By Jeph Ajobaju, Chief Copy Editor
Only three companies, among them Dangote Sugar Refinery, are now approved to import sugar by the Central Bank of Nigeria (CBN), which says the trio have made progress in backward integration by incorporating local production of the crop.
Nigeria spends between $600 million and $1 billion on sugar imports every year.
Before this announcement, Aliko Dangote, already a billion by miles, had been primed for even more money this year with his sights on a N13.1 billion dividend from the sugar enterprise he established in 1999.
His plant joins Golden Sugar Company to import sugar along with BUA Sugar Refinery owned by Abdulsamad Rabiu, another billionaire who also controls a conglomerate that involves cement production and real estate.
The CBN approved only the trio to import sugar through cheaper official foreign exchange (forex) channels. Others may import the commodity but only by sourcing hard currency in unofficial forex channels which cost more.
A circular signed by CBN Trade and Exchange Department Director, Ozoemena Nnaji, told all authorised forex dealers that only the three firms are allowed to open Form M or access forex to import sugar, per reporting by Nairametrics.
The CBN said “under the National Sugar Development Council, established the Nigerian Sugar Master Plan to encourage and incentivise sugar refining companies in their Backward Integration Programme 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: BUA Sugar Refinery Limited, Dangote Sugar Refinery Pic and Golden Sugar Company ….
“Authorised dealers shall not open Form 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.”
Conserving forex
CBN Governor Godwin Emefiele announced in April plans to include sugar and wheat on the forex restriction list to help conserve forex and boost local production of these items.
Also in April, the Nigerian Ports Authority (NPA) banned the importation of refined sugar and its derivatives from Free Trade Zones (FTZs), to protect the sugar industry governed by the Nigerian Sugar Master Plan (NSMP).
Dangote eyes N13b dividend from sugar
Dangote is the Chairman of Dangote Industries, the most diversified manufacturing conglomerate in Africa, a continent where he is also the richest man.
Dangote Sugar Refinery (DSR), part of the conglomerate, has added about N90 billion to his wealth in the past one year alone, per calculation by Nairametrics.
The PUNCH adds that Dangote is expected to earn a dividend of N13.1 billion from DSR in FY 2020 based on N1.50 per share from his direct stake of 653,095,014 units, and an indirect stake of 8,122,446,281.
Financial statements for FY 2020 released by DSR said “as at December 31, 2020, the 12,146,878,241 Ordinary Shares of N0.50 each in the issued Ordinary Share Capital of DSR are beneficially held as follows:
“Dividend of N1.50k per ordinary share (2019: N1.10k) has been proposed by the Board of Directors for approval at the forthcoming Annual General Meeting.”
DSR posted N29.78 billion profit after tax in 2020, compared to N22.36 billion in 2019, according to its audited financial statements.
The company said it raised production 13.7 per cent to 743,858 tonnes in 2020 from 654,071 tonnes in 2019. Sales volume rose 6.9 per cent from 684,487 tonnes to 731,701 tonnes.
Group revenue notched 33 per cent to N214.30 billion from N161.09 billion in 2019 and gross profit 40.4 per cent to N53.75 billion from N38.29 billion.
Sugar fetches Dangote N90b in 365 days
Dangote’s wealth peaked at $18.4 billion by March this year, and his stakes in DSR represent a total 72.3 per cent of issued ordinary shares.
In just one year, according to Nairametrics, his 8.78 billion shares in his integrated sugar business have gained N67.6 billion in market value.
This is driven by N7.65 per share increase (77.66 per cent) in the share price of Dangote Sugar – leading to a market value gain of N67.1 billion in his stakes.
His shares in his sugar enterprise surged from N9.85 on March 16, 2020 to N17.50 at the close of the stock market on March 16, 2021.
He received N1.10 per share on July 9, 2020 as final dividend paid by DSR for FY 2019 – with the total dividend in excess of N9.6 billion.
And Dangote is now on course to earn N13.1 billion dividend.
The DSR board of directors has proposed a final dividend of N1.5 per share to shareholders for FY 2020.
By this, the total sum Dangote stands to gain from his stakes in DSR is N89.9 billion (approximately N90 billion).
