BY CHIKA OKEKE, Abuja
The National Sugar Development Council (NSDC) has demanded $7.1 billion to expand domestic sugar production in Nigeria over a 10-year period, just as the intervention would be invested on existing sugar estates, 10 proposed new projects and infrastructure.
This is even as the agency noted that about 70 per cent of the funding, estimated at $5 billion is expected from long-term debt facilities and development capital, while $3 billion will emanate from export credit agencies.
At a news conference organised for the Commerce and Industry Correspondents Association of Nigeria (CICAN) in Abuja, the Executive Secretary of NSCD, Mr Kamar Bakrin informed that the financing structure was necessary as commercial lending terms were unsuitable for the capital-intensive sugar industry.
Bakrin hinted that another $250 million was projected from local development finance sources, even as the project promoters and operators would provide the remaining $2.1 billion.
He said: “Commercial loans cannot finance this sugar sector. Also, loans attracting interest rates of between 15 and 28 per cent over five years cannot support the industry’s financing requirements.”
The ES stated that the council had signed a $1billion agreement with Chinese group, Sinomach for engineering, procurement, construction and financing that would be invested in the estates.
He said: “The initiative will create a pipeline of bankable projects capable of accessing the $1billion Engineering, Procurement and Construction, including the finance agreement with SINOMACH of China,” he added.
The ES informed that NSDC had also developed similar engineering, procurement and construction financing frameworks with Chinese and Indian entities, adding that a $10 billion Sugar Project Acceleration Fund was developed with the Bank of Industry (BoI) to finance feasibility and bankability studies.
Bakrin hinted that the council is working with Afro-Asian Bank and other development agencies to facilitate financing for the programme, adding that NSDC would be assessed on measurable results, including cultivated hectares, sugar production and financing secured for the projects.
While seeking the speedy implementation of the N10 billion Sugar Project Acceleration Fund, he stated that the council is repositioning Nigeria’s sugar industry as a major investment opportunity under the Nigeria Sugar Master Plan, NSMP, 2.0.
The ES noted that Nigeria consumed about 1.8 million tonnes of sugar annually, with about one billion dollars spent on imports, adding that the NSMP 2.0 is targeting the production of about two million tonnes of sugar locally.
Bakrin hinted that the agency does not lack policy but is challenged with the execution of policies, disclosing that the N10 billion Sugar Project Acceleration Fund would finance bigger projects along the value chain.
He noted that the council is also engaging Afreximbank and the Nigeria Governors’ Forum to accelerate sugar estate development nationwide, adding that sugarcane could produce sugar, ethanol, animal feed and electricity, making it an important foundation for Nigeria’s bio-industrial development.
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