{"id":27257,"date":"2025-05-27T23:05:54","date_gmt":"2025-05-27T23:05:54","guid":{"rendered":"https:\/\/nsdcnigeria.org\/?page_id=27257"},"modified":"2025-05-27T23:14:38","modified_gmt":"2025-05-27T23:14:38","slug":"import-allocation-guideline","status":"publish","type":"page","link":"https:\/\/nsdcnigeria.org\/demo\/import-allocation-guideline\/","title":{"rendered":"Import Allocation Guideline"},"content":{"rendered":"\t\t
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\n New<\/span>\n\t\t\t\t\t\t\t\t\t<\/span>\n \n Guidelines and Benchmarks<\/span><\/svg><\/span><\/span> <\/span><\/span>For Raw Sugar Allocation to BIP Operators<\/span> <\/h2>\n \t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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1.0 Introduction<\/h4>

The implementation of the Sugar Backward Integration Programme (BIP) began with the official take-off of the Nigeria Sugar Master Plan (NSMP) in January 2013. Three (3) Refineries were approved as BIP Operators and made to sign formal commitments, detailing a number of indicators by which their performance will be measured.<\/p>

Raw sugar quotas at the concessionary tariff of 5% Duty and 5% Levy were to be allocated to Operators on the basis of\u00a0PERFORMANCE OF THEIR BIP PROJECTS<\/strong>\u00a0and as an incentive to encourage Operators to plough back profits into their BIP projects. The concessionary tariff was to last for 3 years in the first instance. Operators\u2019 performance was to be assessed by two Committees set up by the NSMP:<\/p>

  • SURMIC<\/strong>\u00a0(Sugar Road Map Implementation Committee)<\/p><\/li>

  • SIMOG<\/strong>\u00a0(Sugar Industry Monitoring Group).<\/p><\/li><\/ul>

    2.0 Performance<\/h4>

    At the end of the First Phase of the NSMP (2013\u20132016), while it can be said that the operators\u2019 performance varied, the general performance was below average at about\u00a040% of projected performance<\/strong>. Overall performance was rated as follows:<\/p>

    • DSR<\/strong>\u00a0\u2013 46%<\/p><\/li>

    • BUA<\/strong>\u00a0\u2013 17%<\/p><\/li>

    • GSC<\/strong>\u00a0\u2013 58%<\/p><\/li><\/ul>

      Although each operator claimed to have committed \u2018huge\u2019 sums to their BIP projects from tariff concessions received since 2013:<\/p>

      • DSR<\/strong>\u00a0\u2013 N101.9 billion out of N170.7 billion<\/p><\/li>

      • BUA<\/strong>\u00a0\u2013 N9.3 billion out of N66.5 billion<\/p><\/li>

      • GSC<\/strong>\u00a0\u2013 N46.1 billion out of N87.4 billion<\/p><\/li><\/ul>

        Only\u00a0GSC<\/strong>\u00a0commissioned a\u00a050,000 tons\/annum sugar factory<\/strong>\u00a0at Sunti, Niger State, in 2016.\u00a0DSR\u2019s progress was barely fair<\/strong>, while\u00a0BUA\u2019s performance was poor<\/strong>\u00a0after 4 years of BIP implementation.<\/p>

        This state of affairs is\u00a0unacceptable<\/strong>\u00a0and has led to opposition from government agencies (Ministry of Finance, CBN) against continued NSMP implementation, particularly the concessionary tariff and quota allocation regime. The key issues are:<\/p>

        • Past quota allocation\u00a0was not strictly based on BIP performance<\/strong>.<\/p><\/li>

        • The incentive\u00a0was not effectively utilized<\/strong>\u00a0to improve BIP implementation.<\/p><\/li><\/ul>

          A\u00a0radical review<\/strong>\u00a0of the BIP strategy and reward\/sanction regime is\u00a0imperative<\/strong>.<\/p>

