OLSO: The Central Bank of Nigeria (CBN)’s anchor borrowers’ programme is billed to improve sugar production in the country by 12.5 per cent this year, New Telegraph has learnt.
However, the country will still rely on 1.6 million tons of sugar from Brazil, Thailand and United States in 2018 to meet local demand.
The imports are expected to gulp N201.6 billion ($560 million) as the global price of the commodity is $350 per tons.
According to National Sugar Development Council (NSDC), importers would pay 80 per cent levy, 10 per cent duty for raw sugar, 20 per cent duty and 85 per cent levy for refined sugar from January, 2018.
Currently, Nigeria is the ninth largest importer of raw sugar in the world. However, with the introduction of CBN’s anchor borrower, the council said importation would go down by 2019.
The anchor borrowers’ programme is a CBN policy aimed at increasing Nigeria’s agricultural production output while at the same time improving capacity utilisation of integrated mills and other related industries. The programme was initiated by the apex bank to reduce food imports, create more jobs and diversify the nation’s economy.
Through the CBN’s anchor borrower project, domestic sugar production has been projected at 80 million kilogrammes (80,000 tons) in raw value, leading to 12.5 per cent increase compared to 70,000 tons estimated production in 2017.
It was gathered that Nigeria’s infrastructure challenges and limited government support have led to high cost of domestic sugar production when compared to imported brown sugar.
Current average yield of refined sugar per ton in the country remains at approximately 10 per cent.
It is estimated that the sugar appetite of Nigeria’s food processors’ that produce soft drinks, bread, confectionery and related products would continue to grow.
Inability the Federal Government to boost local production by 200,000 metric tons every year has led to importation of 2.65million metric tons of raw sugar from Brazil.
It would be recalled that in 2017, the country spent N347 billion ($963.9 million) on raw sugar importation in the first six months.
Also, Nigeria depends on Brazil for annual importation of $500 million brown refined sugar. Between January and March, 2017, Brazil exported 1.29 million tons of raw sugar valued $501 million; also a total of 1.3 million tons of the commodity worth $463.9 million were delivered between April and June, 2017 to Nigeria.
Currently, the country has not been able to meet 65 per cent of its target because of high cost of manufacturing refined sugar.