Chairman, TAK Agro Group, Thomas Etuh, has described as baseless, claims making the rounds that his company, in connivance with others, diverted proceeds from the sales of fertilizer under the Presidential Fertilizer Initiative (PFI).
Mr. Etuh is Nigeria’s largest investors in the agricultural inputs and logistics value chain apart from Indorama and Dangote. He was also the President of the Fertilizer Producers and Suppliers Association of Nigeria (FEPSAN).
As President of FEPSAN he was invited by the Federal Government of Nigeria to help facilitate the desire for Nigeria to become self-sufficient in fertilizer production and also to make fertilizer affordable for farmers.
He explained that contrary to insinuations in the report, the PFI program is a public-private partnership superintended by the Nigerian Sovereign Investment Authority (NSIA) with established control measures that makes it impossible for one person to orchestrate financial leakage in the scale contained in the allegations.
The first erroneous claim in the report, according to him, is that N300 billion has been “siphoned” from the Presidential Fertilizer Initiative (PFI) of President Muhammadu Buhari’s administration between 2017 to date, saying there is no material truth in the claim.
“There is no way this could ever have been possible, given that N300 Billion is the equivalent of $783 million at the exchange rate of N383 to $1 or $923 Billion if we use the base rate of N325 to the $1 as was the case in 2017. It is then easily verifiable that the PFI is project, which is managed on borrowed funds under the CBN’s Real Sector Support Funds (RSSF) could never have accumulated such sum, knowing that as at 2017 the entire borrowing was no more than N50 billion. It is important to also emphasise that this sum is a loan that has to be paid back with interest. So even if you accumulate the total loan sum from 2017 to date it, does not amount to N300 billion, making it impossible, for N300 billion have been siphoned from the programme,” he stated.
He also denied the allegation that NSIA provided the blenders with funds that attracted no interest or collateral. Explaining that all the blending plants were mandated to provide Performance Bonds before receiving raw materials and that NSIA must confirm payment before allocation.
Giving details of how the PFI programme works, the agro investor said; “Firstly, the goal of PFI is to provide Nigerian farmers with good quality fertilizer on time and at an affordable price. To achieve the pricing goal, the program simply aggregated the raw material requirements to achieve scale which it leveraged in purchasing all the raw materials required for blending the fertilizer. All the savings achieved in so doing were passed on to the farmers. You may recall that in December 2016 the King of Morocco, His Royal Majesty Mohammed VI, paid a 2-day state visit to Nigeria. During the visit, the two leaders signed several agreements, one of which was a Partnership between the Fertilizer Producers and Suppliers of Nigeria (FEPSAN) and OCP, a state-owned Moroccan company and a world leader in phosphate and its derivatives. In the agreement, OCP would supply discounted phosphate to Nigeria, to help support the domestic blending of NPK Fertilizer starting in 2017. To ensure the success of the programme, NSIA secured N50 billion in RSSF loans at single digits with the aim to ensure the savings were passed on to the farmers. This was how in 2017 the programme was able to achieve the goal of selling fertilizer at N5,000 per bag ex-blending plant and a recommended retail price of N5,500 per bag?”
Mr Etuh said the outcome of the government’s intervention was the increase in Nigeria’s blending capacity from six blending plans in 2016 to 34 in 2020, a development that has created more than 100,000 jobs for Nigerians.
On allegations that his company diverted some of the raw material imported to facilitate the blending of local NPK fertilizers, he said neither hi company nor any member of FEPSAN is involved in importing raw material for fertilizer blending. He further said blending plants in Nigeria are under obligation to not just meet quality and quantity standards but also to ensure that their blended NPK fertilizers are adapted to the local environment.
“I am aware that there are elements in the Nigerian business environment that are determined to go to great lengths in an attempt to scuttle the gains so far made through the PFI programme. The importation regime that the administration of President Muhammadu Buhari has shut down was profiting a few people at the expense of Nigerian farmers and the federal government. Those in this clique apparently want to throw in everything to ensure a return to the old order. But it is on record that through the Presidential Fertilizer Initiative, the Buhari administration has, with a single programme, solved the cartelization of fertilizer business with all the subsidy racketeering associated with it,” Etuh said.
Mr. Etuh insists that those behind the spurious allegations are briefcase businessmen that are determined to return the country to the era of fertilizer importation and subsidy regime that hitherto has cost the Nigerian economy over $150 million foreign exchange leakages and about N60 billion in fertilizer subsidies every year.
Listing the gains made by the Federal Government of Nigeria through the programme in the three and half years it has been implemented Etuh reflected the increase in Nigeria’s blending capacity, adding that additional investments are expected in the industry with expected revamp of older while about eight new ones are in various stages of completion.
“There has been a significant increase in investments to train and acquire the technical capabilities to operate and manage these blending plants. From January 2017 to-date, the PFI has accounted for over a million tons of NPK fertilizer production in country. This is the largest ever sustained local production of NPK within the country. In 2016 NPK fertilizers were reportedly sold at between N11,000 to N13,000 per 50kg bag in some places. However, the PFI crashed the price of a 50Kg bag of fertilizer to N5,000 ex-blending plant,” he revealed.
Continuing, Etuh said that under previous government’s fertilizer subsidy regimes, farmers limited to just two bags of subsidized fertilizer, but the PFI programme has enabled them to buy as many bags as they wished and at affordable prices.
Highlighting an estimated forex savings of between $300 million and $400 million, he said the partnership between FEPSAN and government has also saved the country an estimated N200 billion in fertilizer subsidies, while also stimulating economic activities in the areas of direct labour at the plants and he ports, transportation of raw materials and finished goods, production of bags and other micro economic activities in and around the blending plants. These developments, he said, had attracted the praise of local and international institutions and groups, among which include; the Fertilizer Working Group, the West African Fertilizer Producers Association, among others.