Opinion: How the Sugar Sub-Sector Can be Sweet Again

Date: 2013-04-06

The exploitation of Nigeria's rich potentials in agriculture, solid minerals as well as oil and gas is the major thrust of Nigerian Industrial Revolution Plan being formulated by the Federal Ministry of Trade and Investment. The renewed interest in the three sectors, according to Mr Olusegun Aganga, the Honourable Minister of Trade and Investment, is due to the fact that they possess competitive and comparative advantages for value addition activities which had hitherto not been fully harnessed.

Although agriculture contributes over 40% of the GDP, its full potentials for wealth creation, employment generation and rural industrial transformation have been limited by the export of primary agricultural products to the detriment of the economy. Furthermore, extensive mechanization and large scale agriculture have been lacking. The obvious consequence has been that Nigeria is a net importer of some agro-based commodities like rice, sugar and palm oil all of which can be produced sufficiently for domestic consumption and for export.

In a bid to reverse this ugly status, the Federal Government is pursuing a radical transformation agenda with innovative policies and programmes to attain rapid food security and generate employment with the creation of modern agro-based industries. The Federal Government has identified three crops as very critical to its policy on strategic food security. The crops are rice, wheat and sugar. The importation of these three commodities has constituted a drain on Nigeria's foreign exchange.

While the cassava inclusion policy will address the dependence on imported wheat which incidentally has limited climatic prospects for cultivation in Nigeria, rice and sugar do not have agronomic limitations. Sugar production, for instance, started shortly after independence, but the sector is still largely under-developed, contributes less than three percent of national sugar requirements despite the available human, land and climatic potentials for the commodity. This dismal performance has deprived the country of the huge social and economic benefits derivable from a vibrant sugar industry. Most worrisome is the huge number of employment opportunities that the nation has lost due to poor development of the agribusiness sector. This situation is about to change with the approval of a Nigerian Sugar Master Plan (NSMP).

The Nigerian Sugar Company Bacita, Kwara State, was incorporated in 1961. Production began in 1964 at the first integrated sugar factory in Nigeria. The company attained peak production of 35,000MT in 1973. Unfortunately, production began to decline in the 1980s due to administrative and funding challenges. The second integrated sugar estate, Savannah Sugar Company, Numan, Adamawa State, started production in 1980 with an installed capacity of 50,000MT. It attained 23,000MT in 1991 before it was plagued by poor management, inadequate funding and crippling debt. By the late 1990s, the Federal Government had decided to privatize the two pioneer sugar estates and both were eventually sold to private investors by the Obasanjo Administration.

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