Nigeria Needs $7.1 Billion Investment For Sugar Self-sufficiency, Says Council

The National Sugar Development Council (NSDC) says Nigeria needs $7.1 billion over 10 years to achieve self-sufficiency in sugar production.

The council’s executive secretary, Kamar Bakrin, disclosed this at a news conference organised for the Commerce and Industry Correspondents Association of Nigeria (CICAN) in Abuja.
Mr Bakrin said the investment would support existing sugar estates, 10 proposed new projects and infrastructure required to expand domestic production.

“This entire programme we are talking about is about $7.1 billion for Nigeria to attain self-sufficiency over a 10-year period,” he added.

“About 70 per cent of the funding, estimated at $5 billion, is expected from long-term debt facilities and development capital,” he said.

According to him, $3 billion will come from export credit agencies, while $1.75 billion is expected from other development finance institutions.

He said another $250 million was projected from local development finance sources, with the remaining $2.1 billion to come from project promoters and operators.

Mr Bakrin said the financing structure was necessary because commercial lending terms were unsuitable for the capital-intensive sugar industry.

“Commercial loans can not finance this sugar sector. That one, I think we know. Also, loans attracting interest rates of between 15 and 28 per cent over five years cannot support the industry’s financing requirements,” he said.

Mr Bakrin disclosed that the council had signed a $1 billion agreement with Chinese group Sinomach for engineering, procurement, construction and financing.

“About $1 billion has been signed with Sinomach, and that will go directly to the estates as soon as we get to financial close,” he said.
He said the council had also developed similar engineering, procurement and construction financing frameworks with Chinese and Indian entities.

Mr Bakrin said the council developed a N10 billion Sugar Project Acceleration Fund with the Bank of Industry to finance feasibility and bankability studies.

He added that the council was working with Afro-Asian Bank and other development agencies to facilitate financing for the programme.

“While I can say that it is not basically NSDC’s job to go and look for the money, we have taken it upon ourselves to aggressively facilitate the sourcing of this funding,” he said.

Mr Bakrin said the council would be assessed on measurable results, including cultivated hectares, sugar production and financing secured for the projects.
(NAN)