Shortly after Dr Latif Busari was appointed as the Executive Secretary of the Nigeria Sugar Development Council, the Federal Executive Council at its 37th meeting held on September 19, 2012 approved the implementation of the Nigeria Sugar Masterplan.
The plan contains fiscal and investment specific incentives designed to stimulate and attract new investors to the industry in order to increase local sugar production and reduce the nation’s dependence on imports.
In this interview with THE COMMERCE AFRICA, the former Executive Secretary spoke on steps taken under his leadership to achieve the objectives of the Nigeria Sugar Masterplan. EXCERPTS…
The National Sugar Master Plan, crafted by administration, has been adjudged by the industry players as revolutionary given the landmark achievements, what are these achievements?
The major achievement is that all the moribund government-owned sugar companies that were privatized are now being managed by serious investors who are resuscitating and putting them back in operation. The old Savannah Sugar company now belongs to Dangote Group and after completing a 3,500 tcd upgrade, have embarked on a 6000 tcd expansion that would see the company producing 85,000 tons/annum sugar as from this year.
The old Sunti Sugar now belongs to the Flour Mills Nigeria Ltd who have established a 3,500 tcd plant to produce 50,000 tons/annum sugar. The plant was commissioned by President Muhammadu Buhari in May, 2018. The old Lafiagi Sugar now belongs to the BUA Group who has almost completed the installation of 10,000 tcd factory to produce 150,000 tons/annum sugar and 100,000 LPD of ethanol.
But for COVID-19 pandemic, both the Numan and Lafiagi factories were expected to be commissioned in 2020. The fourth old sugar mill at Bacita which is indeed the premier sugar factory in Nigeria, now has a new core investor, KIA Africa Group whose post-acquisition development plan that Sugar Council is reviewing shows that factory test-running will be conducted in the 4th quarter of 2023 and commercial production will begin in 2024.
In addition to these, there are several new sugar projects that are also currently being implemented or will come as second phases to the ones mentioned earlier. Among them are the Tunga Sugar Project owned by Dangote Group that in its first phase will produce 180,000 tons/annum sugar beginning from 2024, the Nasarawa Sugar Project owned by Flour Mills that will produce 170,000 tons per annum by 2025, the Great Nigeria Agribusiness Ltd, project (owned by Lee Group) that will produce 75,000 tons/annum to be commissioned in 2023 and the additional project by BUA Group in Shonga, Kwara State, that will bring in additional 90,000 tons/annum sugar by 2024.
So, when you aggregate all these projects implemented through the NSMP, Nigeria should look towards well above 1 million metric tonnes of sugar per annum between 2023/24. We did not quite hit the 1.7 mmt target set out in the plan but given all the challenges the operators have had to face; I think Nigeria did quite well in achieving the lofty goals of the NSMP.
But besides the main goal of sugar production are the accompanying employment generation of over 40,000 jobs and the savings in forex that will also come with reduction in importation of sugar at least by almost 1mmt.
How do you encourage MSMEs participation in the sugar industry?
MSMEs are involved at several segments of the sugar/sugarcane value chain. The industry encourages local farmers to form cooperatives and engage in the out-grower schemes around all sugar estates. They will produce cane and supply to the mills. The operations of these out-growers are partially funded by the Council. Some of the out-grower groups are trying to acquire mini mills to process their own sugarcane. Then we also have sugar cubing/packaging companies who buy refined sugar from the major mills and cube or package.
The NSMP has seen over eight new brands of local sugar come into the market some of which are owned by the sugar packaging companies. At least two of them McNichols and Dogan’s Sugar have received loans from the Council to expand production.
What are your major concerns for Nigeria sugar industry?
One of my main concerns is still the attitude of communities to the release of land for large-scale sugar projects and the frequent requests for land compensation even when there are evidences that compensation had been paid. These had often led to communal resistance and agitations. Yet we need fairly large expanse of land for large-scale agricultural projects like sugar.
A second critical concern has to do with sourcing of forex by our operators to bring in machineries needed to complete most of the on-going projects. The truth is that without forex all the carefully laid out plans especially on the completion dates of the projects may not materialize.
My third worry is that the operators themselves have to help this country develop local technical capacity in the industry, instead of relying on imported technologies. For instance, they need to patronize the services of the Biofactories for their seed cane needs. This has so far not been the case. Sugar Council or government can only facilitate, the operators need to do more to own the industry and develop it to the enviable status we all desires.
Would you put on record the achievements of your administration in terms of infrastructure development, staff welfare and human capital, efforts at attracting investment to the industry and PPP initiatives?
This is a loaded question that will take me a lot of time or space to really deal with. I will just mention an example or two on each point. We at NSDC see the establishment of the Biofactories and the recent Nigeria Sugar Institute as infrastructural pillars that the industry need for a sustainable future. NSI will provide the R&D back-up and technical manpower that would drive the virile sugar industry of our dream. It’s commercial units like the Biofactories and analytical laboratories will provide services and products that are needed by the industry, all utilizing cutting-edge technologies.
Recently in the wake of the negative impact of the COVID-19 pandemic and the need to mitigate it, government approved 10,000ha drip irrigation infrastructure intervention to be shared among BIP operators across 6 sites. This N28bn infrastructure intervention to be sourced by NSDC at single digit loan through the CBN is directly aimed at rapid increase in sugarcane yield and sugar production by the BIP operators.
In terms of attracting private investments, this had been herculean probably because of the nature of the industry and the nature of our investment environment. It is a capital-intensive sector with a long gestation period. Few investors have appetite for this sort of investment when compared with trading or investing in government bonds. Then the security situation in the country at least as perceived by the outside world and the problems experienced in accessing some incentives that should be easily available, have also not helped matters.
We do not have much PPP initiatives in the industry except if you mean in an informal way or at the very low end of the value chain where a few state or local governments can support local farmers financially to establish mini sugar plants. Informally, government provides the enabling environment that will make it easy for the private sector to do business. This is the commonest business model especially at the higher level of the industry.
Now coming into the Sugar Council, this question may also be interpreted to be referring to the Council when you asked about staff welfare and the like. I think over the past few years we have tried to provide a very conducive environment for Council Staff to work.
First, we ended Council’s migrant status by acquiring our own office buildings after severally moving from one rented or borrowed accommodation to another for several years. And we tried to equip the offices with all the tools that staff needed to do un-interrupted work including solar/inverter power for back-up. Most of our operations in Finance, Human Resource Management and Procurement have also been digitalized leveraging on modern software’s to do their jobs in a more transparent and efficient manner.
At a point in 2008/9 most of Council’s vehicles bought since 1993 were down and unserviceable. Today and since the commencement of NSMP implementation which requires a lot of monitoring, we had no such constraint. Then of course we had some increase in staff salaries and gave all staff including drivers several opportunities for training and skills development every year.
Staff promotions are now based on merit and excellence and not just on spending so many years on a position. I believe all these have boosted staff morale, enhanced productivity and encouraged them to want to do more.
So much so, we decided in 2019 to subject our management systems to certification under the QMS ISO 9001: 2015 standards. But for COVID-19 lockdown when many staff had to stay at home for several months in 2020, we would have received our ISO certification by now.
Specifically, what would you like to be remembered for by your staff and the industry players as your last tenure comes to an end?
That’s simple. I just want to be remembered by both groups as someone who came and tried to change the narratives, as far as sugar production in the country is concerned. Incidentally, this is the title of the compendium we just published, “Changing the Narratives” which chronicles our modest efforts in trying to achieve our statutory mandates, in the face of challenges that in most cases, are not well known or appreciated by the general public.