The fight for the soul of the Nigerian sugar market and the issues surrounding it



Recently, social media has been saturated with letters from the country’s major sugar refiners, addressed to the Honorable Minister of Trade and Investment, Otunba Niyi Adebayo. The content of these letters depicts an ongoing war of attrition over control of the national sugar market between these major players, namely Dangote Group and BUA Group. Flour Mills of Nigeria, third in the row, is on the same side as Dangote Group, against the latter’s longtime rival, BUA Group.

MM. Aliko Dangote of Dangote Industries Limited and John Coumantaros of Flour Mills of Nigeria, Plc, petitioned the federal government through the Ministry of Trade and Investment for alleged sabotage of the Nigerian sugar master plan by the refinery in BUA sugar. This violation is committed by expanding its sugar refinery in Port Harcourt, Rivers State, against its quota of imported raw sugar, without commensurate investment in the Upstream Integration Program (BIP), such than covered by the provisions of the Nigerian Sugar Master Plan (NSMP).

The Upstream Integration Program (PIF) is a provision of the NSMP. In 2013, the Nigerian government launched an initiative called the Nigerian Sugar Master Plan (NSMP). The essence of the plan is to provide a comprehensive roadmap that would galvanize both government and sugar industry stakeholders to help the country achieve self-sufficiency in sugar production. It aims to improve local sugar production in the country by one hundred percent, both in raw materials such as sugar cane and its by-products.

While this local sugar production capacity is being developed, the government will continue to grant quotas for the import of raw sugar to be refined in accordance with verifiable evidence of investment in local production on the basis of the sheet. NSMP route. But it appears that some stakeholders are preferring the continuous and endless importation of raw sugar for refining, rather than devoting the energy and investments necessary to make Nigeria self-sufficient in sugar production over the next several years. It is akin to liking the quick payoff to invest for the long term at the expense of the economy.

In the hierarchy of priority products, the federal government considers sugar the third most important product, after rice and wheat. It is this premium on sugar that motivated the drafting and approval of the NSMP to ensure: self-sufficiency in the local production of sugar, ethanol, animal feed, the increase in production capacities of electricity, employment, etc.

Unfortunately, some industry players are still looking for ways to cut costs and sabotage this plan for selfish ends and against national aspirations. MM. Aliko Dangote and John Coumantaros accused the BUA sugar refinery of violating the provisions of the NSMP via a voluntary letter signed by the duo and addressed to the Honorable Minister of Trade and Investment, Otunba Niyi Adebayo.

Instead of the Minister investigating the allegations raised by the petitioners, he wrote a letter asking the BUA group to respond to the allegations instead. The BUA group, through its chairman, Alhaji AbdulSamad Rabiu, responded to the letter with counter charges against the duo of Dangote Group and Flour Mills of Nigeria. He further said the duo wanted to frustrate BUA’s sugar refinery in Port Harcourt just to continue the unhealthy duopoly, fixing prices and creating an artificial shortage to milk Nigerians.

I think the whole crisis smacks of the flagrant failure of the regulatory authority. The minister in the midst of this saga, Otunba Niyi Adebayo and the National Sugar Development Council (NSDC) – the authorities mandated to regulate the sector, have failed miserably in their primary responsibilities to provide oversight leadership in the sector.

Two major players in the sugar industry, MM. Aliko Dangote and John Coumantaros have written a joint petition against another major industry trader, BUA Sugar Refining, in place of the Minister of Trade and Investment to investigate the authenticity of the allegations through National Sugar Development. Council (NSDC), he incompetently wrote a letter to the accused asking him to “respond”. What exactly did the minister expect the BUA sugar refinery to say: guilty of the charges? It’s laughable.

Instead of the minister and NSDC officials going to the BUA sugar refinery in Rivers State to verify the level of violation alleged in the petition, he sat in his office without action. Hon. Otunba Niyi Adebayo literally contracted out his regulatory work to BUA Sugar Refinery, when he asked the Company to write a reply, without doing due diligence as a regulator. It is the catalyst that exacerbated the crisis.

Supposedly confidential letters of official correspondence were leaked to the media. What Trade and Investment Minister Otunba Niyi Adebayo would have solved by exercising his constitutional regulatory mandate has been transferred to the court of public opinion. Why copies of the letters began to fly on social media, the Minister and his office have remained silent. Dragging its feet on such an important national issue amounts to economic sabotage and official laxity.

Where are the easy-to-do deals so much promoted when simple business disputes like these are handed over to social media commentators for judgment? Imagine one of the telecom operators like GLO petitioning the Minister of Communications against MTN’s alleged rule violation. And instead of the minister through the Nigeria Communications Commission (NCC) investigating the allegations, he asks MTN to “respond”. This is a regulatory failure on the part of the Hon. Otunba Niyi Adebayo.

However, assuming but not admitting that BUA’s counter-allegations against the duo of Dangote and Flour Mills are true, does this validate its own violation of the Nigerian sugar master plan? can two wrongs create a right? Did BUA write a petition against Dangote and Flour Mills when it discovered they were setting prices and creating an artificial shortage?

BUA alluded to the fact that the company is fighting the duopoly of Dangote and Flour Mills of Nigeria in the sugar market, when in reality this frustrates the efforts and vision of the federal government to make Nigeria self-sufficient in the production of sugar. sugar, by sabotaging the desire for local production.

It is beyond my imagination that a company more interested in importing raw sugar for refining; a business approach that weakens our local productive capacity, puts pressure on the nation’s strained foreign exchange and denies Nigerians new job opportunities, creates the mistaken impression that it is fighting for the masses against price fixing and the arbitrary increase.

Between Dangote, Flour Mills and BUA, which really fights for Nigerians: the BUA group which promotes endless importation by pretending to invest in local production capacity or the Dangote group which discourages indefinite importation by enriching local production capacity? And it was even Dangote and Flour Mills who caught the attention of a sleeping regulator, but the supposed arbiter is still undecided as the crisis continues.


Comments are closed.