135
UiEGUARDlAN, Wednesday, /l ugusrlO,201l
1
~prp -r-- G
~ tJ:.;tr. t;S s
G4 QtP
C ]published It'I associaiion wilh
Nigeria: Increasing fertilisers production W hile :lgrit:llhllre accountS for ahom ... O~ of ilS national GO P. Nigeria currenlly prodLlce~ o nl ~' a Slllall portion of the lenill ..ercc illsumed b~' its larmcrs. Iloweve r, a radical change is in sigh t. with thc r{'celll announcemcnt tilal tWO new fe niliscr productiOn facil it ies will come on-line within Ihe Ilo::xt few years. On Jul~'lI. the Dangotc Group. the Nigeria-based m:-ulufat:luring co nglomcrat e , an nounced th at iI had s igned an ;:lgreemc:nt with Sa ipem, the Ita lian o il ami gas industly t:ontraClor. to build Africa's largest fe rtili serplanl. TIle fa ci liry, which is expected to he nperational hy 2014 , will hAve the ca pa c ity 10 produce around 7700 metric lonn es per clay (f\ IT PD) of granulated urea and 2200 ~ IT PD of ammOllia. ·Ihe plant , to be lo cated in Edo Smte, will provide \\"or),., fo r al leasl 7000 skilled iJIlt! unskilled labourers. plus thousands of indirect jobs in Oi lIer busin csses. According 10 some t;~tilllales, Nigeria imporls 95'10 ortiS fo::rtilisd needs, de!>pite lht! fat:t th.-.t it hilS ~ub~HmT ial rescrves of nat ural SitS, an input used in the prnduction of ammonia and urea fCI1i1isers. Aliko l)angme. t.he president of the UangOte Group. says the I.:ountry should not imp0rl products for wh ic h it locally has both raw materials and the ahiliry 10 prod uce. ~' Ih ere is no reason wh)' Nigeria should ut! imponing fert.ili scr,~ he said folJowillg th('slgning ceremony fur the new plant. Dangotc's commem echoed
a ct!mark by Pres ide nt Goodluck Jonathan, who lold a m eeti ng of bus incsspcop Ie in L'lgos on Mal' 23 he imended to haltlmp0l"lS of certain slapic goO<.ls, including ric~, sugar and fertiliser. by :t015. " By the end offollrycars, I believe Ihm Nigeria has no business impo l1ing rice. Nobody will come 10 m e with a brlefca...e and say to me he wants to Import feniliser. Wc have \'aSI land . and yel, we import all these essential goods,~ hc s,'lid. 'Ih e preSident 's declaration followed an announcement earlier in fo'lay that the gove rnIllent had approved Ih e building o f tWO fertiliser and methanol pl:uHs b}' Ihe Indorama Corporo tion. an Indonesian company that is the ~core il1\'eslor ~ in [Ieme Petrochem ica ls Co rporatiOn (EPCll, a foml e r stnte-owlled e nterprise. According to a statement by Prakash Lohia , the chairman of In dorama, Ihe fertili ser facility will be capable of pro ducing 1m tonnes of ammonia a nd u rea fert ilisers per year. -I he plants arc e:"'llCCled w begin operations in 2014 or 2015. lh tl n ew facilili es. valued al $ 1.8bn. wo uld be located a l Ihe existing EPCL complex in Port Harcoun in Rivers Slale, whil::h curren tly produt:es polymer resins Stich a~ polycthylene and polyprop~' l cn('. Sincc invcsting $-lOOm in 2006 to a cq Uire OJ 75% s take in EreL, Indorama has r€,\,i\'eu Ihe company, which \\',IS previously managL'(1 b)' the Nigeria National Petroleum Corporation . Whereas Nige ri a u se d to import 90% of its
propylene needs, the level is now only 3%. \-Vith Uangote and Inunrama both investing in major fertiliser production facilities. il seems Ihal there Is a \'er~' rea l prospecl that Nigeria could in the near future generate enough fertiliser to m eet domestic d emand. I loweve r, one issue remains to be addn.'Sscd: delivering lhe ou tput to farmers in a limldy fas hion, and at an affordable price. Nigeria has for many year~ struggled wilh how best to distribute ferlil isers to famlers, according to the IllIcllIatinna l Food Policy Research Institute ( IFPltI ). Between 1976 and 1997,I.IIe fertiliscr mari.et esscntiallyopemted as a Jlllhlic sector monoJlUl y, with Ihe fedcml gO\'crnment nctingas the sole supplier. -nlC government proc ured fertiliser (either domestically or \'ia impo rts). which \"as Ihell sold to the slates at heavily s ubsidised prices. Sincc 1997. the market has been I)aniall}' privatlsed. lhe
www,Ollfardbusineu9rOA1p.Cllm/CllunUY/nigeri.
government ~ontinLles 10 distribute fenJiber to the statcs but un a sma ll er scale and at lower discounts. Ilowever, the co-existence of free m arket and subsidised goods has created a problem , namel~' Ihe opportllniry for arbitrdge. -I hat is, fertiliser earmarked for delive ry to fMmers at subsidised pri ces cll n be d i\'crled and sold at markct prices. As On ajite Okoloko. the managing d irectorofNmore, a dom e~ l ic maoufacturcrofurea fertili ser, told OBG. "Over 70'10 of the subsidised fert ilisers ge l recrded back into commercial channels by middlemcn. so the <lenlal farmers never rcall)' receiv(' thc bcnefit of the prog.-allllne." Re<:eL1t efforls 10 address thi s iss ue include a voucher schcme. which hns been 1mplemcn h'd on a pilO! basis in several states. As pan of this programme, f.tnncJ"5 are gi\'\.'n \'OIlchers to purchasespcciRc produc ts at a lower price fmm 'Ituhorised deale rs.1l1e seller call the n redeem the vout:her
from the government to make lip thc d ifference belwco::n the mmket Hnd dist:m mted prices. 111 is stht.:mc has generalir bet:U pO!>iti\'ely received. A.:cord ing to ;in October 20111 study by Ihe IFPRI. particl palion in Ihe progra mme in cn:ast"d hoth the likelihood nfreceiving fert ilisers and the quantities Ihm were received. Prices \\"c:rt: hi~ht:r than under su m e Other subS idy pro grammes hllllhl!~' were generally 100\I~r thall Ihe marke t prit:e. I iI>",c\ er, the re port noted thai pankipaullg fann ers still of1t:n rt:ct:!\·ed Ihe ir fert ilbcr 100 late in tho:: sea!ooll to be of usc. Ibe new OangOle and EI'Cl procJut:tiull fatilities will certainly HO a IOIIK \Va~' t<,l\\'al'ds easing sup p!)' problems. nOlhingelse, tlisrribulOrs w ill no longer he de pende nt 011 imports. However, th e issue of transporting product from the fa c lOr~' to tb e farm re ma in s an olJl~tmldlng one.
Ir
G
Ol{l'ORU IiU SlttESS ~ROUP
Uli ltrl£lOfEOCE