CBN Restricts Sugar Importation To Dangote, BUA, FMN
- Says the three firms have made reasonable progress in backward integration
The Central Bank of Nigeria (CBN) yesterday stated that sugar importation in the country can only be done by Dangote Sugar Refinery Plc, Golden Sugar Company, owned by Flour Mills of Nigeria Plc and BUA Sugar Refinery Limited.
The central bank disclosed this in a circular dated July 16, titled: “Sugar Importation in Nigeria,” signed by the Director, Trade and Exchange Department, CBN, Dr. Ozoemena Nnaji, a copy of which was posted on the regulator’s website yesterday.
The CBN hinged its reason for selecting the aforementioned sugar manufacturers on the fact that the three companies had made reasonable progress in achieving backward integration in the sector.
The Federal Government of Nigeria under the National Sugar Development Council established the Nigerian Sugar Master Plan to encourage and incentivise sugar refining companies in their Backward Integration Programme (BIP) for local sugar production.
Accordingly, the underlisted three companies, who have made reasonable progress in achieving backward integration in the sector, shall only be allowed to import sugar into the country.
In view of the foregoing, the central bank stressed that authorised dealers “shall not open Form ‘M’ or, access foreign exchange in the Nigerian foreign exchange market for any company, including the three listed above for the importation of sugar,” without its prior or express approval.
It reiterated that it is charged with the mandate of monitoring the implementation of the backward integration programmes of all the companies in the sector.
Nigeria’s National Sugar Master Plan (NSMP) was designed to attract over $1 billion annually in local and foreign direct investments and create an estimated 107,000 jobs over the first ten years.
Its aim is to raise local production of sugar, to enable the country attain self-sufficiency; stem the tide of unbridled importation; create huge number of job opportunities and contribute to the production of ethanol and generation of electricity.
Additionally, the plan estimates that demand for sugar would have reached the 1.7 million metric tonnes (MMT) mark by 2020. Therefore, in order to achieve this, the NSMP estimates that the country would need to establish some 28 sugar factories of varying capacities and bring about 250,000 hectares of land into sugarcane cultivation, over the next 10 years. The bulk of this investment is expected to come from private investors.
The justification for the sugar sector road map, among other factors, stemmed from the huge amount the country was spending annually on sugar importation; that significant investments had been made in developing sugar refineries, all of which were then relying on imported raw sugar; and poor complementary investments in sugarcane plantations.
Justin Nwosu is the founder and publisher of Flavision. His core interest is in writing unbiased news about Nigeria in particular and Africa in general. He’s a strong adherent of investigative journalism, with a bent on exposing corruption, abuse of power and societal ills.