Agriculture stakeholders in Nigeria have been commenting on Presidential Fertiliser Initiative initiative set up less than three years ago to transform the agricultural sector in the country is closing in on accomplishing its mandates.
This is because the Presidential Fertiliser Initiative (PFI) which took off in 2017 following the visit of the King of Morocco to Nigeria in December 2016 and the subsequent signing of a three-year bilateral agreement with the North African nation for the supply of Di-ammonium Phosphate (DAP), a key ingredient for fertiliser production is seen to be expanding .
Prior to the agreement, the Nigeria’s fertiliser industry was in comatose, with only five blending plants operating below 10 per cent of installed capacity. Those who spoke to Daily Sun said no one expected a miracle to happen on account of the agreement between Nigeria and Morocco due to the well-documented cases of corruption that had plagued the sector, and which had shortchanged Nigerian farmers for decades.
But the mandate of PFI was to make high quality fertiliser available to Nigerian farmers at the right time and at an affordable price, while taking steps to revive the ailing fertiliser blending industry to help Nigeria achieve food security.
However, three years down the line, PFI has proven to be a legacy initiative that has changed the agricultural and agro-business industry in the country for good.
For instance a leading agriculture extension consultant Mr Damian Luka said the initiative has achieved a substantial chunk of its mandate in a way that recommends it as a model for government intervention in critical sectors and a template for government-led import substitution policy.
According to him, the involvement of the Nigerian Sovereign Investment Authority (NSIA) as managers of the initiative seem to have changed the dynamics for the President Muhammadu Buhari administration which hopes to diversify the economy away from oil into agriculture.
Having been invited to serve as programme operator and fund manager, the NSIA subjected the PFI to its own governance processes to ensure accountability and transparency at all stages of its procurement, production, and sale processes.
Available documents indicate that the PFI is operated under a governance system that subjects its operations to regular audit by PricewaterhouseCoopers, a reputable audit firm. Disclosures on the programme are made on the project in NSIA’s audited financial statements which are published annually on its website following rigorous internal audits and periodic reviews by the Office of the Accountant General of the Federation.
The PFI’s business model, according to insiders, involves sourcing for and procurement of four constituent raw materials required for production of NPK 20:10:10 fertiliser. Of the raw materials sourced, 37per cent of the input are imported, consisting of DAP from Morocco and Muriate of Potash (MoP) from Russia while the remaining 63 per cent of the raw materials, mostly Urea and limestone granules, are sourced locally.
The raw materials are blended locally at accredited blending plants nationwide to produce the fertiliser for delivery at a target price of N5,500 per 50kg bag (now N5000 per bag from April 2020).
Financial statements on the NSIA website indicate that since the inception of the scheme in 2017 up to 2019, N107billion has been invested in PFI while another estimated N114 billion is billed to be invested in 2020 – on items that cover raw materials, logistics, contract blending costs by 3rd party blenders among others.