In this report, CHIKA IZUORA assesses the impact of the Presidential Fertilizer Initiative (PFI) on agriculture and job creation in Nigeria.
For decades, Nigerian farmers have been hit by poor harvest because of near-zero access to fertilizer to boost crop performance. The government has introduced several policies aimed at helping the farmers. One of such is the Presidential Fertilizer Initiative (PFI), undertaken by the Nigerian Sovereign Investment Authority (NSIA) in 2017.
The initiative was introduced to boost agriculture, cut back on stupendous foreign exchange spent on fertilizer substitution and importation and boosting job creation locally among others.
Four years after, the government has demonstrated that it was satisfied with the impact of the PTI and has approved its restructuring for another four years starting from 2021, but with some modifications.
Stakeholders have commended theactivities of the initiative within the first four years and rated the programme well in delivery of key outcomes. They said NSIA’s investment in local fertilizer production has saved the country over $350 million from the erstwhile payments on subsidy and import substitution through the implementation of the Presidential Fertilizer Initiative (PFI).
Also, analysts said that there have been some positive outcomes of the initiative which include: over 30 million bags of 50kg NPK 20:10:10 equivalent spanning project period; price reduction on fertilizer from over N10,000 to under N5,500, resuscitation of 41 blending plants from an initial number of four plants at project inception and creating 250,000 jobs (direct and indirect) across the agriculture value chain. This includes jobs in logistics, ports, bagging, rail, industrial warehousing, and haulage touch-points and others that have been created.
The stakeholders also said aside the gradual realisation of the food sufficiency goal, it has shown the possibility of exporting farm produce in large quantities to buoy foreign reserves, when local consumption target is achieved.
A farmer in Gombe State, Hassan Usman hailed the PFI for crashing the price of fertilizer, thereby making it more affordable and accessible to farmers. He said, “Before now, we used to buy a bag of fertilizer for N10,000, but now, it has reduced to N5,500. Many of us can now afford it and we can see the difference in our crop performance.
“It is something the government should sustain. It’s for the benefit of the entire country”.
Another farmer, Joe Nwogu said that reducing the price of fertilizer was a major step towards food security.
“Not many of us use the improved crop varieties like maize and beans. But with fertilizer, we realise bountiful harvest in a small farm space. It is very encouraging and we commend the government for this. Fertilizer has reduced from N11, 000 to N5,500. That is remarkable”, he said.
Nonetheless, the NSIA, under the new modifications has been transitioned to an upstream player thereby limiting its involvement to importation, storage and the wholesale of raw materials. Such a task has been outsourced to blenders.
In his comment at a recent event in Abuja, the chairman, Implementing Committee of the PFI and governor of Jigawa State, Governor Mohammed Abubakar Badaru said, “The programme has in many ways served to augment the Administration’s policy-driven programmes to diversify the Nigerian economy. In the main, the programme has bolstered Nigeria’s industrial base, resuscitated, and strengthened domestic production capacity for fertiliser, eliminated to the huge fertiliser subsidy burden placed on Federal Government, created thousands of direct and indirect jobs and alleviated the plight of the domestic farmer by ensuring availability of fertiliser.
“Clearly, the programme is a strong value proposition for the nation in the agriculture space given the variety of socio-economic benefits it presents. We are grateful to Mr. President for creating this programme and look forwards to supporting the next phase as it evolves.”
Speaking on the development, the managing director of NSIA, Mr Uche Orji explained that with the support of the President, the programme has accomplished its principal objectives.
He said: “Having fulfilled the establishment, stabilization, and market discipline phase of PFI, the primary objective of which was to revive the blending plants and create a viable domestic blending industry, we believe the PFI should gradually evolve into the next phase, which is a tactical withdrawal of intervention in the industry and the emergence of a self-sufficient, sustainable, and efficiently operated market.
“NSIA is pleased with the government’s decision and looks forward to seeing the innovation and creativity which will characterize the open market in the sector”.
In his remarks, chairman, Fertilizer Producers and Suppliers Association of Nigeria, Thomas Etuh, said that the restructuring was a welcome development for FEPSAN.
He said, “The new approach will afford operators the opportunity to build recognisable and trusted brands while ramping up distribution nationwide”.
