By Job Osazuwa
It is a project that would excite Nigerian farmers as well as many others in different callings. A plant is being built in Akwa Ibom State that would tremendously boost the production of ammonia and fertiliser in the country.
A memorandum of understanding (MoU) on the plant was signed last week by the Nigerian government and OCP Africa, a leading phosphate/fertiliser producer in Morocco. The Nigerian delegation to the event held at the University Mohammed VI Polytechnic in Morocco was led by the Minister of State for Petroleum Resources, Mr. Timipre Sylva.
The MoU stated that the plant, believed to be worth $1.3 billion, would utilise Nigeria’s gas and Morocco’s phosphate to produce 750,000 tonnes of ammonia and one million tonnes of phosphate fertilisers annually by 2025.
The process, it was gathered, had commenced in June 2018 following the first phase of the Presidential Fertiliser Initiative (PFI).
And to ease the take-off of the project, several other agreements were signed by the parties. Among them is a shareholders’ agreement between OCP Africa and the Nigeria Sovereign Investment Authority (NSIA) for the creation of a joint venture company (JVC) that would oversee the development of a versatile industrial platform to produce ammonia and fertilisers in Nigeria; a pact between OCP Africa, Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN) and NSIA in order to commit to the second phase of the PFI; a framework agreement between OCP Africa, Mobil Producing Nigeria (MPN), Nigerian National Petroleum Corporation (NNPC), Gas Aggregation Company Nigeria (GACN) and NSIA on gas supply for the industrial platform; an MoU between OCP Africa, Akwa Ibom State and NSIA on land acquisition, administrative facilitation and common agricultural development projects, and MoU between OCP Africa, NNPC and NSIA to evaluate the opportunity of an equity investment by NNPC in the JVC and for its support on gas.
As part of the deal, farmers will be supported with locally produced quality fertilisers at competitive prices, among others.
The process for the project started in May 2017 when the Minister of Foreign Affairs, Geoffrey Onyeama, led a Nigerian delegation, that included the president of FEPSAN, Thomas Etuh, to the palace of King Mohammed VI in Rabat, Morocco.
At the meeting, both countries had an agreement to start the Morocco-Nigeria regional gas pipeline, expected to have a direct impact on 300 million people. The agreement covers a easibility study and a Front-End Engineering and Design (FEED) study on a gas pipeline from Nigeria to Morocco and, eventually, Europe. The two countries would have equal stakes in management and financing of the studies expected to be completed in two years.
There was also an agreement on the second phase of the PFI, which started when President Muhammadu Buhari hosted King Mohammed VI in Abuja, on December 3, 2016. After the visit, Morocco sent a cargo of phosphate to Nigeria. Through it, 11 blending plants were resuscitated, which led to the production of 1.3 million tonnes of fertiliser. The price of fertiliser crashed to N5,500 even as 50,000 direct and 150,000 indirect jobs were created.
At the Rabat event in May 2017, Onyeama had recalled: “During His Royal Majesty’s state visit to Nigeria, our two countries entered into a commitment to work in mutually beneficial ways to strengthen our bilateral co-operation in various areas, including agriculture, infrastructure and gas development. Eight weeks after that commitment was signed, phosphate produced here in Morocco was already being blended into fertilisers for agriculture 2,000 miles away in Nigeria under the programme known as the Presidential Fertiliser Initiative. The programme has revived several moribund fertiliser blending plants in Nigeria. It has so far created thousands of direct and indirect jobs, ensured that our farmers have access to good quality fertiliser at an affordable price and all these before the planting season.”
He attributed the success of the programme to the strength of the personal relationship between the two leaders plus the commitment, vision and leadership shown by them.
Onyeama said there were also discussions between the countries to start the proposed regional gas pipeline to connect Nigeria’s gas resources with those of other West African countries and Morocco. He stated that the initiative would promote regional economic integration and accelerate electrification and industrialisation in the mining, petrochemical, light manufacturing, agro-processing and fertiliser sectors.
Also praising the initiative, Morocco’s Foreign Minister, Nasser Bourita, said: “The Morocco/Nigeria gas pipeline project has a major historical significance that underpins the royal vision of an African continent that is master of its own destiny. This project is a convergence of the vision of Your Majesty and President Buhari for the development of the continent, a vision founded on afro-optimism.
“The project is designed by Africans and for Africans aiming for a sustainable development and an enhanced regional co-operation. The vision has the capability, the high expertise and know-how, relevant qualifications, adequate engineering and the right men and women to meet the challenge. The vision also has a number of previous success stories. Nigeria has a strong economy with the highest African GDP. Morocco has implemented world-class challenging projects. The project meets concrete needs relying on the potential of African gas resources on the one hand and the crucial role that energy can play to foster African development on the other hand. West Africa has a significant energy potential with 31 per cent of global reserves of natural gas resources. However, 200 million people don’t have access to electricity in West Africa. Only 45 per cent of energy needs are met. There are huge disparities in terms of energy among West African countries.”
He said the project would help integrate countries, which the pipelines would pass through, and create jobs and opportunities for their people.
Noting that ECOWAS producers as well as consumers could plug into the project to supply or be supplied, the minister said it would also enable West African countries to access a more reliable source of energy considered among the cleanest and least expensive for power generation.
“Several sectors will derive considerable benefits from the pipeline in terms of employment as well as industrial development. The sectors concerned include agriculture, power generation, health, tourism and others. This Atlantic pipeline offers unprecedented opportunity for the region, for the transfer of technology, industrial and energy platforms that will accompany this project will enable the population of the region and more particularly the youths to benefit from its economic impact in terms of employment and investment. The Atlantic pipeline will have also stabilising effect. History has demonstrated that regional integration is synonymous with peace,” he said.
Etuh, in his remarks on the fertiliser deal, emphasised the importance of food in development. He also listed the challenges in the first phase of the initiative and what was being done to tackle them.
His words: “It was not an accident that the two leaders decided to start this initiative with fertiliser. The King of Morocco and President Buhari decided to start with an input so that we can feed ourselves. Then we can have the energy to think to do this ambitious project that we have started. In Nigeria, we have a potential one eight million tonnes of fertiliser and we just started with a million tonnes this year and we are going to double it next year. We have a development programme to take this initiative to six million tonnes soon.
“When we started, there was a lot of logistics challenge, which we never envisaged. Today, it has become the Wonder of Africa. The fertiliser is affordable and it is delivered to the farmer. How do we make it more affordable to the farmer? Today, we have reached an agreement with OCP on how to solve the logistics problem. Both countries will be investing in the logistics. We are going to create inland logistics storage in the port and in the factory zone. We are guaranteeing the farmers cost plus profit.”
Group managing director of the NNPC, Mele Kyari, who was with Sylva in Marrakech, Morocco, said NNPC would also take equity in the venture that will produce 750,000 tonnes of ammonia and one million tonnes of phosphate fertilisers.