FG unveils $7.1bn sugar plan to cut imports

Nigeria’s $7.1bn sugar programme is a 10-year plan to produce more than two million tonnes yearly. It aims to cut imported sugar, save $2.1bn annually, and create 110,000 direct and indirect jobs.

It combines three approaches: improving existing estates, expanding current operators, and attracting new investors. For example, 10 new estates across eight states will cover 143,478 hectares and produce 835,000 tonnes yearly. They will also make ethanol and electricity, giving projects income beyond sugar sales.

Today, Nigeria consumes about 1.8 million tonnes yearly, but over 97 percent comes from imported raw sugar. The plan targets 1.22 million tonnes from existing operators and 100,000 tonnes from improved mills. It also supports 11,000 hectares of farmer-grown cane, linking farmers with planned buyer agreements and mills. If delivered, Nigeria could reduce imports while strengthening jobs and local supply chains.

Nigeria consumes about 1.8 million tonnes annually, while exact current production is not stated. Since over 97% is refined from imported raw sugar, domestic supply is likely below roughly 54,000 tonnes, if the remainder is local.

At full capacity, the programme targets more than 2 million tonnes yearly. It combines 835,000 tonnes from 10 greenfield estates, 1.22 million tonnes from existing operators, and 100,000 tonnes from improved mills, totaling about 2.155 million tonnes. The projects span 13 projects across eight states.

That output would exceed present demand by roughly 355,000 tonnes. The programme also targets $2.1 billion in annual foreign-exchange savings and 110,000 direct and indirect jobs. However, this is a 10-year target requiring $7.1 billion in financing, not current output.

More than 97 per cent of Nigeria’s refined sugar comes from imported raw sugar because domestic production cannot meet demand. Nigeria consumes about 1.8 million metric tonnes yearly, while local estates and mills have repeatedly missed production targets.

The council points to poor farming practices, inadequate planting materials, weak accountability and projects that failed to attract financing. Large sugar estates need long-term, low-cost funding. Commercial loans can charge 28 per cent and mature within five years. That makes building farms, mills and supporting infrastructure difficult.

The current gap explains the import dependence, but the government has a plan. Its $7.1bn, 10-year programme targets over two million tonnes annually through 13 projects. Ten greenfield estates should produce 835,000 tonnes, alongside expanded operators and improved mills, reducing imports if delivered.

The programme links three groups into one production chain: new estates, established operators, and smallholder farmers. New estates add land and mills, existing operators expand output, while farmers supply cane to mills with guaranteed buyers.

Ten greenfield estates across eight states will cover 143,478 hectares and produce 835,000 tonnes yearly at full capacity. Meanwhile, 11,000 hectares of farmer-grown cane will supply existing mills, with 7,000 hectares already identified in Kwara, Niger, and Adamawa. The first 1,320 hectares should be planted next year, supporting about 88,000 tonnes of sugar.

Existing operators are expected to produce 1.22 million tonnes, while improved mills add about 100,000 tonnes. Together, these efforts aim to exceed two million tonnes annually, above Nigeria’s 1.8 million-tonne demand. The plan also strengthens the chain through seed-cane farms, training, and infrastructure, helping reduce imports and supporting more than one million livelihoods.

Success could save Nigeria about $2.1bn in foreign exchange yearly. Production could exceed two million tonnes, reducing costly sugar imports. That would ease pressure on scarce foreign currency and support jobs across farming, processing, transport, and energy.

The plan includes 10 new estates across eight states, expected to produce 835,000 tonnes annually. These projects could create part of the promised 110,000 direct and indirect jobs, while ethanol and electricity add income. Farmer-grown cane would also supply existing mills, giving growers buyers and helping local businesses earn more.

Today, Nigeria consumes about 1.8 million tonnes annually, and over 97 per cent comes from imported raw sugar. The programme targets 1.22 million tonnes from existing operators and 100,000 tonnes from improved mills. Host communities could see GDP more than double over 10 years, while stronger supply chains support more than one million livelihoods.

Sugar estates are large, slow-to-build projects, so they need patient money rather than ordinary business loans. The NSDC says commercial borrowing can cost 28 per cent, or run around 15 per cent over five years. Those high rates and short repayment periods could make estates unable to repay before production becomes reliable.

For example, the council signed a $1bn agreement with Chinese group Sinomach covering engineering, construction and financing. This structure links technical construction with longer-term project funding, with money expected after financial close. Export credit agencies and development-finance institutions are better suited because they can support major projects over longer periods and at more workable terms.

The programme needs $7.1bn: $5bn in debt and $2.1bn from promoters and operators. Of the debt, $3bn is planned from export credit agencies, $1.75bn from development-finance institutions, and $250m from local development lenders. This financing should help fund 13 projects, including 10 greenfield estates, without placing the entire burden on expensive short-term loans.

Sugarcane becomes several products inside an integrated estate and mill. The cane is crushed to extract juice, which is cleaned, concentrated, and crystallised into sugar. Fibre left after crushing, called bagasse, can fuel boilers and generators, while molasses can be fermented into ethanol.

Large estates and mills matter because they supply enough cane and equipment for continuous processing. They also turn waste into useful energy. For example, the NSDC’s ten proposed estates cover 143,478 hectares and plan 55,500 tonnes of cane daily. At full capacity, they are expected to produce 835,000 tonnes of sugar yearly, plus ethanol and electricity.

Nigeria currently consumes about 1.8 million tonnes of sugar yearly, but over 97 percent is refined from imported raw sugar. The programme combines new estates, expanded operators, and improved mills, targeting more than two million tonnes annually. It also seeks 11,000 hectares of farmer-grown cane, helping existing mills secure supplies and spreading income beyond estate owners.