The Federal Government has introduced new guidelines and benchmarks for raw sugar allocation for operators in the sector.
The Executive Secretary of the National Sugar Development Council (NSDC), Dr Latif Busari, made this known in a statement in Abuja, and said that the measure was to improve performance of operators of Backward Integration Programme (BIP).
In the statement by the council’s Senior Information Officer, Mr Yunusa Abdullahi, Busari said in the guidelines, operators would be required to submit their requests for sugar allocation for any year in December of the preceding year.
He added that 2017 allocation would be the last sugar allocation based on the old criteria, including market and share refinery capacity.
According to him, as from 2018 allocation shall be strictly based on quantitatively verified improvement in performance.
Busari, however, added that Sugar Roadmap Implementation Committee (SURMIC) and Sugar Industry Monitoring Group (SIMG) would be expected to conduct quarterly monitoring of all BIP projects.
He said that outcome of each monitoring would be forwarded to all operators with copies sent to the council and to office of the Minister of Industry, Trade and Investment.
According to him, the Key Performance Indicators (KPIs) for assessing and scoring BIP performance shall be the quantity of land developed and target for the year.
Other indicators, he said, would be mill development and factory operation, sugar produced in tons and jobs created for the year.
Busari said that to ensure compliance, government would put in place sanctions for poor BIP performance.
“Any operator that fails to achieve performance target for the year, based on BIP commitments as released by the Joint Harmonisation meeting, shall be penalised for poor performance, with reduction in quota commensurate with performance scores. Scores by operators shall be in percentages and an operator shall be allocated the exact percentage of its score in the year’s projected allocation,’’ he said.
Busari said there would be sanctions for quota infringement by any of the BIP operators.
He explained that any operator who abused allocated quota through excess importation would pay for the excess sugar imported, calculated on the extant tariff indicated in the Nigerian Sugar Master Plan (NSMP).
“Erring operator must pay the duty penalty for excess importation before it can be allowed by the Nigerian Customs Service to discharge its raw sugar cargo. The council reserves the right to recommend additional sanction if the above appears not effective in ensuring compliance. It is hoped that these measures, if adopted and strictly implemented, shall bring some sanity to the implementation of the sugar BIP programme and enhance the performance of operators,’’ Busari said.
According to him, the Federal Government had, following the official take-off of the NSMP in January, 2013 began the implementation of the Sugar Backward Integration Programme.
He said that three refineries were approved as BIP operators and were made to sign formal commitments detailing a number of indicators by which their performance would be measured.
“As part of the arrangement, raw sugar quotas at the concessionary tariff of five per cent duty and five per cent levy, was to be allocated to operators on the basis of performance of their BIP projects. It will also act as incentive to encourage operators to plough back profits to their BIP projects,’’ Busari said.
He added that the concessionary tariff would last for three years in the first instance, and that operators’ performance would be assessed by two special committees – SURMIC and SIMOG – set up by the NSMP.