A creative new initiative by Nigeria to make its own fertilizer at home is bringing life back to some of its 38 fertilizer blending plants across the country, while saving the nation up to $200 million annually and aiming to create a 100,000 jobs.
Government officials tell BusinessDay a blossoming relationship between President Muhammadu Buhari and the Moroccan king sparked off a 3-year bilateral pact, under which Morocco is supplying Nigeria an agreed volume of phosphate which is then being blended at home with locally available urea and limestone granules, as well as potash, to supply Nigerian farmers up to one million metric tonnes of NPK 201010 grade of fertilizer a year.
Once contact with Morocco was established, Buhari set up a presidential committee headed by the governor of Jigawa and with others, including the Central Bank, Nigerian Sovereign Investment Authority (NSIA) as members, with the office of the National Security Adviser keeping watch to ensure the materials do not get into the hands of terrorists who make explosives from them.
CBN Governor, Godwin Emefiele, who is a member of the presidential team, alludes to the healthy GDP figures posted by agriculture in the recent numbers released by the NBS and he told BusinessDay: “we are continuing to use our development interventions to enable various points of the agriculture value chain and early evidence shows that we are not only helping to grow more food, but also raising the level of economic activity, creating badly needed jobs at home, while also saving scarce foreign exchange.”
Some of the fertilizer blending plants now being reactivated under the scheme had been dormant for up to 10 years our reporter learnt.
Until the presidential initiative designed by the NSIA took off, more than half of Nigeria’s 38 fertilizer blending plants had packed up, laying off their staff, but now two in Kano are back in operation and the one owned by the Nigerian Flour Mills Plc in Lagos, is expected to roar back to life in the next one week, according to Uche Orji, CEO of the Sovereign Wealth Fund (NSIA).
Orji said the initiative is a “classical case” of import substitution and that it will guarantee the local availability of good grade fertilizer to Nigerian farmers at about 30% below market price. It is still early in the day but the scheme has already delivered 5,000 metric tonnes into the market.
“We did not understand why the fertilizer in the market was selling for as much N8,000-N9,000 a bag”, Orji told BusinessDay. “We reasoned that this was too expensive. So our goals are to ensure fertilizer is made locally, that the fertilizer is available to Nigerian farmers round the clock at a good and competitive price, while thereby creating jobs for our people.”
Today the fertilizer produced under the presidential scheme has a factory gate price of N5,000. This is cutting the operational cost of farmers by a huge margin and also helping them to raise their farm yield.
Officials say there is also now hope that will open the way for Nigerian investors to set up new blending plants to take advantage of the presidential initiative.
To operationalize the scheme, NSIA had set up a special purpose vehicle, SPV which enters into contract manufacturing deals with local blending plants at an agreed blending rate. Another deal was reached with Notore and Indorama to supply the urea from gas but the limestone granules come from diverse locations, including Okpella in Edo state.
To ensue quality control, Ahmadu Bello University laboratory was given a contract to monitor quality at the blending the plants. So the initiative is positively impacting several companies and institutions in Nigeria, government officials said.
Our reporter was told that before they are engaged, the blending plants must show they have a three year track record, provide a performance bond, and must show they have a production capacity not less than 50,000 metric tones. Finally, a blending plant must obtain certification by the office of the National Security Adviser.
By Caleb Ojewale
