The federal government has raised the alarm over continuous sabotage of its economic policies by local business conglomerate, BUA group. The regulatory body charged by the federal government to see to the transformation of the sugar industry in the country from one dependent on massive importation to an integrated producer of the essential commodity, the National Sugar Development Council (NSDC), which made the claim, said some companies especially BUA had flouted the terms and conditions for obtaining a three-year low tariffs for sugar importation into the country.
The Executive Secretary of the council, Dr. Abdullatif Demola Busari, said in January 2013, that the federal government approved concessionary low tariffs of 5 per cent duty and 5 per cent levy for raw sugar imports for three companies including the BUA Group as against the 5 per cent duty and 70 per cent levy contained in the National Sugar Policy.
The Executive Secretary said though the high tariffs for refined sugar import into the country was deliberately designed to discourage importation and encourage local production of sugar, the concession became necessary in order not to hike the local price of the commodity since the country has not achieved self-sufficiency in sugar production yet.
He noted Nigeria still depended on sugar importation to meet 90 per cent of local consumption, which led to the plea by stakeholders that if sugar is to be imported at that high tariff, the cost of sugar will be prohibitive. The concession was then given to Dangote Group, BUA Group and Golden Sugar companies all of who had signed a Backward Integration Programme (BIP) commitment with the federal government in which the money saved from the concession will be invested in their cane sugar farms and integrated sugar processing.
This move was expected to slowly lead to the phasing out of the massive importation of sugar in the medium and long term and transforming the country into one that is self-sufficient in sugar production and consumption. Overall, the target is that by the year 2018, the three of them will be capable of integrated production of 700,000 metric tonnes of sugar sourced locally from their farms.
The purpose of this plan of the federal government is obvious. By maintaining the status quo, the economic activities generated in the process of refining dirty brown-coloured raw sugar imported from Brazil and transforming it into white sugar crystals is only about 5 per cent of the gamut of farm jobs, out grower-farmers schemes, sugar cane suppliers and large numbers workers needed for fully integrated processing of sugar straight from sugar cane harvested locally from Nigerian farms.
The extensive value chain created from fully integrated sugar production is therefore essential for the nation’s economic growth, while the little value addition of sugar refining currently being carried out does not do the economy much good. According to Busari, the NSDC chief executive: “One particular refiner, the BUA group, has not lived up to expectation.
Just about three weeks ago, the Sugar Council had to apply a sanction. The sanction is simple. Recall the concession of 5 per cent levy, 5 per cent duty because you are expected to put the savings back to your BIP and we’ve been monitoring the BIP and nothing has happened in BUA’s investment.” Investigations revealed that the BUA Group’s BIP site in Kwara State has nothing to show for the three years the company enjoyed concessionary low tariffs for sugar imports.
“By now, it supposed to have over 400 hectares of planted sugar cane in the site. It is supposed to have brought in its machineries by now. That is, by March 2015, it is supposed to have imported it’s machineries but nothing like that has happened,” Busari said.