The private sector has invested $8bn in local fertiliser production in Nigeria since 2016.
These investments were made by companies like Dangote Industries Limited, Indorama Eleme Petrochemicals Limited, Notore Chemical Industries and varous blending plants in the country since 2016.
This was disclosed in an exclusive interview with LEADERSHIP yesterday by the executive secretary , Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN), Mr. Gideon Negedu.
Negedu attributed the increase in private sector’s investments in fertiliser production in the country to the enabling environment created by the federal government.
He said, ‘‘The government has created an enabling environment for private sector. There were blending plants before but they were not functional and the only reason was that the environment was not conducive for people to sustain those businesses. They had to shut down plants and were importing those materials because it was cheaper to import then. The cost of producing fertilisers locally here was mad.
‘‘The policy of the government has encouraged people to come and invest. We had 11 blending plants in Nigeria before, it moved to 18, 22 and now quantum leap of 46.These are private sector money. They are investing because they saw the policy work.’’
He said the association started what is called Presidential Fertiliser Initiative with the goal of reviving local production of fertiliser in Nigeria.
‘‘In doing that, we looked at the industry and what the challenges were and we discovered that the blending industry was dead. There was little to minimal blending as at 2016. In working with the government, we realized that we needed to create incentives to attract investment into that space which was what we did with Mr President. The core raw materials were not only very expensive to purchase by any regular blender but also difficult to get in terms of access to forex. What we can do is to aggregate what the demand was in term of those raw materials and then give it to the blenders to blend in a contract of two blending arrangements.
‘‘Under those two blending arrangements, government was to provide the raw materials. We bled for them and the final product belongs to the government not us. Under that arrangement, government was able to do this and fix the price boldly written on the bags,’’ he said.
According to him, the arrangement was supposed to last for three years as the goal was that within the time frame, the industry would be able to get matured and then run on its own.
He said that fortunately, the deal recorded astounding success as the blending plants in the country have increased from 11 plants in 2016 to 46 now.
‘‘These are not government investments but private sector investments. People who put their own money because the policy was working and they invested in it,’’ he said.
However, he said the programme was later restructured in such a way that “Now if the blenders have the fund to produce fertlisers, it is fine but if not, they will get a bank guarantee and give it to government to procure the raw materials. The government, according to him, is procuring these materials based on bilateral agreement between Nigeria and Morocco, Nigeria and Tunisia to purchase the raw materials that are not available in the country.
‘‘The government procure the raw materials and keep it at the port. We provide a bank guarantee and based on the bank guarantee, you come and lift what your raw materials capacity is. The prices are not usually controlled. However, for NPK 20:10:10, the general one that is being used, we agreed that at plant level, the price it won’t sell for more than N8,640 but for other blends that the farmer will require, it will now be based on the cost of raw materials.
“We were able to raise our guarantee and today the country is awashed with fertlisers. There is nothing like scarcity, we have a lot of materials; a lot of products in the field today. We have some challenges this year with respect to rain, the rain has not been as we normally have it, there has been major shift in the time the rain has come.’’
Negedu also said as part of what the private sector did in conjunction with the government was to advocate for a law that regulate fertliser production in Nigeria which is called Fertliser Quality Control Act 2019 which was a law signed by President Muhammadu Buhari and criminalizes adulteration of fertilizer in Nigeria with a fine and jail term.
On insecurity and farming, he said the report from farmers is that there is an improvement.