A Death Knell on Fertilizer Racketeering

 

 

 

In the past, the subsidy on fertilizer was a conduit where favoured individuals and companies would sweep all the money and pretended to have imported fertilizer, when there was really nothing.

But with the Presidential Fertiliser Initiative (PFI), fertilizer has become available and affordable. With increased capacity utilisation and opening of new blending plants in different parts of the country, the federal government was sure to achieve its target of food security, thereby saving billions of naira that would have gone into importation and the associated leakages.

To achieve this, the Fertilizer Producers and Suppliers Association of Nigeria (FEPSAN) became handy. The association is made up of plants and companies that produce fertilizers in Nigeria and also the distributors of these companies who distribute fertilizers to the farmers and retail outlets.

The Chairman of FEPSAN, Thomas Etu, told THISDAY that the initiative has saved the country millions of dollars that were initially embezzled.

According to him, sourcing 63 per cent of raw materials found in the country for inputs, have saved the country $200 million in foreign exchange.

“What we have done is to make sure that we adopt a cost-saving model as against the previous regime of subsidy. This programme therefore has also saved the Nigerian Government N60 billion in subsidy.

“Our programme is so tight that there is no type of subsidy in it which is why we called it a cost-saving model. This was how this initiative was born. Because we were importing the main active ingredients from Morocco, President Muhammadu Buhari himself initiated a trip to this country to negotiate with the Morocoan King on how we could get phosphate on a government-to-government basis.

“This yielded a good deal for the country in pricing. It was left for the committee to negotiate the potash with the government of Belarus.
“It was therefore the discounts we got from these deals and added to the value we got from sourcing 63 per cent of other raw materials locally that we then transferred to the farmers. And that was how we were able to reduce the price to N5,500 per bag.

This is so because we book the Agro dealers at N5,000 and allow them to sell to the end-users at N5,500, leaving them with a margin of just N500 for each bag sold.”
Etu also addressed the challenges of bringing competitors together especially given that the margins were not high.
“But we had to make people understand that we needed to get this done for the benefit of Nigerians. We are Nigerians and we need to create jobs for Nigerians.

“We have 32 blending plants in Nigeria that were moribund. Out of this, only five blending plants and at 10 per cent capacity because excessive emphasis was laid on importation, which also meant, by its very implication that we were exporting our jobs even when we cannot provide jobs here in Nigeria.

“Foreign exchanges that are scarce, we are spending it building other people’s economy. Anybody that is committed to this country will know that unemployment is raging like fire. Some of these factories you see, some of them have been out of operation for 15 to 20 years.

“So, we saw it as an opportunity to help get the country back on track. We were lucky that we have a president that has the interest and political will to make a difference and he was ready to make this initiative to work. And we had no option but to key in to this willingness.

“It was tough. I practically had to meet each and every one of them one after the other and make them understand that this is not politics but about building our nation and each one of us had a role to play. The president, during his speech at the inauguration of this Committee, commended the producers for dropping their differences as competitors and came together for the interest of the nation.

“He was also of the wish that other sectors, other industries would emulate what we were able to do at FEPSAN. The challenge was there, and they were challenges of business interests. But we have been able to surmount it because there was an overriding interest which was and still is the interest of Nigeria. More importantly, we saw the sincerity of the president and his team in seeing to it that this programme worked.

“Today, Nigerians can testify, farmers can testify that it has been a great initiative. I give you an example; the revolution that happened in rice production, the revolution that happened in maize production. Let me even go back to what happened in fertilizer production. What will interest you is that in 2017, because of the Presidential Fertilizer Initiative, Nigerians consumption stood at 1,570,000 metric tonnes of fertilizer.”

Also, the General Manager, Ebonyi Sate Fertilizer and Chemical Company limited and Senior Special Assistant to Ebonyi State Governor on Investment, Prof Ogbonnaya Chukwu, spoke on the gains recorded by the initiative.

“Now, if you allow it to attract much profit as maybe the desire of an astute businessman, the farmers may not be able to afford.
“I can tell you that throughout last year, every farmer in Ebonyi State and its environs none complained of non-availability of fertilizer unless you didn’t come to buy. It was made very affordable because NPK was sold for N5,500 to the farmers and agro dealers pick it at N5,000 a bag and sell to the farmers at N5,500.

“Agro dealers are registered business people involved in distribution, carrying fertilizer from point of production to the end users.
“They registered with FEPSAN. If you are not registered FEPSAN as an agro dealer, you cannot lift fertilizer under the PFI. The PFI intervention has been a very wonderful thing as far as fertilizer production is concern.

“We began production in April 13, 2017 and by August 30 same year, we have already produced hundred thousand and 46 bags and they farmers conveniently came here and bought 51,171 bags, which ordinarily they would have to travel far distances.”

In Plateau State, Jacob Gimbar Manu explained that initially, “people were sceptical about it, but we are knowing those behind it, we felt it’s not a programme that will fail. We felt our effort too is needed, let us support and see how we can contribute something to our nation.

“And with the big names in the sector and those that initiated the programme, they never monopolised the programme. If it was monopolised, we would have been suffering. There’s a level playing ground for everyone to participate and there’s fair play in every area of it.”
On the CBN expected loan to support the business, he revealed that the loan has not been disbursed yet.

He added, “The blending support fund you talked about has not been disbursed. But by the time that gets to us, we will definitely do better because you cannot expand in business without the support of financial institutions. If you are struggling with your hard-earned money, it ends at what you have. With financial support, you have ability to expand.

When asked to comment on the PFI initiative, Manu said “Sincerely, if you want to make proper analysis, you discover that it has reduced poverty within some areas. Poverty eradication is not just about giving you wealth, it’s for you to be able to at least have three square meal.

“When I talk about space, it is in terms of scale of your farming. I got testimony of farmers that where they used to apply 15 bags, now with eight bags, it gives them a better result with the PFI.

“The quality of the product and the way FEPSAN has put check in place, has drastically reduced the level of adulteration. Before now, I’ve seen farmers in my local government going for loan of N 100,000 and applying the fertiliser without effect and you see people collapsing and dying.

“Why? It’s because a poor farmer can’t get a loan of 100,000 to get a fertiliser that is not effective in his farm. But with the PFI, accessibility and quality is there, so the farmers are at rest.”
On his part, the executive secretary of FEPSAN, Mohammed Rabiu Kwa, argued that the initiative should be replicated in other sectors.