Sugar

Why government limits sugar importation to BUA, Dangote, Flour Mills ─CBN

*The Central Bank of Nigeria says the tree companies have made reasonable progress in achieving backward integration in the sector of the country’s economy

Isola Moses | ConsumerConnect

For making reasonable progress in achieving backward integration in the sector, the Central Bank of Nigeria (CBN) has disclosed it is restricting importation of sugar into the country to BUA Sugar Refinery Limited, Dangote Sugar Refinery Plc, and Golden Sugar Company, which is owned by Flour Mills of Nigeria Plc.

Ozoemena Nnaji, Director of Trade and Exchange Department of the CBN, in a statement Friday, July 16, 2021, affirmed that the three firms “have made reasonable progress in achieving backward integration” in the sugar sector in Nigeria.

Central Bank of Nigeria Headquarters, Abuja, FCT

Backward integration refers to a situation when a company expands its role to fulfill tasks formerly completed by businesses up the supply chain.

It is noted that the concept can be used to measure how much a company has invested in the development of a sector in the economy.

Nnaji stated: “The Federal Government of Nigeria under the National Sugar Development Council established the Nigerian Sugar Master Plan to encourage and incentivise sugar refining companies in their Backward Integration Programme (BIP) for local sugar production.

“Accordingly, the underlisted three companies, who have made reasonable progress in achieving backward integration in the sector, shall only be allowed to import sugar into the country.”

The CBN Director of Trade and Exchange Department further stated that in view of the foregoing, “authorised dealers shall not open Forms M or access foreign exchange in the Nigerian foreign exchange market for any company, including the three listed above for the importation of sugar without the prior and express approval of the Central Bank of Nigeria as the bank is charged with the mandate of monitoring the implementation of the backward integration programmes of all the companies.”

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