Economy

Presidential Fertiliser Initiative: Boom in Agriculture Set to Return

Recently, a virtual meeting was convened to review Nigeria’s progress in the fertiliser sector. It had the country’s president in attendance, alongside members of the presidential fertilizer Initiave (PFI) and the Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN), led by Mr Thomas Etuh.

The President appreciated the investments that had been made by Nigerians in the fertiliser sector, saying that those investments had contributed remarkably to lifting rural unemployment.

While urging investors in the industry to look beyond short-term gains, to enable them realise the immense economic and social gains available to themselves and the country, President Buhari expressed confidence that the country would witness unprecedented prosperity with sustained investments in peace-building in the rural areas:

“The increased investments in the rural areas are strong factors that have progressively helped in tackling some of the security issues the country has been witnessing.

“I appreciate the sacrifices and personal commitments to the economic emancipation of Nigeria, through enhanced availability of crop inputs for improved agricultural yield.

“Investments in rural areas tackle unemployment, which is the root cause of the insecurity we have been experiencing in many parts of the country at present.

It appears that recent development in the Nigerian fertiliser value chain is moving the country rapidly to becoming a regional and global fertiliser powerhouse. Just as President Buhari noted, it is such that Nigeria may stop importing fertiliser by 2023.

In the wake of Nigeria’s independence, the agricultural sector enjoyed enviable growth. This was until crude oil was discovered which led to the abandonment of farmlands for petrol naira. With Nigeria’s existing challenge in food security, revitalisation of the agric sector has been one of the resolves of the current administration.

Observers expected the country to improve on its position with time, but according to last year’s Global Food Security Index, Nigeria ranked 100th. This is out of 113 countries. According to Prof. Samuel Agele of the University of Technology, Akure, Ondo State, small and large-scale producers have been the saviours of the economy

However, experts in the agro-space as Kolawole Adeniji, the President and Chief Executive, NIJI Group, believe that if Nigeria must attain self-sufficiency, certain impediments to food production must be removed. Although some analysts acknowledge progress made over the years, smallholder productivity supported by fertiliser use which remained extremely low was a major factor.

The World Bank had placed Nigeria’s fertiliser use at just between six and 20 kg per hectare. This is below the figures for developed nations, where usage often exceeds 200 kg per ha. Meanwhile, the international standard of fertiliser usage is 50 kg per hectare.

In recent years however, Nigeria’s fertiliser sector seems to be entering a period of growth that will have industry-wide benefits. Food and Agricultural Organisation estimated that the country required about seven million metric tonnes (MT) of fertiliser yearly; and with the production of five million MT, the government had to grant waivers to some fertiliser plants to import the product.

It is noteworthy that there are over 33 fertiliser blending plants across the country, with many more coming. The enabling environment provides for private sector investors, through the National Fertiliser Quality Control Act of 2019.

Furthermore, under the Presidential Fertiliser Initiative (PFI), the government supplies discounted fertiliser input from Morocco and Europe to blenders, through the Nigeria Sovereign Investment Authority (NSIA) fertiliser fund vehicle. These are actually blended with local urea which is then distributed to farmers. The urea application in the country is continuing full-steam, bolstered by an uninterrupted supply chain in several parts of the country.

Brand new investments are equally expected to increase ammonia and urea production. This is following increased domestic demand, thereby reducing Nigeria’s significant dependency on the international market.

As it is, there are two major urea plants in the country: the Indorama Eleme Fertiliser and Chemicals Production Unit, considered the world’s largest single-train urea plant, with a production capacity of 1.5m tonnes of urea fertiliser, in Rivers State and the Notore 500,000 TPY production facility.

On the one hand, Indorama Eleme Fertiliser produces up to 1.5 million tpy of nitrogen products at its Train 1 facility. It has a new train, with a urea capacity of 1.5 million YPY. This urea major urea plant exports 70 per cent of its production to markets, including Latin America, while 30 per cent is allocated locally.

On the other hand, Notore’s production is consumed internally. The Brass Fertiliser and Petrochemical Company Limited (BFPCL) sets up a 1.3m tonne/year urea and 1.7m tonne/year methanol plant in Bayelsa State.

Also, coming on stream soon is the $2.5 billion Dangote Fertiliser Plant, owned by Africa’s richest man Aliko Dangote. Located in the Lekki Free Zone (LFZ), in Lagos State, the urea fertiliser plant is expected to manufacture three million metric tonnes of urea yearly, with core focus on the reduction of fertiliser imports, and $400million foreign exchange from export to Africa countries. The facility comprises two trains each of urea, with a daily production capacity of 3,850 tonnes.

The huge investment started in May 2017 when a Nigerian delegation visited Rabat, the epicenter of Morocco. Minister of Foreign Affairs, Geoffrey Onyeama, led the delegation to the palace of King Mohammed VI. Thomas Etuh, who is president of Fertiliser Producers and Suppliers Association of Nigeria (FESPAN), was also present.

One of the Memorandums of Understanding (MoUs) signed on the occasion was on the second phase of the fertiliser Initiative, which began when President Muhammadu Buhari received King Mohammed VI in Abuja. After that, a cargo of phosphate from Morocco was supplied to Nigeria. Through this, 11 blending plants were revived and about 1.3 million tonnes of fertiliser were produced.

As Vice-President, West Africa Fertiliser Association (WAFA), Dr Innocent Okuku, noted, “Nigeria’s rapidly growing population is providing ample space for fertiliser producers to pursue their ambitious growth strategies.” According to him, fertiliser manufacturers are sitting on a surplus production capacity that is exported to earn foreign exchange revenue amid uptrend in international prices.

He noted that: “With Dangote plant alone, Nigeria is doubling its urea fertiliser production. Even before Dangote plant comes on stream, Nigeria is producing more than it is consuming. About 50 per cent of what is produced in Nigeria today is exported. 30 per cent of urea is used to blending in the nitrogen, phosphate and phosphorus(NPK) industry.

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In West Africa, Nigeria is the only manufacturer of urea. Sadly, a lot of exported urea produced in Nigeria don’t go to West Africa countries. They go to North America, Brazil and other parts of the world.”

Okuku equally noted fertiliser production is going to witness a sustainable increase particularly with access to natural gas, sulphur, and phosphate feed stocks. As such, Nigeria might have no business importing fertiliser by 2023. The benefits within and outside Nigeria’s agricultural sector are massive. With this milestone, Nigeria might just be regaining her position in the global agricultural stream in no time.

Nelson Okoh

Categories: Economy, Features, Food