          3.0 NMSP Mid-term Review<\/h4>

          Originally scheduled for\u00a0November 2017<\/strong>, the Mid-Term Review (MTR) was held earlier on\u00a01st June 2017<\/strong>\u00a0due to below-average performance. Operators submitted revised BIP commitments for\u00a02018\u20132023<\/strong>, with the following aggregated deliverables:<\/p>

          • Number of project sites<\/strong>: 8 (DSR \u2013 3; BUA \u2013 2; GSC \u2013 3)<\/p><\/li>

          • Total land area<\/strong>: 187,000 ha<\/p><\/li>

          • Estate cane fields<\/strong>: 137,070 ha<\/p><\/li>

          • Outgrower farms<\/strong>: 25,850 ha<\/p><\/li>

          • Sugar production target<\/strong>: 1,550,524 MT<\/p><\/li>

          • Jobs creation (seasonal, farm & factory)<\/strong>: 65,805<\/p><\/li><\/ul>

            To ensure effective implementation and address concerns, the following guidelines will apply:<\/p>

            4.0 New Guidelines<\/h4>
            4.1 Quota Submission<\/h5>

            Operators must submit quota requests for the following year in\u00a0December<\/strong>\u00a0of the preceding year.<\/p>

            4.2 Allocation Criteria (Effective 2018)<\/h5>

            • 2017 Allocation<\/strong>: Last based on old criteria (market share\/refinery capacity).<\/p><\/li>

            • From 2018<\/strong>: Allocation\u00a0strictly based on quantitatively verified BIP performance<\/strong>.<\/p><\/li><\/ul>

              4.3 Monitoring<\/h5>

              • SURMIC & SIMOG<\/strong>\u00a0will conduct\u00a0quarterly monitoring<\/strong>.<\/p><\/li>

              • Reports will be sent to Operators, NSDC, and the Honourable Minister (FMITI).<\/p><\/li><\/ul>

                4.4 Key Performance Indicators (KPIs)<\/h5>
                Key Performance Indicator<\/strong><\/th>Weight<\/strong><\/th><\/tr><\/thead>
                Total Land Developed\/Target for the Year (Ha)<\/td>1<\/td><\/tr>
                Total Land Under Cane\/Target for the Year (Ha)<\/td>2<\/td><\/tr>
                Sugar Produced (Tons)\/Target<\/td>3<\/td><\/tr>
                Jobs Created (Nos)\/Target<\/td>2<\/td><\/tr>
                Additional Development at BIP Site<\/td>1<\/td><\/tr>
                Contribution to Self-Sufficiency Goal<\/td>1<\/td><\/tr><\/tbody><\/table><\/div>

                Priority<\/strong>: Local sugar production and job creation carry the highest weights.<\/p>

                4.5 Harmonized Performance Review<\/h5>

                • SURMIC & SIMOG<\/strong>\u00a0will hold a\u00a0joint review in October<\/strong>\u00a0each year.<\/p><\/li>

                • Harmonized reports will guide quota allocation.<\/p><\/li><\/ul>

                  4.6 Presidential Approval<\/h5>

                  • Next year\u2019s quota requests will be submitted for\u00a0Presidential approval by early December<\/strong>.<\/p><\/li><\/ul>

                    4.7 Performance-Based Allocation<\/h4>

                    • Operators failing to meet targets will receive reduced quotas proportional to their performance scores.<\/p><\/li><\/ul>

                      4.8 Excess Quota Utilization<\/h5>

                      • Operators with excess quota may sell or expand capacity as they deem fit.<\/p><\/li><\/ul>

                        4.9 Revised Tariff (2017\u20132020)<\/h5>

                        • 10% Duty + 5% Levy<\/strong>\u00a0(subject to review).<\/p><\/li><\/ul>

                          5.0 Sanction for Poor BIP Performance<\/h4>

                          • Operators failing to meet targets will face\u00a0quota reductions<\/strong>\u00a0proportional to their performance scores.<\/p><\/li><\/ul>

