Sugar war: NPA sides with Dangote against BUA, bans sugar importation from FTZ

Sugar war: NPA sides with Dangote against BUA, bans sugar importation from FTZ

 

Nigerian Ports Authority (NPA) has banned the importation of sugar from free trade zones, thus taking sides with Dangote Industries Limited and Flour Mills of Nigeria Plc in their turf war against BUA Group over control of the refined sugar market.

Recall that the Chairman of Dangote Industries Limited, Aliko Dangote, and his counterpart at Flour Mills of Nigeria Plc, John Coumantaros, recently accused BUA of setting up a sugar refinery in an Export Processing Zone (EPZ) in Port Harcourt, Rivers State, thereby posing a threat to the attainment of the National Sugar Master Plan (NSMP) as well as sustainability of the country’s local sugar industry.

The duo argued that the country currently had enough refining capacity to meet national demand and therefore does not need additional sugar refining capacity. 
In a joint petition to the Minister of Industry, Trade and Investment, Niyi Adebayo, dated January 28, 2021, the duo protested the recent commissioning of the BUA Sugar Refinery.

BUA, however, wrote a counter petition, accusing Dangote and Coumantaros of calling to question the authority of President Muhammadu Buhari’s powers and the diligence of the Ministry of Industry, Trade and Investment.

But in a letter dated April 8, 2021, the Nigerian Ports Authority (NPA) announced a ban on the importation of refined sugar and its derivatives from the country’s free trade zones (FTZs).

This in essence means BUA will not be able to sell its refined sugar from the Port Harcourt refinery in Nigeria.

NPA’s letter to terminal operators in Lagos and Port Harcourt on the matter reads: “It has recently come to our notice that due to the recent location of a sugar refinery in a free trade zone, refined sugar is being imported into the Nigerian Customs territory under the concession granted to enterprises in the free trade zones to export 100 percent of their output to the Nigerian Customs territory, and this is real potential threat to the goals of the Nigerian Sugar Master Plan (NSMP).

“The Nigeria sugar industry is governed by the Nigerian Sugar Master Plan (NSMP). The NSMP provides a framework for motivating investment in the local production of refined sugar by securing the Nigerian sugar market for investors in the backward integration program (BIP).

“Your terminal is hereby informed by this letter that, in order to protect our national interest and ensure the returns in the federal government’s investment in the NSMP are realised, and in line with extant laws and regulations of the federal government of Nigeria, importation of refined sugar and all other sugar derivatives from the free trade zones into the Nigerian Customs territory are here prohibited by the honourable minister, ministry of industry, trade and investment.

“In view of the above, your terminals are by this letter directed to ensure strict compliance with this directive. Please accept as always the assurances of our esteemed regards.”

The letter, was signed by Buba Jubril on behalf of the Port Manager, Lagos Ports Complex, Apapa.

BUA Chairman, Abdulsamad Rabiu, had earlier said that his sugar refinery did not contravene the Nigeria Export Processing Zones Authority (NEPZA) Act or the operations of the Export Processing Zone.

He said, “The same NEPZA Act upon which this project is based, gives the permission to process, add value, and export at the same time. Companies under this act are allowed to process and if they so wish, sell 100 per cent of their production in Nigeria with payment of duties based on the current raw materials tariff.

“As a matter of fact, Aliko Dangote of Dangote Industries, who is one of the complainants alleging and attacking this approval has also applied and obtained the same approval for his refinery project in Lekki, Lagos State where he is currently enjoying the same benefits of being in an Export Processing Zone (EPZ).

“What BUA sugar is doing is legal and within the confines of the law. We have not done nor are we doing anything wrong.”

Rabiu further explained that the EPZ under which its Port Harcourt sugar project is sited went through a rigorous two-year review process before it was forwarded to the Ministry of Industry, Trade and Investment, for approval of President Muhammadu Buhari, adding that the President alone is constitutionally empowered to approve an EPZ licenses.

“Anything that is done to attack this project in any way, form or any guise, attacks Mr. President’s approval and we will do everything to ensure our rights are not trampled upon,” he added.

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