SPECIAL REPORT: How Buhari’s PFI Programme Boosts Fertiliser Supply
Ogbonnaya Chukwu, the general manager, Ebonyi State Fertiliser and Chemical Company Limited (EFCCL) sat behind a busy desk in his scantily-furnished office as he spoke glowingly about the Presidential Fertiliser Initiative while a generator coughed outside.
“Last year the company joined the Presidential Fertiliser Initiative (PFI) of the federal government and since then the company has grown through leaps and bounds and is now making serious impact, not only in Ebonyi State but in the South-east geo-political zone and in the South-south states,” Mr Chukwu said proudly.
Mr Chukwu said the fertiliser plant, set up 14 years ago with a capacity to produce 40 metric tonnes of fertiliser every hour, soon went comatose due to poor demand as a result of the proliferation of imported fertiliser.
But in 2016, the state government breathe life back into the dying plant after it invested N100 million towards its revival which allowed the plant to participate in the PFI.
In a swift turnaround, between April and August 2017, the plant, produced 100,046 bags of fertiliser as demand continued to soar, Mr Chukwu said.
In order to meet that demand, the EFCCL is now constructing two new warehouses and a new blending facility.
The Presidential Fertiliser Initiative
During the visit of the King of Morocco, Mohammed VI to Nigeria in December 2016, the federal government and the Moroccan government facilitated a partnership between the Fertiliser Producers and Suppliers of Nigeria (FEPSAN) and the OCP, a state-owned Moroccan phosphate producer.
The agreement was aimed at breaking the country’s reliance of the importation of compound fertilisers, which has replete with corruption, hoarding and has left the government with billions in unpaid debt.
The partnership was mandated to help achieve the local production of one million metric tonnes of blended Nitrogen, Phosphorous and Potassium (NPK 20:10:10) fertiliser for the wet season farming, and an additional 500,000 metric tonnes for dry season farming.
According to the PFI, blending plants are to be supplied the four components of producing the NPK fertiliser – urea and limestone granules, which are both locally sourced, discounted diammonium phosphate from Morocco and Muriate of Potash from Europe.
The PFI caters exclusively for the production of NPK which is also referred to as a “multi-nutrient” fertiliser as opposed to “single super phosphate and urea, which are already being manufactured in the country.”
Due to the discount negotiated with OCP, local blending plants are able to produce the finished products and deliver to farmers at N5,500 per bag. The blending plants are paid a blending fee of N620 per bag for their effort. Dealers who buy the bag at N5000 are allowed to make N500 as profit for each bag sold.
The PFI intervention fund is managed by the Nigeria Sovereign Investment Authority at 9 per cent per annum through a Special Purpose Vehicle known as the NAIC-NPK Limited.
According to the arrangement, invoices from suppliers of the raw materials are passed to NAIC-NPK Limited, which pays the suppliers directly; takes delivery of the materials and passes them to the blending plants. After blending, the plants bag and sell the finished fertiliser to agro-dealer and interested state governments and remit the revenue to NAIC-NPK Limited.
The government said the PFI will effectively remove the corruption that characterised the old way of importing compound fertilisers and to check the proliferation of substandard fertilisers. Last November, the government announced that it inherited a N65 billion debt owed fertiliser suppliers which it has since paid to pave way for the successful implementation of the PFI.
In December 2017, the Nigerian government also claimed that 11 moribund fertiliser blending plants across the country with the capacity to blend over a million metric tonnes of fertiliser have been revived as a result of the PFI.
Praises for the PFI
Mr Chukwu credited the good fortune being enjoyed by EFCCL to the successful implementation of the PFI. He said the ease of collecting the blending fee accrued to fertiliser plant is the commendable.
“One thing that has never ceased to marvel me is that any time you request the NSIA, to pay you the money for the blending fee, if you apply today, Monday, you may get it on Wednesday – There is no delay. You get your money seamlessly, effortlessly. That encourages blending plants,” he said.
He said while the plant gets bulk demand from state governments, like in March when the Abia State Government ordered for 20,000 bags, it also gets consistent demands from agro-dealers from nearby Benue, Cross River and Akwa Ibom States.
On how the plant meets the demand of local farmers in Ebonyi, Mr Chukwu who doubles as the senior special assistant to the state governor on Investment, said arrangements were made to move the fertilisers to local government headquarters of the state for easier accessibility to rural farmers.
In Kebbi State, farmers who spoke to PREMIUM TIMES said the PFI was responsible for cutting the cost of fertiliser.
“Before the PFI, NPK fertiliser was sold for N10,000. But since the government introduced the N5,500 fertiliser, dealers were forced to bring down their price to N6,000,” said Umar Al-Hassan, a rice farmer in Jega.
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