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…mulls forex restriction on sugar, wheat import

Dangote invests $500m in sugarcane farm

Sugar and wheat may be the next food items to be included in Central Bank of Nigeria’s foreign exchange (forex) restriction list, CBN Governor, Mr. Godwin Emefiele, disclosed yesterday in Awe Local Government Area of Nassarawa State. Emefiele made the position known while touring the 60,000 hectares sugarcane plantation cultivated by Alhaji Aliko Dangote in Nassarawa State. The project’s total value is put at between $480 million and $500 million, and is billed for full production in the next two years.

The CBN governor, accompanied by Dangote, Nassarawa State Governor, Alhaji Abdullahi Sule; Minister of Industry, Trade and Investments, Otunba Niyi Adebayo, and prominent traditional rulers of the state, toured the project site. Emefiele lauded Dangote for keying into government’s backward integration in sugar policy.

“Visiting a site like this with 60,000 hectares of land, we can say it is a very big project. It is incomparable to anyone we’ve seen. This one is four to five times bigger than a sugar project in Sunti, Niger State, commissioned by Mr. President about two years ago.

It is important we thank the state government for providing the land. By the time this factory kicks off, it will create jobs for the people of the state and increase their revenue. It is going to improve the economic viability of the state,” he said.

On what the apex bank’s interest is in the project, the CBN governor said: “Our interest as CBN is that we spend $600 million to $1 billion importing sugar into the country annually. In line with the pronouncement of Mr. President that we should produce what we eat, we are saying Nigeria can produce sugar and be self-sufficient in food production.

“This is something that we should support. That is the reason we’ve decided to give credence to the backward integration projects of the Federal Government. We’ve seen that this location is well suited for the project and some of the equipment are already here.” “We will provide not only the naira or some of the naira because Dangote is a big man and has equity he’s contributing to the project. And, of course, he needs the dollars to import some of the needed equipment. Hopefully, within the next two years, we will provide that support.

That is our interest here to reduce reliance on importation.” Going forward, Emefiele said the forex restriction policy of CBN would be extended to sugar. “Let me say this, we are looking at sugar and wheat. We started a programme on milk about two years ago. Eventually, these products will go into our FX restriction list. We just want to see to what extent we see the traction that is coming from those who are currently importing these items. “We are putting their feet on fire to say that we must all work together to produce these goods in Nigeria rather than import them.”

On how much CBN was funneling into the project, he said: “We have made up our mind on how much we’ll put. But, of course, as you heard from Dangote, the project is worth about $500 million. If you convert that to naira, you know how much that is.

“I know he’s going to commit some equities to it. From there, we will determine what the shortfall is and we will come in through intervention through the banks for whatever loan that is required for this. “Of course, foreign currency will be provided as long as it is for the importation of equipment for the project through the banks, for whatever loans that is required for this as long as it is for importation of equipment and we will gradually begin to restrict foreign exchange to those who want to import sugar until we achieve this result.” In his remarks, Dangote said the sugar farm was projected to growing one third of Nigeria’s sugar consumption, which is about a million tonnes. “We have 60,000 hectares of land here in Awe, Nasarawa State, with a prospect of growing up to one third of Nigeria’s sugar consumption, which is almost a million tonnes. “What we have right now will produce over a hundred. First investment we have is about $480 million to $500 million. That is what we are doing now and that is why you see everybody here. All the stakeholders are here; the governor of the state, CBN governor, minister, etc.

“The CBN will provide us the support just as he has been providing us the support to make it a reality. We’ve a very good relationship with the community and stakeholders. This project, as you can see, will produce a lot of jobs and, as a matter of fact, we have to bring a lot of people outside of this area into the project to help in terms of employment. “We are talking about thousands of jobs, direct and indirect jobs, more than 150,000 jobs,” he said.

Giving an insight into associated potential derivable from the projects outside of sugarcane, he said it was capable of providing electricity to the community. “It has quite a lot of potential. We will also do power generation and ethanol from sugar. To the state, if this place is up and running, I do not think there will be shortage of power in Nasarawa State,” he said.

“We will be having excess of 90mw of power. It’s quite substantial. We must also thank the government for the sugar master plan, which is a very good policy that encourages us to do this kind of backward integration. “It is not just for us to make money from the sugar refinery, but also boost economy,” he said. Describing Emefiele as not just governor of CBN, he said he was a developmental governor, “because he is not just looking at the monetary policy, he is also looking at what he can do to support the naira like this sort of initiative.

“He has a problem today meeting up with the demands of import. Supporting projects like this, going forward, the naira in your hands will be very strong. We have quite a lot that we’re doing here. I’m sure when you come back next year, you would see massive transformation.

“Expect production in two years’ time because sugar project is in phases. By next year, we will have 60,000 hectares and with that, we will be feeding the factory and it will be easier for us to double our capacity because we already have the base.” On project capacity, he said, “we are targeting about half a million tonnes, but right now, we’re talking about 250 million tonnes and that is worth about N450 billion. The CBN governor doesn’t only want to support the naira, but ensuring that jobs are created. “You can only create the 100 million jobs target of the Federal Government through this kind of project. We have no reason not to succeed. The CBN governor is here and he is ready to provide us all the support.”

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