New Telegraph

Flood threatens N157bn sugar investment

BOOST

 

Government has slammed 75 per cent levy on refined sugar in 2020 to boost production

 

 

As demand for sugar in Nigeria is on the increase, over N157billion investment by local FIRMS under Backward Integrated Programme (BIP) is being threatened by flood. It is projected that the country would need 1.7 million metric tonnes to meet local consumption. As part of efforts to boost local production, government had introduced 20 per cent import duty and 75 per cent levy on refined sugar this year.

 

Also, raw sugar quotas at the concessionary tariff of five per  cent duty and 5 per cent levy were allocated by the National Sugar Development Council (NSDC) to operators on the basis of performance of their BIP projects.

 

It was gathered that part of the incentives to boost domestic production of sugar include: a five-year tax for investors in the value chain; 10 per cent import duty and 50 per cent levy on imported raw sugar; 20 per cent duty and 60 per cent levy for imported refined sugar. However, findings by New Telegraph revealed that domestic production by sugar firms had decreased by 6.25 per cent from 80,000 metric tonnes to 75,000 tonnes per cent since 2019 due to lack of infrastructure to meet local demand.

 

It was learnt that the country had been finding it difficult to achieve its target since 2013 because of lack of infrastructure and other challenges. Mostly affected recently is Sunti Golden Sugar Estate (SGSE), owned by Flour Mills, which has suffered some disruptions to its operations as floodwater breached its sugar estate. According to the Company Secretary, Umolu Joseph A, the floods were as a result of the long rainfalls recorded recently at the northern and central parts of the Niger basin.

 

He stressed that the floods were triggered by severe downpours at the Sokoto Rima basin, forcing the Kainji and Jeba dams to witness upsurge in the lateral flow of water. U

 

molu added that the company had suffered some disruptions to operations, as the resulting high inflows in the downstream Niger River caused a breach to the extensive and properly designed dyke systems at Sunti Golden Sugar Estates (SGSE). The company secretary feared that the development might delay the expansion project geared towards increasing the area under cultivation to 4,000 hectares by mid-2021.

 

It would be recalled that In January 2013, three refineries were approved by NSDC, under BIP and operators were made to sign formal commitments, detailing a number of indicators by which their performance would be measured.

 

Presently, Nigerian Ports Authority (NPA)’s shipping position indicated that two ships have arrived at Lagos Port this week to offload 96,500 metric tonnes of raw sugar. At Greenview Development Nigeria Limited (GDNL), Kirana Naree arrived with 46,000tonnes, while Genco Brittany is laden with46,500tonnes.

 

Already, a total of 194, 050 tonnes had been discharged by four vessels at Apapa Bulk Terminal Limited (ABTL) and Greenview Nigeria Development Limited (GNDL) last month. SBI Bravo ofloaded 49,000tonnes, Almasi, 46,400tonnes and Genco Provence, 46300tonnes have been moored at GDNL, while Desert Hope discharged 52, 350tonnes at ABTL of the port.

 

In June, 2020, a total of 138, 115 tonnes of the commodity was ferried by three vessels to Lagos Port complex, with Hinoki laden with 46,900tonnes; Spar Mira, 46,500 tonnes and Aruna Ece, 44,715 tonnes.

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