                            6.0 Sanction for Sugar Quota Infringement<\/h4>
                            6.1 Excess Importation Penalty<\/h5>

                            • Excess imports will be charged at\u00a0full NSMP tariff<\/strong>\u00a0(not concessionary rates).<\/p><\/li><\/ul>

                              6.2 Duty Payment Before Discharge<\/h5>

                              • Erring operators must\u00a0pay penalties before unloading cargo<\/strong>.<\/p><\/li><\/ul>

                                6.3 Additional Sanctions<\/h5>

                                • NSDC may recommend further penalties for non-compliance.<\/p><\/li><\/ul>

                                  7.0 Guidelines for New Entrants<\/h4>

                                  New investors must:<\/p>

                                  • Submit a\u00a0minimum 100,000 tons\/annum<\/strong>\u00a0development plan.<\/p><\/li>

                                  • Achieve\u00a0at least 40% progress<\/strong>\u00a0(field & factory) to qualify for quotas.<\/p><\/li>

                                  • Non-investors (end-users\/logistics firms) must import through existing operators.<\/p><\/li><\/ul>

                                    8.0 Government Intervention Required<\/h4>

                                    To address challenges in Adamawa, Taraba, Jigawa, Kebbi, Kwara, and Niger States:<\/p>

                                    8.1 Land Allocation<\/h5>

                                    • FMITI will engage the\u00a0National Economic Council<\/strong>\u00a0to resolve land issues.<\/p><\/li><\/ul>

                                      8.2 Flooding & Infrastructure<\/h5>

                                      • Collaboration with\u00a0Water Resources, Works, Power, Housing, and NERC<\/strong>.<\/p><\/li><\/ul>

                                        8.3 Community Sensitization<\/h5>

                                        • National Orientation Agency (NOA)<\/strong>\u00a0will lead awareness campaigns.<\/p><\/li><\/ul>

                                          8.4 Corporate Social Responsibility (CSR)<\/h5>

                                          • Operators must expand\u00a0outgrower schemes<\/strong>\u00a0and CSR initiatives.<\/p><\/li><\/ul>

                                            8.5 Inter-Agency Collaboration<\/h5>

                                            • Service Level Agreements<\/strong>\u00a0will be signed under\u00a0Executive Order 01<\/strong>\u00a0for seamless coordination.<\/p><\/li><\/ul>

                                              FMITI\/NSDC<\/strong>
                                              JUNE 2017<\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                                              At the end of the First Phase of the NSMP (2013-2016), while it can be said that the operator\u2019s performance varied, the general performance was below average at about 40% of projected performance. Overall performance was rated as follows: DSR \u2013 46%, BUA \u2013 17% and GSC \u2013 58%. \u00a0And even though each operator is claiming to have committed \u2018huge\u2019 sums of money on their BIP projects from the amounts that accrued from Tariff concessions received since 2013 (DSR \u2013 N101.9billion out of N170.7billion, BUA \u2013 N9.3billion out of N66.5billion, and \u00a0GSC \u2013 N46.1billion out of N87.4billion), apart from GSC which commissioned a 50,000 tons\/annum sugar factory at Sunti, Niger State in 2016, progress by DSR was barely fair while BUA\u2019s performance was poor, after 4 years of BIP implementation. This state of affairs is unacceptable. It has, as can be expected, resulted in some opposition by relevant government agencies, particularly Ministry of Finance and CBN, to the continued implementation of the NSMP, particularly the concessionary tariff and the sugar quota allocation regime, as presently implemented, because it is believed the country is not getting enough value for the tariff concession to Operators and the restriction of importation to few qualifying participants. The bane of the current strategy is that past quota allocation has NOT BEEN STRICTLY BASED ON BIP PERFORMANCE and the incentive has NOT BEEN UTILISED EFFECTIVELY IN GETTING OPERATORS TO IMPROVE PERFORMANCE IN THEIR BIP IMPLEMENTATION. A radical review of the entire BIP strategy as well as the entire reward and sanction regime of the NSMP is IMPERATIVE.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

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