Alhaji Dangote, Chairman of Dangote Sugar Refinery Plc, submitted a petition to the Minister of Industry, Trade and Investment, Niyi Adebayo, against BUA International Limited, owned by Alhaji Abdul Samad Rabiu, with respect to the establishment of a sugar plant by BUA in the Port Harcourt Free Trade Zone. Dangote is not alone. He has a co-petitioner in the person of Mr. John Coumantaros, Chairman of Flour Mills Nigeria Plc.

The crux of the Petition was that BUA is being accused of breaching the National Sugar Master Plan (NSMP), thereby posing a threat to the Nigerian local sugar industry. The NSMP is a strategic roadmap developed by the National Sugar Development Council (NSDC) for the attainment of self-sufficiency in sugar production in Nigeria.

The particulars of breach as alleged by Dangote and Flour Mills Nigeria are that BUA has failed to invest substantively in local production of sugar or comply with its undertakings under the Backward Integration Programme (BIP). The BIP is a mandatory policy as contained in the NSMP. It is defined in the Plan as “An import substitution strategy adopted by import-dependent countries to rapidly domesticate production of commodities for which they at least possess comparative advantage and/or whose continued importation is considered inimical to the continued well-being of the country.”

Explaining the BIP Policy, Ronald Adamolekun stated:

The Nigerian government through the regulator, NSDC, has mandated sugar companies to not just build refineries and process imported sugar extract, but invest in developing the supply side — namely, sugar cane plantations. This is expected to reduce Nigeria’s import-dependence, stimulate the economy, create jobs and support the Naira.

Dangote and Flour Mills Nigeria claims that “With the new refinery, the country’s refining capacity goes from 2.75 million metric tones to 3.4 million metric tones per annum, or from 170 percent over capacity over last year’s import quota to over 210 percent capacity.”

Therefore, the issue is that Dangote and Flour Mills Nigeria fear that “BUA intend only on importing and refining raw sugar whilst claiming to be investing in developing sugar plantations in order to qualify for quotas to import raw sugar.”

Both complainants submits that BUA is undermining the NSMP and that “The choice of location and the publicity campaign behind the investment has been deliberately engineered to provoke public sentiment and put the Federal Republic of Nigeria against its people.”

Dangote and Flour Mills Nigeria wants BUA penalized by heavy levies or a possible shut down of the Port Harcourt refinery.

Looking at the above, one would be tempted to conclude that Dangote and Flour Mills Nigeria are so much interested in the full development of the sugar industry for the benefit of Nigeria. But far from it. There is definitely an underlying business interest which is often the priority of companies like Dangote and Flour Mills Nigeria.

BUA in responding to the allegations confirmed that the company secured the approval of the Federal Government for its Port Harcourt refinery and that the agitation of Dangote and Flour Mills Nigeria are driven by their alleged monopolistic cravings and desire to control the price of sugar with the ultimate aim of price increase.

Regarding the BIP, BUA explains that it is mindful of the Plan and in proof, it claims to own a 720,000 metric tonnes refinery (in Lagos); and a 20,000-hectare Lafiagi Sugar Project. The sugar refinery in Port Harcourt was said to be for export purposes only.

Conclusion

It is important that the NSDC looks into the issues raised by Dangote and Flour Mills Nigeria notwithstanding the counter-accusations of BUA. No entity should be permitted to undermine the NSMP in any way. It has already been noted that the NSMP suffers some implementation challenges. The claims should not be brushed aside. It may appear to be a battle between Nigeria’s “Sugar Daddies” but the interest of the nation remains paramount.

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