Investment Opportunity
Nigeria's sugar industry is under-developed and despite some investment in recent years, the country is still importing large quantities of sugar. Annual demand for sugar is estimated at around 3.5 million tonnes per annum while local production only have a capacity of 2.4 million tonnes.
Under the common external tariff (CET) there is currently a 50% tariff on the importation of white sugar, and a 5% levy on imported raw sugar. This is to stimulate the refining of raw sugar in Nigeria.
Sugar cane is currently grown in several states in Nigeria. Investors can choose to either plant their own sugar cane or buy from the numerous small-scale farmers.
Incentives
The Nigeria Federal Government and is offering a range of incentives to investment in agriculture and agri-processing. These include:
•Companies in the agro-allied business do not have their capital
allowance restricted. It is granted in full i.e. 100%.
•The payments of minimum tax by companies that make small or no profits at all do not apply to agro-allied businesses.
•Agro-allied plants and equipment enjoy enhanced capital allowances of up to 50%.
•Processing of agricultural produce is a pioneer industry, consequently there is 100% tax-free period for 5 years.
•All agricultural and agro-industrial machines and equipment enjoy 1% duty.
•The Agricultural Credit Guarantee Scheme Fund (ACGSF), administered by the Central Bank of Nigeria, guarantees up to 75% for all loans granted by commercial banks for agricultural production and processing.
•The Interest Drawback Program Fund provides a 60% repayment of interest paid by those who borrow from banks under the ACGS, for the purpose of cassava production and processing. To qualify for these repayments, borrowers need to repay their
loans on schedule.
Contact for further information: infonigeria@gan.co.za
