‘CBN’s decision on Dangote, BUA, Flour Mills in line with sugar master plan’
As a reagent in sanitising the consumer goods sector in the Nigerian economy the Federal Government recently appointed ZACCH ADEDEJI as the executive secretary of National Sugar Development Council (NSDC). In this interview with select journalists, Adedeji talked about the achievement of the NSDC so far. OSA VICTOR OBAYAGBONA brings the excerpts:
How do you hope to make the NSDC a prominent government agency, as some say there is not much achievement in the last few years?
It will be very unfair to say the agency has not achieved much before my advent. One of the greatest assets we have at the NSDC today is the Master Plan put in place by the agency. The Agency has succeeded in stopping the importation of refined sugar. The country was spending heavily on the importation of refined sugar hitherto to meet its consumption, which has now grown to 1.7 million metric tons. Through the instrumentality of the plan put in place by the agency, Nigeria now has a combined local production capacity that is about twice that.
The NSDC, thereafter, selected those who can achieve backward integration programme (BIP) to add value to the raw sugar being brought in. This has led to the creation of hundreds of thousands of jobs for Nigerians working in the three local refineries.
So, NSDC has done very well in increasing the country’s sugar refining capacity. That is the starting point. Today, the country does not import refined sugar. We only import raw sugar, which is refined in the refineries set up by the operators in the country. The focus now is our backward integration programme, which we are now running. So, the same energy we displayed in putting a Master Plan in place is being devoted to the backward integration programme.
But I think every stakeholder agrees that we could do much better in terms of our attainments and this is what we are aggressively trying to address. The Master Plan itself has very noble objectives which, taken together, could make sugar a very important job and wealth creator for Nigeria. So, those that conceived the plan really had the best intentions. However, the key to a plan is in its implementation.
Since I assumed office, I have been trying to understand and address the constraints to progress. These constraints include availability of suitable land, hostility among some host communities, financing and infrastructure. For example, sugar grows under quite specific conditions and requires a considerable amount of water. So, just having land is not enough. The land must have the correct topography and also have adequate water via irrigation. Then there must be provision of infrastructure to enable mechanised farming to be conducted.
There has been controversy in the sugar sector, especially with the recent dispute between Dangote and BUA, and allegations of predatory pricing. How have you been able to douse this potential tension?
My view is that as a regulator, we are ultimately the champion of the consumer. As I indicated earlier, the Sugar Master Plan is set up to attain certain clear objectives that are in the best interest of the Nigerian people. These include: stable pricing, job creation through backward integration, conservation of foreign exchange and value enhancement. So, in terms of disputes in the industry, our role is to enforce the provisions of the Nigeria Sugar Master Plan.
Where a dispute affects the attainment of the Master Plan, it becomes our concern. Our yardstick on resolving disputes is the Master Plan and this was how we engaged with the parties in this instance. The truth is that there is a lot of room for improvement across the sector and this is our focus. We are playing catch up, so infighting creates a distraction. In the final analysis, the entire sector has a long way to go and we need all hands on deck, working collaboratively to ensure that we meet our objectives.
What is your take on the CBN announcing that sugar importation should be restricted to Dangote, BUA and Golden Sugar? As some feel this is empowering a few that can fix prices to the detriment of the economy.
First, let me clarify that what the CBN has done is very much in tune with our Master Plan. At the beginning of the implementation of the Master Plan, there are conditions set for those wishing to participate in the BIP (Backward Integration Programme). One of the conditions is for them to have a verified plan to produce sugar locally. The three companies you mentioned are those who have committed huge investments into the plan by setting up refineries with a minimum refining capacity of 100,000 metric tons for each of them and they have also keyed into the BIP.
Sugar importation is based on a quota, which is issued under the terms of our Master Plan to any company that can produce a minimum of 100,000 metric tons of sugar locally. What CBN has done is to link our Master Plan progress to entitlement to forex at an official rate. These three companies you mentioned have, in compliance with the Master Plan, been allowed some incentives and concessions to encourage their investments in local sugar production. As a regulatory agency, NSDC is charged with measuring and reporting on this progress to ensure that they continue to meet the conditions for those incentives. We have reinvigorated that monitoring process to ensure that incentives are only granted to those that meet the conditions in terms of their attainment of the Master Plan objectives, especially with regard to backward integration. Progress must be measurable and we have communicated this clearly to all.