Before now, a giant step towards boosting local fertilizer production was taken in Morocco in March when NSIA signed agreements with an offshore firm, OCP of Morocco, Akwa Ibom State Government, the Nigerian National Petroleum Corporation (NNPC) Gas Aggregation Company of Nigeria, (GACN), the Nigerian Content Development and Monitoring Board (NCDMB), Mobil and Fertilizer Suppliers Association of Nigeria (FEPSAN) for the development of a $1.4 billion plant to produce ammonia and di-ammonium phosphate, under Nigeria’s Gas Industrialization Strategy initiative.
The multi-billion naira project will be sited in Akwa Ibom State due to its huge gas reserves.
The first phase of the project will produce 1.5 million tonnes per annum of Ammonia in two phases. Up to 70% of the Ammonia produced will be allocated for export to Morocco and the balance will be routed to the production of 1 million tonnes per annum of Di-ammonium Phosphate (DAP) and NPK fertilizers to feed domestic demand. It is expected that project construction will commence no later than Q3, 2021. In the first phase of the project, $1.4billion will be invested in building out the plant and its supporting infrastructure with a target operations-commencement date of 2025.
The Minister of State, Petroleum Resources and Head of the Nigerian delegation, Mr Timipre Sylva assured the stakeholders of President Buhari’s commitment to the actualisation of the project.
In his welcome remarks, the chairman and of OCP, Dr. Terrab Terrab said: “Ultimately, these agreements will strengthen the partnership between the NSIA and OCP Group and the different institutions in the gas industry in Nigeria. The outcome of today’s agreements will translate to knowledge transfer and broader economic opportunities as we build out the industrial platform. The platform will leverage the best of Nigerian and Moroccan natural resources, namely the Nigerian gas and the Moroccan phosphate and create a new basis for stronger ties”.
Orji also said the project forms a key part of NSIA’s gas industrialisation strategy and will deepen intra-continental trade, which is essential to Africa’s development and economic renaissance.
“This landmark project, the MIP, will explore increased levels of synergy between NSIA and OCP and the partners to the transactions and ultimately ensure that Nigeria builds an industrial base that is sustainable and complementary to mutual objectives of developing the agriculture sector in Nigeria”.
The group managing director, NNPC, Mr Mele Kyari, stated that the corporation and all its subsidiaries were committed to the project. He further added that “NNPC is committed to taking equity stakes in the joint venture company and will ensure sufficient gas is available for the project to succeed.’’
Gov. Emmanuel Udom of Akwa Ibom State assured the parties that sufficient support to ensure the project succeeds.
“Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality. With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”.
Executive secretary, NCDMB, Mr Simbi Wabote, also assured working hard to bring the project to fruition. He said, “We are committed to ensuring that clear operational guidelines and constructive oversight is provided to support the project. The investment is a welcome development, and we look forward to the commencement of the project”.
Also, managing director and chief executive officer, GACN, Mr. Olalekan Ogunleye, said, “We are looking forward to the project. All the support required for its success within our remit will be provided. We expect that this will encourage more investment of this nature in Nigeria”.
Chairman of FEPSAN, Mr. Thomas Etuh, said that Nigeria possesses an enviable reserve of natural gas while Morocco is a leader in fertiliser production.
He said, “These comparative advantages make for a partnership between our two countries that is mutually beneficial and scalable. FEPSAN was a party to the first structure of the Presidential Fertiliser Initiative (PFI). We are working now to ensure that the results of the first phase are improved upon and broadened in the new structure”.
The agreements further cement the joint resolve of President Muhammadu Buhari and King Mohamed VI of Morocco to develop a multipurpose industrial platform project in Nigeria. The project, NSIA stated, represents a huge significance in the quest for industrialization, food security and deepening continental cooperation.
“The multipurpose industrial platform project is a backward integration initiative, which builds on the successes of the Presidential Fertilizer Initiative (PFI) and other sovereign bilateral initiatives between Nigeria and Morocco.
“It is structured to commercialize Nigeria’s vast natural gas resources and satisfy Morocco’s demand for cost-competitive Ammonia.
“The agreements are designed to create a clear path for the second phase of the Presidential Fertiliser Initiate as well as the creation and operationalization of a Multipurpose Industrial Platform (MPI) in Nigeria”, the statement added.
NSIA added that five agreements were executed as follows: a Memorandum of Understanding (MoU) between it, the OCP Africa and the FEPSAN to commit to the second phase of the Nigerian Presidential Fertilizer Initiative (PFI II). Another was a Shareholders Agreement (SHA) between the NSIA and OCP Africa for the creation of the Joint Venture Company (JVC) which will oversee the development of an industrial platform that will produce ammonia and fertilizers in Nigeria.