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Questions Over N17Bn Sugar Fund

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There are concerns over the utilization of billions of naira collected as 10 percent sugar imports levy in the last five years.
Official data obtained from the Nigeria Customs Service (NCS) through the Freedom of Information (FOI) law shows that N16.7 billion was earned as levy on imported sugar between January 2011 and December 2015.

The National Sugar Development Council (NSDC) which regulates the sugar production, marketing, importation and enforcement of relevant industry standards in the country said over 1,000 farmers have benefited under the scheme funded from the sugar levy in the last three years in 14 sugar producing locations in Nigeria.
However, sugarcane farmers across the states said they have never enjoyed ‎any form of loan or grants from the government under any guise since their formation till date.
Also, Daily Trust findings have shown that the concessionary low tariffs to enhance local sugar production approved in January 2013, by the federal government is far from meeting the 2018 target.
Nigeria’s sugar demand has risen to about 1.5million metric tons while local production has stagnated.
It was found out that between January 2011 and December 2015, the total value of sugar import had risen to N249 billion, the official data shows.
Analysis of the data shows that sugar import kept rising from N10 billion in 2011 to N13 billion (2012), N83 billion (2013), N88 billion (2014) and N80 billion (2015).
In its response to Daily Trust’s FOI request, the council’s deputy director public affairs Ahmed M. Waziri said the council doesn’t control the sugar fund account.
“The sugar levy account is domiciled with the Central Bank of Nigeria (CBN) and is being controlled by the office of the Accountant General of the Federation (AGF) who is the signatory to the account,” he said.
Backward integration policy
The concession to improve local production and reduce import was granted to Dangote, BUA and Golden Sugar companies that had signed a Backward Integration Programme (BIP) commitment with the federal government in which the money saved from the concession would be invested in their farms where they can source sugar locally.
Under the BIP, BUA acquired the Lafiagi Sugar Company Lafiagi, in Kwara State, Dangote got the Savannah Sugar Company in Numan, Adamawa state, while Flour Mills of Nigeria set up the Sunti Golden Sugar Estate in Niger State.
The target is that by the year 2018; the three companies will be able to produce 700, 000 metric tons of sugar sourced locally from their farms.
So far Dangote has achieved 48.8 percent in implementing the agreement, Golden Sugar 42.7 percent and BUA 8.5 percent, according to the sugar council.
The BIP agreement ended in December last year, but it has not met half of its target.
However, an official of the council said efforts are being made to renew the concession agreement which is generating oppositions from other sugar stakeholders.
‘Make BIP transparent’
Speaking to Daily Trust by telephone, President of Sapele Chamber of Commerce, Industry, Mines and Agriculture, Mr. David Iweta said the federal government’s decision to issue sugar license to three companies was wrong.
He said the minister of trade and investment at the time did not allow for transparency in the whole process.
He urged federal government to review the case and make it open and competitive.
“The three companies alone can compromise on the price of sugar in Nigeria which is not helpful to the economy; rather it will lead to monopoly and price dictation,” he said.
‘1,000 farmers benefited’
The NSDC said it has implemented an out – grower program, which runs across all 14 sugar producing locations in Nigeria.
The out-grower program will deliver inputs and credits to cooperatives at a lower interest rate of seven percent compared to the prevailing financial market lending rates of up to 28 percent or more.
The council is using Bank of Industry and Bank of Agriculture to administer the facilities to farmers across the country.
The council said over 1,000 farmers have benefited under the scheme funded from the sugar levy in the last three years. And they are cultivating about 1,000 hectares of sugarcane.
We are neglected – Farmers
The chairman of Sugarcane Farmers Association in Sokoto State, Alhaji Umaru Jikan, said sugarcane farmers have never enjoyed ‎any form of loan or grants from the government under any guise since their formation till date.
“There have been lots of promises in the past such as loans schemes and building of sugar factory but we have not enjoyed any,” he told Daily Trust in Sokoto.
As a result of this, “our members are fed up with the government. That is why most of them no longer honour our invitations to the association’s meetings.”
A sugarcane farmer in Kwara state, Abdullahi Paki told Daily Trust that he and his colleagues have never received any form of loans or extension services from the government whatsoever.
He said the sugar farmers have been completely neglected. “The government and other relevant stakeholders should include sugarcane farmers in their agricultural policy plan,” he said.
The acting chairman of Jigawa state chapter of Sugarcane Farmers Association, Idris Mai-anguwa Jaga said there was never a time that any assistance in monetary terms had come to them either from government or any other organization.
On backward integration programme, he said sugarcane farmers in the state were never aware of it.
He said there was need for the federal government to review the entire programme for the benefit all because at present the programme was ineffective.
Another sugarcane farmer from Jahun  local government area of the state, Dahiru Mohammed Harbo  said nobody among the farmers had ever heard about sugar levy much less to benefit from it. “We don’t benefit from it and we do not know anything about it,” he said.
It is slush funds
On the utilization of the sugar fund, the executive director of the Civil Society Legislative and Advocacy Centre (CISLAC) Auwal Musa Rafsanjani said a situation where government agencies would spend their IGR was unacceptable.
He said to nip such in the bud, government must take decisive action that would not only ensure remittance but also curb corruption in the system.
“As we are aware that some government’s institutions have claimed they spend their Internally Generated Revenue on operations.
“We must also begin to be conscious of financial recklessness and mismanagement of the internally generated revenue when the so-called institutions are being provided with budgetary allocation to effectively discharge their mandates,” he said.
He said government must avoid situations that would pave the way for mismanagement and diversion of the public funds “through some unrealistic claims.”
“Given the nation’s encounters on corruption and financial mismanagement, it would be important at this point in time for any ministry, department and agency to clearly articulate its financial needs for operation in its annual budget and adhere to it, not by spending internally generated revenue,” he said.
He said for such measures to be achieved, there should be strict compliance to the recent guidelines by the federal ministry of finance regarding budgeting, revenue and expenditure aimed at ensuring that MDAs remit revenue and generate operating surpluses, “which by law ought to be credited to the Consolidated Revenue Fund (CRF).”

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