President Muhammadu Buhari has approved the deployment of operatives of the Economic and Financial Crimes Commission (EFCC) to check whatever fraudulent activities might undermine the implementation of the Presidential Fertiliser Initiative (PFI).
This directive was communicated via a memo by the Chief of Staff to the President, Ibrahim Gambari, on Tuesday.
“Kindly note that Mr President has directed the deployment of EFCC operatives to work with the Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN) monitoring team to control all criminal activities undermining the implementation of the PFI,” Mr Gambari said, according to the letter exclusively obtained by PREMIUM TIMES.
He warned that the president also “approved the removal of any participating blending plant from the PFI if found to be in contravention of the guidelines governing the programme.”
Following reports of fertiliser diversion by two major blending plants under the PFI programme, a source familiar with the president’s sudden move said it is a necessary measure needed to curb such dubious acts.
Diversion of fertilisers
Nigeria’s drive to boost agriculture and food production has in part been undermined by shortage of fertiliser.
Government efforts to increase the supply and reduce cost of the commodity were in some cases hijacked by middlemen whose activities ensured farmers did not have the products or pay the government-approved rates for them.
According to the 2019 financial statements of the Nigeria Sovereign Investment Authority (NSIA), despite the best efforts by all parties concerned to forestall stock loss and ensure raw material inputs translate to output for domestic production of NPK 20:10:10, a brand of fertiliser, some incidents of unauthorised lifting of the product was discovered at Bauchi Fertiliser Company and Bejafta Group Nigeria Limited.
The NSIA said the development was escalated to the security agencies for investigation, and that the blending plants involved in the fraud were delisted from participating in the 2020 PFI until the amounts owed — ₦600 million and ₦1.031 billion — (by Bauchi Fertiliser Company and Bejafta Group Nigeria Limited respectively) were fully settled.
The NSIA, in the financial statement, noted that in line with the relevant accounting standards, the full amount of ₦1.6 billion has been recorded as inventory loss and charged to the income statement.
The investment institution, which is saddled with the mandate of managing Nigeria’s sovereign wealth fund, said it was able to detect diverted stock because its system is being audited intermittently.
The Bauchi Fertiliser Company has nearly completed payment for all the diverted products, while Bejafta Group Nigeria Limited has N400 million outstanding.
The NSIA said it has recovered 80 per cent of the funds equivalent of the diverted stock from the companies.
“The recoveries already made will be recognised as income in our 2020 annual report,” the NSIA said.
The NSIA overall handling of the PFI has been impressive and so are the levels of transparency and disclosure of key information about the programme.
Under NSIA oversight, about 32 million bags of fertiliser were produced in four years, out of which only 300,000 of the stock were lost.
“If one looks at it critically, the incident involving those two companies was miniscule in the grand scheme of things,” NSIA spokesperson, Titilope Olubiyi, said.
He said his agency had in place “layers of scrutiny the process is subjected to in order to ensure that losses are kept to the barest minimum.”
Mr Olubiyi said the NSIA detected the two incidents itself and elaborately reported it in its 2020 annual report.
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