Wednesday, July 27, 2011

Savannah Sugar Industry's stormy tea cup

Savannah Sugar Industry's stormy tea cup

Timawus Mathias

Siting threats to life and property from restive daily rated factory workers, Savannah Sugar Company Numan, owned by Dangote Industries Limited closed down in the middle of June.
Ordinarily, the closure of Savannah Sugar Company, Numan would have been a simple storm in a tea cup (even sugar free). Local production of sugar meets only 5% of Nigeria's total need and consumption. The colossal 95% is imported incidentally largely by Dangote Interests - the owners of the closed company. The more than meets the eye in all this is that Dangote, who should be happier importing Sugar than tilling the soil and dirtying his chubby cheeks with the black oil that turns brown sugar white, closed down the plant just simply to justify importation of sugar. Now this is the cyclone! A country as blessed agriculturally as Nigeria is, has no business importing sugar. Nigeria must cultivate and produce all its sugar needs, if anything, for the labour intensity that doing so implies. The fact that the act of closure has cost the company nearly a billion Naira in losses and has rendered jobless, its 2000 strong work force, each member with an average of 4 dependents, has implications that should cause anxiety.

The issues appear on the surface to concern the daily rated casual labourers in the company who are pressing to be given full time employment. As daily-rated workers, they receive pay only per work day, with no week-ends or off days. Without security that the job would be there the next day, the pay is a paltry sum of N500. The Savannah Sugar Company worker compares himself with the Local Government ghost or absentee worker who earns a steady higher salary without even having to work, and naturally considers his lot, an unacceptable anomaly.

Beneath the surface therefore, lie more fundamental grievances that deserve being faced squarely, if the only sugar industry in Nigeria that grows its own cane is to remain operational, and profitable. The failure of Government at both Federal and State levels to address the vexed issue of compensation for about 20 thousand hectares of farmland acquired for the plantation and the factory has caused the communities to murmur and grumble for the past 45 years since the land was acquired. Fathers pass their claims to compensation over the land, to their children in war songs sung as the cane is harvested and hence this undying claim has persisted through the ages, and will go on for generations to come.

45 years ago, 20 thousand hectares of rich agricultural land north of the Benue river from Numan was acquired by the Federal Government to establish Savannah Sugar Company. The land, inhabited by the Bachama, the Longuda, the Kanakuru, the Mbula and a host of other smaller ethnic communities was captured inclusive of the numerous ponds from which the people found their supplies of fish. For the last 45 years, growers hitherto, of guinea corn, maize and cotton have become labourers of a sugar plantation. The fathers till the soil and plant the cane, the mothers harvest the crop and feed the factory mill, and the children live a lost and drunken life to illicit molasses gin, and hopeless idleness.

Compensation of only about N450 million earmarked for this land acquisition which deprived peasant farmers of their only means of livelihood remained the fundamental vexed issue, the communities kept calm all this while because the Government owned the project. Now that it was reverting to a "single" individual, the agitation for compensation became further heightened. Why the Government has turned a deaf ear to the peoples' cry remains a mystery, preferring instead, to allow wild rumours to run wild to the effect that compensation had indeed been paid but was "chopped" by the local council and traditional authorities. This has, as would be expected, caused disaffection among the people. To exculpate himself and avert community wrath, the Hama Bachama Asaph Zadok, in whose domain much of Savannah lies, chose the forum of the turbanning of a district head to pacify his people but to cry in despair that the traditional authority could no longer secure Dangote's investment in the project, in hope that this would underline the urgency of even addressing the issue of compensation with a simple promise.

In the years before privatization, Savannah Sugar Company had been mismanaged to a state of stupour. It could neither pay its workers nor maintain itself and the Federal Government sought to sell its interests in the project under the privatization programme. Under the federal ministry of industries and the Bureau for Public Enterprises, the African Development Bank provided intervention funds to the tune of nearly $70 million for refurbishing the factory, with new equipment, plantation development and expansion. Sugar cane productivity at project intervention appraisal was estimated at 79 tons per hectare. After rehabilitation, the highest yield was about 47 tons per hectare, short of target by 40%. Thus in spite of the colossal investments in inputs, advanced technology and management, even after the injection of over $70 million, Savannah was rated as a failed project! Production fell from 21,000 pre intervention to 909 tons in 2001 and zero production in 2002.

No one bothered to investigate the criminality that brought about such a defective feasibility on which the loan of $70 million dollars was based, even for the fact that this act alone sabotaged the nation's economy. Even the African Development Bank appraisal of how its loan had performed, blamed the Federal Government for nonchalance. Instead, in a display of bizarre wisdom, the government, that year, sold Savannah Sugar Company to Dangote Industries for a paltry $6 million dollars - after spending $70 million to refurbish the factory with brand new equipment, including de-silting of the irrigation canals from Kiri Dam to the project! Much as this did not make sense to all right thinking people, it remained the more bizarre that the small matter of compensation was not given attention. It was an insult on the common folk of Savannah, to write off $63 million in favour of Dangote and not pay the miserly N450 million in compensation. Added to this over pampering is the fact that Savannah Sugar Company is the sole beneficiary of the Kiri Dam on the Gongola River from where irrigation canals travers the sugar estate for a mere N2 million a month, insufficient for the overheads of maintaing Kiri Dam!

In truth, Dangote appears to have run the course of the Federal Government before the project was sold, spending over 12 billion Naira, and cultivating only 6,500 of the 20,000 hectares of the acquired land. This meagre land use for cane, fails to show you on a world map of sugar production and thus Savannah Sugar Company is consequently proving incapable of making profitable returns. The choices before Dangote appear to be to innovate, or cut losses and run! Dangote had hoped to harvest at least 80 tons per hectare of cane. The best yield in the savannah plantation so far is 60 tons per hectare, a shortfall of nearly 20% from projection. Ironically, the highest yield of cane by the best out grower using bare hands and minimal input, recorded 120 tons per hectare, to date the highest yield in the world and recorded in the muddy backwaters of Mbemun! The worst out grower in the same Mbemun recorded 80 tons for his hectare, proving one thing, that Dangote should have contended himself with processing sugar and conceded the cultivation of the crop to out growers!

Running is not it. And making scape goats of the people of Gyawana is also not it - even worse, to accuse any one of instigating the events that led to the closure of the company.

The communities recognize and appreciate the importance of the sugar project in the land, but for losing their farms and fishing ponds, they are demanding attention to the "small" matter of compensation, a higher stake as out growers, producing their cane and giving it to the factory for a price. Why Dangote Industries do not seem to accept this profound lifeline is another mystery, for not only would this have minimized or even ruled out it's labour woes, it would have guaranteed a steady flow of locally grown cane from across the entire region.

Timawus Mathias

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