At NSDC, we actually want as many operators as possible to key into the scheme, because this will enhance local production and create thousands of jobs. Our target is to have more of such operators. We are actively working with a number of smaller players to help them get to the 100,000 MT target as quickly as possible.
From my background in Procter & Gamble, where we produce products with lots of competitors I know that competition spurs excellence and innovation. Ultimately, this is very good for the consumer by lowering prices and increasing choice. It is also good for the companies themselves. So, I expect CBN to widen this list, as more operators key into the scheme. Don’t forget that local production is our primary focus. So, importation should be a temporary state of affairs to supplement until local production can meet our needs. The quantity imported should reduce over time.
You were recently appointed Executive Secretary of the National Sugar Development Council (NSDC) by President Muhammadu Buhari, can you tell us about yourself, your career and the journey so far at the NSDC?
I am from Iwo Ate in Ogbomosho area of Oyo State. I got my first degree in Accounting from Obafemi Awolowo University (OAU), Ile Ife, where by the grace of God I attained First Class honours. I qualified as a Chartered Accountant of the Institute of Chartered Accountants of Nigeria and I later completed a Master’s degree in Accounting from OAU. More recently, I have completed executive education programmes at Harvard Kennedy School of Government.
In terms of my career, I have worked in the consumer goods sector for most of my working life. I spent seven years at Procter & Gamble. I had joined the company’s graduate programme and I rose to become corporate finance manager for West Africa and I was in charge of Accounting, Treasury and Internal Control. By 2011, I had risen to become the head of corporate finance and it was at this point that I answered the call of civic duty, and I was appointed commissioner for finance in Oyo State under my father and mentor, Late Abiola Ajimobi, by the grace of God, at the age of 33 years.
As commissioner of finance, I was able to introduce several reforms that helped to reposition the finances of the state. Since leaving the Oyo State government, I have been consulting for multi-nationals in the fast-moving consumer goods sector. I am very humbled by my nomination by the minister of trade industry and investment, Niyi Adebayo, and to President Muhammadu Buhari for approving my appointment as the executive secretary, National Sugar Development Council.
You are one of the youngest appointees of the administration and the sugar industry is dominated by big players who wield massive influence. How will you cope with these influential and dominant players in the industry?
Well, at 43, I am not really so young. I have over 20 years’ experience and much of my experience is in the fast-moving consumer goods sector where I have operated at very senior levels, negotiating with and advising multinationals and managing multi-million dollar projects. So, it is a sector that I am very familiar with and I am conversant with the challenges and the opportunities. My public sector experience means I fully understand the workings of government and how to get the best from the public service, which is very critical to the success of the agency.
My view is that, as a regulatory agency, the National Sugar Development Council’s most important asset is a framework underpinned by the law. This framework must be understood by all stakeholders, and this is what I have set out to do. Personalities become less important when all players know where the agency is heading, what is expected of them and of course the consequence for infractions or non-performance. Our vision is to achieve self-sufficiency in local sugar production by expanding the number of players in our backward integration programme. So, the focus is not on individuals. What is important is the result because the result is what will deliver a positive impact to the public.
What have you been able to do in the short term you have been in office and what do we expect?
One of the key reforms we have introduced is to bring in external resources to support our monitoring. We see monitoring as the key to attainment of the objectives of the Master Plan. It will allow us to truly measure progress and to take corrective action, if any player is not meeting their commitments. So, each operator has to submit a quarterly plan and we monitor progress against each milestone.
But the wider vision is to deepen the industry and this will involve attracting investments and overcoming some of the constraints. Already, we are interfacing with the state governments on areas that have been identified as suitable for sugar cultivation to ensure release of land and provision of infrastructure. These states are Nasarawa, Kwara, Adamawa, Oyo, Niger, Taraba, Ondo, Sokoto and Bauchi.
We are also working with the Nigeria Ports Authority (NPA) and the Customs to try and ensure that equipment needed by our operators get out of the ports on time, avoiding congestion. This is because sugar cultivation is time-sensitive and delays in harvesting can result in losses to our farmers, which can discourage them. Finally, we are working with CBN to arrange a single digit funding that will support investment in the sector.
From our analysis, strict implementation of the Nigeria Sugar Master Plan will create thousands of jobs in our rural areas and in the wider value chain such as logistics, marketing and even in technical areas. This is why we are very determined to ensure that we achieve our objectives. We have all the incentives in place to encourage major investment in this sector and there is no reason that, just like what has been achieved in cement, we cannot become self-sufficient and eventually export. It will take a lot of hard work but we think it is doable.