…also to boost Nigerian bag industry, create 3,700 jobs
The Nigeria-Morocco fertiliser deal which took off a fortnight ago, will help increase local blending capacity to 25 percent of installed capacity and create a 20 million bag market for operators in the industry, the Presidential Fertiliser Initiative (PFI) document states.
The scheme, it is anticipated, will increase fertiliser supply and reduce prices, encouraging Nigerian farmers who typically use only about 25 percent of fertiliser requirements, to step up use , thereby increasing crop yields per hectare.
Fertiliser is key in boosting farmers’ productivity and increasing yield per hectare. Farmers must put in eight to ten bags of fertilise per hectare to get improved yields, but they currently use between two and four bags only, experts say.
Before now, the country’s local blending capacity utilisation was 10 percent, while total blending capacity was six million metric tonnes of both NPK and Urea per annum.
“The initiative will produce a total of 1 million metric tonnes of blended NPK fertiliser for wet season farming and 500,000 metric tonnes for dry season farming across Nigeria,” the document states.
This implies that a total of 1.5 million metric tonnes of fertilisers will be provided by the country’s local blending plants, thus increasing local capacity to 25 percent of the six million metric tonnes of total exiting capacity of the blending plants.
The deal which has seen the first consignment of fertiliser arrive Nigeria, is to strengthen the country’s local capacity, to ensure timely supply of fertiliser and reduce Nigeria’s import bill by $200 million, as well as eliminate the N60 billion budgetary allocation for fertiliser in the proposed 2017 budget.
Nigeria currently imports more than 50 percent of its fertiliser stock of blended NPK, despite being well endowed in limestone and urea, which constitute the bulk of the components for production of the product.
“Most of Nigeria’s stock of blended NPK fertiliser is shipped into the country as fully-finished products, even though urea and limestone, which constitute about two-thirds of the components of each bag, are available locally,” according to the document.
Under the deal, fertiliser subsidy for farmers will be abolished, along with the the Growth Enhancement Scheme (GES), which was the Federal Government’s initiative to transform the agric sector through the provisions of inputs such as fertiliser and seeds to farmers.
The GES scheme has not been functional under the Buhari administration, as a result of debts owed agro dealers who where supplying the inputs to farmers.
According to the document, “the Buhari administration inherited N62 billion in unpaid fertiliser subsidy arrears. Only recently, March 15, 2017, the Buhari government had approved the release of the final tranche of N22 billion to clear the balance of this inherited debt.”
Farmers who spoke with BusinessDay about the Nigeria-Morocco fertiliser deal, lauded the initiative.
“This is a very good initiative because we do not have all the components needed to produce fertilisers locally. It also means that farmers will be able to use enough quantity of fertilisers needed for optimum yield per hectare,” said Abiodun Olorundenro, chief executive officer, Green Vine Farms Limited.
“Farmers usually do not use sufficient fertiliser because of the high cost. But this deal will bring down the price to N5, 500,” said Olorundenro.
He noted that farmers were expected to use a minimum of between eight and ten bags of fertilisers per hectare, going by basic agronomy practice.
Ibrahim Kabiru, president, All Farmers Association of Nigeria (AFAN) said the initiative is a laudable one because it assures and guarantees stable fertiliser prices for farmers across the country.
Nigeria’s fertiliser demand is put at about seven million tonnes per annum, according to the Fertiliser Suppliers Association of Nigeria (FEPSAN).
