By ANIEBO NWAMU
Even as farming is just starting in most parts of the north, my farms in the southeast have since received sufficient doses of the “medicine” necessary for bountiful harvests. At just N5, 000 per 50kg bag, fertiliser comes handy to those of us who plant on not-so-fertile soil that therefore needs to be nurtured. In this planting season, one commodity that is most valuable to Nigerian crop farmers obviously is fertiliser.
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Unlike us part-time farmers, many uninformed agriculturalists are oblivious of how fertilisers get delivered to them so cheaply these days. When I asked a few of them in my village how they were able to get fertiliser at just N5, 000 a bag, the answer I got was simply “government”. But which government? They didn’t know!
In a way, they’re right. For the past three years, the Presidential Fertiliser Initiative (PFI) programme has made fertilisers available to us with much ease. No longer are they imported and sold for N10, 000 or N12, 000 per bag; only a small fraction of raw materials is sourced from Morocco, and the finished products leave the blending plants now scattered in the agricultural belts of the country and are delivered to agro-dealers and state governments. They take the finished products from the blending plants and retail to the farmers.
In the 1990s, the media was awash with stories about fertiliser scams, as the products were diverted and sold to non-farmers who resold them at exorbitant prices. The ugly trend has since been silenced by the transparent process instituted about eight years ago while Dr Akinwumi Adesina was agriculture minister. Until recently, the persisting problem was that the price of imported fertiliser remained out of the reach of many — even the subsidised fertilisers couldn’t go round.
The PFI has been the President Muhammadu Buhari administration’s success story. And it runs smoothly. When the president spoke of food security, in his Democracy Day address to the nation last week, he couldn’t have forgotten to pay glowing tribute to the PFI for delivering “significant quantities of affordable and high-quality fertilizers to our farmers”, for reviving 31 blending plants, and creating “a significant number of direct and indirect jobs across the value chain”. Food-induced inflation has reduced and economic activities across the agriculture value chain have been stimulated. There is efficient supply chain and improvement of logistics management as well as stimulation of product innovation and development through use of expertise in producing scientifically recommended formulae adaptable to the needs of the Nigerian soil.
The barely seen power behind the PFI has been the Nigeria Sovereign Investment Authority (NSIA), the agency given the responsibility of implementing the programme. That is to say, the NSIA funds the crop farmer’s best friend (PFI).
The story of this friendship began in December 2016 while the president was delivering his 2017 budget address. He formally approved the commencement of the Presidential Committee on Fertilizer Initiative (PCFI) under the chairmanship of Jigawa State governor Mohammed Badaru Abubakar. The committee included representatives from the Nigeria Governors’ Forum, the Federal Ministry of Agriculture, the Central Bank of Nigeria, the leadership of the Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN), and the NSIA. NSIA was to source and procure the raw materials, contract with fertilizer blenders to blend the products under a contract blending arrangement, sell the fertilizer through the blending plants and receive proceeds for the fertilizer sale. The price of the product is always set by the presidency.
PFI’s annual revenue is a little more than N100bn but its costs are slightly more. So far, 31 blending plants have been resuscitated and accredited. In three years, PFI has delivered an average of 7million 50kg bags of NPK 20:10:10 annually — and it targets 12million bags in 2020. Over 1, 000 agro-dealers have been accredited. Government has been enabled to save foreign exchange that would have been expended on fertiliser subsidy or used to import bags of fertiliser.
Under the PFI business model, the four constituent raw materials required for production of NPK 20:10:10 are sourced and then blended locally at accredited blending plants to produce the commodity for delivery at N5, 500 per 50kg bag; it was reduced to N5, 000 effective April 2020. The four constituent raw materials required for the blending process are Urea, Diammonium Phosphate (DAP), Muriate of Potash (MOP) and Limestone Granules (LSG). NSIA helped to restructure the deal for importation of DAP and MOP (38% of inputs) from Morocco; the rest 62% of raw materials by weight, LSG and Limestone, is sourced locally. A cumulative total of 946,264 MT of NPK 20:10:10 fertiliser was produced from 2017 to 2019 under the PFI programme; 917,178 MT has been sold.
This year, NAIC-NPK Limited (a special-purpose vehicle through which the NSIA operates) has imported the constituent raw materials required for the blending of 600,000MT (12 million 50kg bags) of NPK fertiliser and has also commenced the sourcing and ordering of constituent raw materials required for the blending of 400,000MT (8million bags) under the other programmes. Production is gearing up ahead of the 2020 farming season.
The accountability status of NSIA led by Mr Uche Orji ranks second to none of all federal agencies. On its website (www.nsia.com.ng), I find reports of PFI’s audited financial statements from inception in 2017 to date. I see the qualitative and quantitative accounts of NSIA’s stewardship regarding all assets under the PFI: raw materials imported, sales made through accredited agro-dealers, reports of quality control at blending plants and so on.
The much-respected PricewaterhouseCoopers has audited the accounts of PFI from inception. Records show that, between 2017 and 2019, it invested N95bn and plans to invest N140bn in 2020. All 31 plants are audited regularly by internal and external auditors to ensure compliance with approved standards. There are strict controls over how raw materials and finished products are handled: Involved is a joint security task force supervised by the Office of the National Security Adviser. Movement, storage and general handling of raw materials and finished goods are monitored by appointed collateral managers who ensure quality, consistency in weight and mixture per bag of NPK 20:10:10 to avoid adulteration or under-bagging.
To ensure further quality control, the Institute for Agricultural Research, Zaria, was hired to conduct random tests on each batch of finished products. The price per bag at the gate of every PFI-accredited distributor is monitored – it remained N5, 500 until April 2020 when it was reduced to N5, 000. Neither NSIA nor NAIC-NPK is party to fertiliser sales of any sort; both are also not privy to or involved in the operations and functioning of the CBN’s Anchor Borrowers Programme.
What’s more, there’s a toll-free phone number on every bag of fertiliser that a whistleblower could call anytime. Nobody can collect fertiliser sales proceeds and put into personal accounts. Under the PFI, sales proceeds are received through partner commercial banks and paid into TSA accounts periodically. Settlement of credit sales is similarly routed and terminates in a TSA account. The way the programme is structured makes lodgments outside the designated accounts impossible.
All key stakeholders applaud NSIA for its governance system as well as its accountability. The investment institution remains committed to ensuring that all of us – almost every Nigerian adult is involved in farming now – are able to purchase high-quality domestically produced fertilizer at the advertised price from any accredited PFI distributor. A friend in need is a friend indeed.
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