Dangote investment: Tackling Nigeria's fertiliser conundrum

The issue of fertiliser has been a knotty matter for farmers in Nigeria over the years. Very often, it is either in short supply or just too expensive and well beyond reach.

The supply of the commodity, so cardinal to bountiful farming output, has, over the years, defied all logics, with the activities of middlemen, who hoard the product, and lack of adequate local production capacity, combining to compound the woes of farmers across the country.

Eager to address the lingering problem, the Federal Government initiated policies to drive the agricultural and agro-allied sector as a component of its economic growth agenda.

In 2016, President Muhammadu Buhari introduced a fertiliser initiative which saw a surge in the number of local manufacturers of fertiliser.

Prior to that year, there were very few functional fertiliser plants. The number has increased to over 70, most of which are owned by private sector operators.

One of such local fertiliser plants, the Dangote Fertiliser Plant located at the Lekki Free Trade Zone, Lagos, was inaugurated by President Buhari on March 22.

Believed to be Africa's largest granulated Urea fertiliser plant, it was built at a cost of 2.5 billion dollars and occupies 500 hectares of land. It has the capacity to produce three million metric tonnes of urea fertiliser per annum.

Analysts believe that this quantity will meet almost half of the country's total fertiliser need, estimated at seven million metric tonnes per annum.

With the coming on stream of the Dangote Fertiliser plant, it is expected that the product will be available in large quantity as at when due.

It is also expected that Dangote Fertiliser will make Nigeria and Africa self-sufficient in food production and a net exporter of food to the world.

Dr Joe Dada, Chairman of Livestock Feeds plc, believes that Dangote Fertiliser will bring massive foreign exchange to the country and also create employment.

"For me, it is another crude oil to Nigeria because Nigeria will soon be an exporter of the product.

"Recently, Nigeria signed the Africa Continental Free Trade Agreement, so this is a major platform for us to cover the whole African region.

"I see massive foreign exchange inflow as a result of the Dangote investment," he said.

Mrs Omolara Oguntuyi, Zonal Director, South-West, Federal Ministry of Agriculture and Rural Development, has a similar view.

"The plant will bring succour to the nation, especially with fertiliser standing as a big hurdle on the nation's path to food sufficiency.

"Over the years, the Dangote group has always penetrated the rural areas to ensure the end-users got its products; we do not expect the fertiliser to be different."

While inaugurating the plant, Buhari had said that the 2.5 billion dollar plant would boost Nigeria's foreign exchange earnings and accelerate economic growth.

"This fertiliser plant is expected to enhance our administration's drive towards achieving self-sufficiency in food production in the country.

"I commend the Dangote Industries Ltd. for their business initiative in establishing this plant.

"It will reduce our dependence on importation of fertiliser, create jobs, increase the inflow of foreign exchange and accelerate economic growth."

According to him, the establishment of the plant demonstrates the commitment of Dangote Industries Ltd. to the socio-economic development of the country and the well-being of Nigerians.

The president expressed optimism that the investment in the plant would replicate the group's earlier experience in the cement sector where it had become a leading name in Nigeria and across the African continent.

Mr Gideon Negedu, Executive Secretary, Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN), is optimistic that more investments will still come into the fertiliser industry.

According to him, the good policy of the federal government is responsible for the recent surge in the number of fertiliser manufacturing plants in the country.

He said the fertiliser plants would meet the requirements of farmers across the country.

"One challenge with fertiliser is that the requirement of southern Nigeria is totally different from Northern Nigeria as the Northern soil is not as fertile as the southern soil, which has a higher level of nutrients.

"Now, Nigeria has a local industry that blends fertiliser to the specific needs of farmers.

"So, all farmers need to do is to visit any local blender around notifying them that a soil test has been done and then the blender provides the farmer with appropriate and even customised fertiliser," he said.

On complaints over the high price of fertiliser, he said the price of the commodity had increased globally, which affected fertiliser importation and purchase price.

A bag of fertiliser is said to cost between N20,000 and N23,000, depending on the company, quality of fertiliser and size.

But operators have attributed the 30 per cent of the cost to logistics, as the commodity is transported mainly by road.

For Dr. Akin Olonihuwa, ex-provost of the College of Agriculture, Kabba, Kwara State, farmers need more support and assistance for their production activities.

He said that support was needed, for instance, in land preparation in some parts of the country, for rice and other food crops.

To John Olateru, chairman, Commodities Association of Nigeria, what remains crucial is the expansion of the federal government's Anchor Borrowers Programme to the South, arguing that it had remained lop-sided mainly in favour of the North.

He claimed that since the inception of the programme handled by the Central Bank of Nigeria, the beneficiaries had been mainly from the North.

But to ensure availability of fertiliser to farmers with the coming of Dangote Fertiliser, stakeholders have called for the overhaul of the entire distribution system of the products.

Mr Lanre Oguntoye of the National Association of Chambers of Mines and Agriculture (NACCIMA), particularly cautions against allowing middleman to neutralise the gains expected from the new plant.

He recalled that during the inauguration of the Dangote Fertiliser, Alhaji Aliko Dangote, Chairman, Dangote Group, promised availability of the products, saying that the days of scarcity of the product were over.

Mr Basil Okafor, a local farmer in Delta, believes that agriculture can be the main stay of the nation's economy if given the necessary priority.

He said the country had vast arable land in all the six geo-political zones to support the nation's food security agenda.

Chief Joseph Olanrewaju of the Organised Private Sector Exporters Association, believes that support of non-oil exporters by the federal government would help in attracting the much needed foreign earnings, thereby creating millions of jobs across the country.

He said that friendly and conducive policies would not only boost investors' confidence like the case of fetiliser sector, but also attract the much needed Foreign Direct Investments (FDIs) to the country.

But while analysts await the impact of the Dangote fertiliser plant, Mr Oboh Abumeri, a cassava grower in Edo, believes that food shortages will be tackled if fertiliser is made available to genuine farmers.

"The coming on stream of the plant will put more food on the tables of common Nigerians, create jobs, wealth as well as help the country attain the much talked-about food security.

"There are regrettable challenges of insecurity in the land which may distract farmers and frustrate effective supply across the country, but I am confident that such hurdles will be effectively tackled so that the nation will fully enjoy the full impact of the Dangote Fertiliser plant," he said.

Like Abumeri, many analysts believe that gains from the Dangote Fertiliser Plant are massive and urge stakeholders to support the group so as to effectively tackle the fertiliser conundrum that had stood on the path to Nigeria's effective economic revival.