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Nigeria’s sugar industry, valued at an impressive $2 billion, is heavily dependent on refining imported raw sugar, a practice that largely overshadows local production.
This revelation was made by Mr Kamar Bakrin, the Executive Secretary and CEO of the National Sugar Development Council (NSDC).
Bakrin highlighted the urgent need for the country to reduce its dependence on imported sugar and pivot towards strengthening domestic production.
To address this, the NSDC is set to launch ambitious plans focused on commercial sugar farming and an out-growers program, expected to be rolled out next year.
The proposed program seeks to tap into Nigeria’s substantial agricultural potential, providing new employment opportunities and boosting economic growth. This shift could ultimately position Nigeria as a regional leader in sugar production and self-sufficiency.
During a press briefing in Lagos, Bakrin outlined the NSDC’s strategic approach, which includes promoting investment opportunities both locally and internationally. The Council also intends to de-risk new ventures, commonly referred to as “Greenfield projects.” Planned support mechanisms include offering project design guidance, facilitating land clearing, and enhancing capacity in farm mechanization, all geared towards strengthening the viability and appeal of local sugar investments.
Bakrin urged potential investors and stakeholders in Nigeria’s sugar industry to reconsider their perceptions of the sector.
With the NSDC facilitating over $5 billion in new investment, there are increasing incentives to participate in Nigeria’s backward integration initiatives. At the heart of this push lies an unmet local demand of two million metric tons annually, with projections that the sugar deficit across Africa could surge to 13 million metric tons by 2030.
This growing demand, coupled with vast potential, provides fertile ground for Nigeria to step up as a significant sugar producer on the continent.
Bakrin also pointed to the numerous untapped opportunities in sugarcane derivatives, which have applications beyond sugar production.
By-products of sugarcane can be transformed into biofuels, polymers, bioplastics, and even sustainable aviation fuels, while excess biomass can be used for power generation.
Globally, sugarcane is a major economic driver, providing livelihoods to more than 100 million people across 120 countries. Investment in sugar production not only supports rural employment but also drives improvements in infrastructure, utilities, and local services, benefiting communities far beyond the initial farming operations.
Nigeria’s natural resources position it favorably to achieve these ambitions. The country boasts 800,000 hectares of arable land suitable for sugarcane cultivation, primarily situated in secure regions close to vital water sources.
These geographic and environmental factors, combined with an abundant human resource base, underscore Nigeria’s readiness to transition into large-scale commercial sugar production. Unlike more mature sugar-producing countries, Nigeria has a young, dynamic workforce that can meet the sector’s labor demands, creating a compelling investment case.
Government support further amplifies the sector’s appeal. As Bakrin noted, the Nigerian government offers incentives to facilitate the development of sugar projects. These incentives are especially pertinent given Nigeria’s rapidly growing population, which currently increases at a rate of 2.4 per cent annually and is projected to reach 411 million by 2050.
To meet the surging domestic demand for sugar, bolstered by a rising population, it is crucial for the country to prioritise local production.
“The global industry is well-developed and technical expertise can be very easily deployed to support all aspects of the development of new projects. There are integrated farm management teams providing plug and play solutions.
“Unlike other mature sugar producing countries, Nigeria has an abundance of human resources to provide the required workforce for the sugar sector,” he disclosed.
The Backward Integration Policy (BIP) incentivizes investors through preferential treatment in import duties. BIP investors pay the Economic Community of West African States (ECOWAS) Common External Tariff (CET) of 10 per cent, plus an additional 5 per cent levy.
Meanwhile, non-BIP investors face a heftier import duty structure, comprising a 10 per cent duty and a 60 per cent levy. Moreover, the NSDC grants annual import quotas to BIP investors based on their commitment to backward integration, helping to balance the need for imports while building domestic capacity.
This policy framework is bolstered by the codification of the National Sugar Master Plan (NSMP) into law, ensuring investor and consumer protection while promoting long-term stability in the sector.
In summary, Nigeria’s sugar industry is at a transformative juncture. With proactive government policies, vast agricultural potential, and the strategic drive from the NSDC, Nigeria has a unique opportunity to shift from dependency on imported sugar towards a robust, self-sustaining sugar production system.
If successful, these efforts could make Nigeria a model of industrial development and agricultural self-sufficiency, serving both domestic needs and potentially the broader African market.
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