Nigeria: The Farmer’s Best Friend

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The Presidential Fertiliser Initiative programme has done much to ease farming.

Even as farming is just starting in most parts of the north, my farms in the southeast have since received sufficient doses of the “medicine” necessary for bountiful harvests. At just N5, 000 per 50kg bag, fertiliser comes handy to those of us who plant on not-so-fertile soil that therefore needs to be nurtured. In this planting season, one commodity that is most valuable to Nigerian farmers obviously is fertiliser.

Unlike us part-time farmers, many uninformed agriculturalists are oblivious of how fertilisers get delivered to them so cheaply these days. When I asked a few of them in my village how they were able to get fertiliser at just N5, 000 a bag, the answer I got was simply “government”. But which government? They didn’t know!

In a way, they’re right. For the past three years, the Presidential Fertiliser Initiative (PFI) programme has made fertilisers available to us with much ease. No longer are they imported and sold for N10, 000 or N12, 000; only a small fraction of raw materials is sourced from Morocco, and the finished products leave the blending plants now scattered in the agricultural belts of the country and are delivered to agro-dealers and state governments. They take the finished products from the blending plants and retail to the farmers.

In the 1990s, the media was awash with stories about fertiliser scams, as the products were diverted and sold to non-farmers who resold them at exorbitant prices. The ugly trend has since been silenced by the transparent process instituted about 15 years ago while Dr Akinwumi Adesina was agriculture minister. Until recently, the persisting problem was that the price of imported fertiliser remained out of the reach of many — even the subsidised fertilisers couldn’t go round.

The PFI has been the President Muhammadu Buhari administration’s success story. And it runs smoothly. When the president spoke of food security, in his Democracy Day address to the nation last week, he couldn’t have forgotten to pay glowing tribute to the PFI for delivering “significant quantities of affordable and high-quality fertilizers to our farmers”, for reviving 31 blending plants, and creating “a significant number of direct and indirect jobs across the value chain”. Food-induced inflation has reduced and economic activities across the agriculture value chain have been stimulated. There is efficient supply chain and improvement of logistics management as well as stimulation of product innovation and development through use of expertise in producing scientifically recommended formulae adaptable to the needs of the Nigerian soil.

The barely seen power behind the PFI has been the Nigeria Sovereign Investment Authority (NSIA), the agency given the responsibility of implementing the programme. That is to say, NSIA funds PFI. The story began in December 2016. In the president’s 2017 budget address, he formally approved the commencement of the Presidential Committee on Fertilizer Initiative (PCFI) under the chairmanship of Jigawa State governor Mohammed Badaru Abubakar. The committee included representatives from the Nigeria Governors’ Forum, the Federal Ministry of Agriculture, the Central Bank of Nigeria, the leadership of the Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN), and the NSIA. NSIA was to source and procure the raw materials, contract with fertilizer blenders to blend the products under a contract blending arrangement, sell the fertilizer through the blending plants and receive proceeds for the fertilizer sale. The price of the product was set by the presidency.

PFI’s annual revenue is a little more than N100bn and its costs are slightly more. So far, 31 blending plants have been resuscitated and accredited. In three years, PFI has delivered an average of 7 million 50kg bags of NPK 20:10:10 annually — and it targets 12 million bags in 2020. Over 1, 000 agro-dealers have been accredited. Government has been enabled to save foreign exchange that would have been expended on fertiliser subsidy or used to import bags of fertiliser.

Under the PFI business model, the four constituent raw materials required for production of NPK 20:10:10 fertiliser are sourced and then blended locally at accredited blending plants to produce fertiliser for delivery at N5, 500 per 50kg bag. It has now been reduced to N5, 000 effective April 2020. The four constituent raw materials required for the blending process are Urea, Diammonium Phosphate (DAP), Muriate of Potash (MOP) and Limestone Granules (LSG). NSIA helped to restructure the deal for importation of DAP and MOP (38% of inputs) from Morocco; about 62% of raw materials by weight, LSG and Limestone, is sourced locally. A cumulative total of 946,264 MT of NPK 20:10:10 fertiliser was produced from 2017 to 2019 under the PFI programme; 917,178 MT has been sold.

This year, NAIC-NPK Limited (a special-purpose vehicle through which the NSIA operates) has imported the constituent raw materials required for the blending of 600,000MT (12 million 50kg bags) of NPK fertiliser and has also commenced the sourcing and ordering of constituent raw materials required for the blending of the 400,000MT (8million bags) of NPK fertiliser under the other programmes. Production is gearing up ahead of the 2020 farming season.

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