latif Busari, executive secretary, National Sugar Development Council(NSDC).

A breakdown of the figure showed that Dangote Group is leading with a  fresh investment of $2 billion on projects in six states to produce about 1.5 million metric tons. It is also planning to expand its Savannah Sugar from current 6,500 hectares(ha)  to 21,000 ha by 2018 to produce 100,000 tonnes sugar annually. HoneyGold Group, on the other hand,  is to invest $300 million on two sites in Adamawa state to produce 200,000 tonnes sugar annually.

BuisessDay learnt that  Crystal Sugar Mills is spending $30 million to expand its operations to produce 60,000 tonnes sugar/annum by 2018 from its recently acquired 1,500 TCD Sugar plant at Hadejia, Jigawa state, while Confluence Sugar Company is investing $240million in Kogi State to produce 200,000 tonnes per sugar/annum on about 37,000 ha of land at Ibaji.

Backward integration has also pushed up the cement sector, making the country the largest manufacturer in the Sub-Saharan Africa. Abubakar said this showed that with  synergy with the  private sector, the government would always get it right.

On small businesses, NACCIMA chief attributed high mortality rate to poor enabling environment, financial mismanagement, lack of basic business capacity (knowledge, skills attitude) as well as non-recruitment of qualified personnel resulting in poor record keeping, especially accounting books.

‘’Low capacity to invest in Research and development(RD), Information and Communication Technology(ICT) E-commerce, including lack of standardization of products. Limited access to markets are critical factors,’’ he stated, adding that the Agricultural Transformation Agenda of the Federal Government could not be sustained in a tense atmosphere with insecurity presently witnessed in the North.

He lamented challenges faced by members of NACCIMA, who are critical part of the Organised Private Sector(OPS) to include  poor/decay infrastructural facilities, worsening state of insecurity, late release of budgets, among others.

‘’Highly politicized environment in which business and economic activities are pursued, resulting in some conflicting polices/goals that affect optimal efficiency in service delivery and advocacy pursuit; and inability to effectively engender closer Chamber-Government relation as desired in representing and lobbying for the interests of our members,’’ he added.

He therefore prescribed increase in power generating capacity from 4000mega watts to 10,000, efficient transport system, effective and efficient security system through collaboration with NACCIMA and private securities agencies, among others.

‘’The timing of our budgets such as crafting, submission to the legislators for discussion and subsequent signing into law by the president and presentation to the nation require serious attention. A neat budget should reach the president in November while every ministry, department, and agency should receive their release in December to enable them start implementation in the ensuing year,’’ he added.


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