Nigeria, China Sign $1bn Sugar Deal

China has cemented its growing influence in Africa’s agro-industrial space with a $1 billion sugarcane cultivation and processing deal signed with Nigeria.

The agreement between National Sugar Development Council (NSDC) and Chinese industrial giant SINOMACH marks a strategic move to unlock Nigeria’s sugar industry, drive rural industrialisation, and deepen the Nigeria-China economic alliance under President Bola Tinubu’s administration.

The recent Memorandum of Understanding (MoU) sets the stage for one of Nigeria’s largest agro-industrial investments in recent years. It comes at a critical time when the government is seeking to revitalise local industries, diversify exports, and reduce the country’s reliance on imported raw materials.

NSDC Executive Secretary, Mr. Kamar Bakrin, confirmed that the project will initially focus on developing a sugarcane plantation and a sugar processing plant with an annual capacity of 100,000 metric tonnes, aiming to scale to one million metric tonnes in the long term.

“This partnership with SINOMACH represents more than just an investment—it is a turning point in Nigeria’s industrial ambition,” he said.

“It combines engineering, procurement, and construction (EPC) expertise with development financing. This is precisely the kind of model that will drive Nigeria’s agro-industrial transformation.”

Beyond the investment figure, the initiative is poised to deliver significant socio-economic returns. Thousands of jobs are expected to be created across the agriculture and manufacturing value chain. The project is also projected to stimulate rural infrastructure development, reduce Nigeria’s sugar import bill, conserve foreign exchange, and become a model for other sectors seeking backward integration.

The deal is among the early outcomes of the Nigeria-China Strategic Partnership that President Tinubu has actively championed, signalling a shift toward more investment-led development diplomacy. With Nigeria’s annual sugar demand exceeding 1.5 million metric tonnes, the potential for import substitution and value chain expansion is massive.

Despite longstanding efforts to develop local sugar production through the Nigeria Sugar Master Plan (NSMP) introduced in 2012, progress has been sluggish. As of 2020, Nigeria still imported more than 90 percent of its sugar needs due to infrastructure deficits, regulatory bottlenecks, and entrenched market dynamics that have favoured importation.

Industry leaders such as Dangote and BUA have made substantial investments in refining capacity, but domestic cultivation has lagged. The SINOMACH-NSDC partnership now aims to bridge this gap by aligning industrial processing with agricultural production in one integrated project.

China’s approach to economic engagement in Africa has increasingly focused on long-term infrastructure and industrial development. In embedding financing into engineering-led projects, Chinese firms like SINOMACH are offering end-to-end solutions that appeal to African economies looking for quick wins on job creation, manufacturing expansion, and technology transfer.

The new sugar project also aligns with Nigeria’s broader goals to reindustrialise rural communities and drive inclusive economic growth. With a rapidly growing population and rising demand in food and beverage manufacturing, Nigeria’s sugar sector is ripe for transformation.