SPECIAL REPORT: How Buhari’s PFI programme boosts fertiliser supply for farming in Nigeria

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.

PREMIUM TIMES visited an agriculture extension office where the government-tagged NPK: 20:10:10 was displayed and could be bought for stipulated price. Every farmer this reporter spoke with in Kebbi said they have zero problems getting fertilisers for their crop. They, however, complained that the government-tagged NPK20:10:10 is too dense and does not cover as much portion of land as that they sold for N6,000 at the market.

In response, Ahmed Kwa, Executive Secretary Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN), said the PFI fertilisers are standardised for quality and quantity and that the farmers must be mistaking the NPK20:10:10 fertilisers with Urea.

“I don’t know the logical explanation of what you are saying. Let me assure you and farmers that the fertilisers under the initiative are produced using the same raw materials, same process, it has been checked before it leaves the factory and as far as the density or the volume of the 50kg is concerned it is standardised,” he said.

“Secondly, if it is because of the bag, there is difference between the bag of NPK and Urea because the density of urea is lower to that of NPK. So generally, Urea bags will appear a little bigger or filled than NPK bags. The weight is what matters, it must be 50kg. We set up some initiatives to check adulteration, less weight bags and even those that hoard markets. As far as it is under the Presidential Fertiliser Initiative, I assure you it is of good quality, standard weight,” he added.

Similarly, in Kaduna, farmers said they have no problem getting the NPK 20:10:10 to buy. However, Abdul-Rahman Musa, the Kaduna State coordinator of the Seed Poverty Eradication Multi-Purpose Co-operative Society (FEHDON), a subgroup of the All Co-operative Society of Farmers, alleged that dealers are extorting farmers.

“Fertiliser is sold between N7,000 and N7,500. The official price is N5,500. Before you make payment you must pay ‘egunje’ (bribe) of the difference. You must make a cash deposit of the difference. Cash payment of N2500,” he said.

When asked to name those perpetrating the fraud, he simply described them as the “drivers of the programme.”

“I don’t want to mention names. I am referring to those who are the drivers. We have evidence to back up our claims,” he said.

In response, Mr Kwa said though his association was unaware of this alleged sharp practice, it could have arisen due to scarcity and additional cost of logistics.

“As far as we are concerned the distributor is not allowed to sell for more than N5,500 that N500 will take care of his logistics and profit. But like experience has shown, the margin sometimes is too small.

“Someone wants to go to Lagos to buy fertiliser for N5,000. To bring it to up here each bag may cost more than N500. And he cannot bring it here and sell at a loss. So, some of the market forces has to be experienced. There is not much that can be done until the programme expands to cover more grounds where there are more blending plants across the country. If possible in each state, there should be a minimum of 102 blending plants so that they can be able to supply the fertiliser at a price without the traders trying to exploit the situation.

“Whatever you are doing in the market, the market forces have to be allowed to play. Nobody can control them because if there are scarcity, people will revolt and jack up the price. It is very difficult to control that if we don’t have sufficient quantity on the ground. So, I cannot rule out that kind of thing, but we have not received that report,” he said.

No Fertiliser To Buy

While the NPK 20:10:10 fertiliser is readily available in the north of the country and in Ebonyi and its environs, the same cannot be said for large parts of the South-west and parts of the South-south despite the presence of some of the revitalised blending plants in the regions.

In large parts of the South-west and South-south regions, a bag of NPK fertiliser is sold for between N7,000 and N8,000. Several farmers interviewed in Ekiti and Edo said they have heard of the programme but haven’t benefitted from it.

John Omoyajowo, the chairman, Maize Growers, Processors and Marketers of Nigeria, said the last fertiliser initiative his members enjoyed was during Growth Enhancement Support Scheme (GESS) of the immediate past administration when government subsidised half of the cost of fertilisers.

“In Ekiti State, before we see fertiliser used to be around July and August, when we have harvest the first batch of our crop, No fertiliser. We don’t get fertiliser at all. In Ekiti there is no fertiliser even in the open market. It is still difficult to get.

“We are not getting fertiliser. Though I don’t like to talk to journalists because it would appear as if someone is criticising the government. In Ekiti Sate it is not easy to come by fertiliser easily. Our depot is at ADA (Agriculture Development Authority) Office along Odo Ado, when you get there now you won’t see any fertiliser,” he said.

An official, however, gave a reason why farmers in Ekiti were not benefitting.

Kehinde Odebunmi, the Commissioner for Agriculture in Ekiti State, told PREMIUM TIMES, that the state did not participate in the PFI because it was required to make an Irrevocable Standing Payment Orders (ISPOs) before they could be supplied fertilisers.

“I know that we were invited to a meeting in Abuja when this issue of fertiliser came in that it should be blended locally. There were lots of proposals and they said the state should sign ISPO (Irrevocable Standing Payment Orders) it is an agreement signed by the state that a certain sum will be deducted from the state’s allocation and it is irreversible. Which is what is affecting Ekiti State now. The one the immediate past administration has signed. That is why what the state is getting is inadequate. So, the governor said he could no longer commit the state to further deductions from allocation otherwise everything will break down,” he said.

In Edo, the story was not different. Despite the presence of one of the revitalised blending plants in the state, Edo State Fertiliser and Chemical Company, Auchi Odigie, chairman of the state’s chapter of the All Farmers Association of Nigeria (AFAN), said the only fertiliser initiative enjoyed by members of his association since 2013 was the one initiated by the immediate past administration.

This article is a product of a partnership between PREMIUM TIMES and #Buharimeter to fact-check the viability or otherwise of the federal government’s PFI Programme.

Buharimeter is an initiative of the Centre for Democracy and Development (CDD) with support from the Open Society Initiative for West Africa (OSIWA) and the Department for International Department (DFID).