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According to the United States Department of Agriculture, global sugar production increased to 183.46mmt (million metric tons) in 2023 from 175.31mmt in 2022 but remained below global sugar requirements. The increase was largely driven by Brazil and India's production, which account for over 40% of the global sugar supply.

It was not surprising that concerns mounted in 2023 as sugar prices contributed to inflation following reduced supply from two of the largest sugar producers—India and Thailand—given unfavourable climate conditions and irregular rainfall, prompting increased prices.

For domestic sugar-producing giants like Dangote Refinery Plc (DSR), it may have seemed like a double-edged sword. Not only did supply to the global market become disrupted, resulting in surging prices of raw sugar imports, but also a battle with domestic macroeconomic challenges of FX instability, inflation, energy and infrastructural deficits, regulatory uncertainties, and insecurity.

Macroeconomic Landscape

The macroeconomic landscape in FY 2023 presented formidable business conditions, as indicated by various economic indicators (See illustration 1 below).

Illustration 1:

The challenging macroeconomic conditions impacted the operating conditions. Despite a commendable +9.47% growth in revenue to N441.45bn in FY 2023 from N403.25bn in a similar period in 2022, Ravindra Singhvi (DSR CEO) states that “…rising inflation, currency devaluation and strained consumer incomes…” saw net earnings reach (₦73.8bn) in FY 2023 from N54.742bn majorly driven by non-cash foreign exchange loss of ₦172.2bn in FY 2023.

The strategic importance and precarious dependence on sugar made it imperative for Nigeria to develop phase two of the Nigeria Sugar Master Plan (NSMP) that will ensure sufficiency in sugar production and even boost Nigeria to become a net exporter. The master plan is to span the period 2023-2033.  Dangote sugar Refinery Plc has stated its commitment to sugar sufficiency in Nigeria.

“We are going to play our part in ensuring that Nigeria becomes self-sufficient in sugar within a very short period. We are not the only players, but we will surely play our part. - Aliko Dangote (Chairman)

“Our commitment remains steadfast, ensuring the delivery of high-quality products to our valued customers as we continue to work towards fulfilling Nigeria’s Sugar Master Plan, positioning Nigeria as a self-reliant player in the global sugar industry. - Ravindra Singhvi, (CEO),