Farouk Gumel - Agriculture accounts for 70% of the entire workforce in Nigeria and therefore, remains the sector that can massively lift Nigerian’s out of poverty in an inclusive and sustainable way. It is reported that Nigeria has 60 million hectares of arable land which is grossly underutilized. Our yields remain low and post-harvest losses are extremely high. For decades, Nigeria has relied on importation to meet its food security needs.
In the last 5 years, the Nigerian authorities have designed and implemented various trade, fiscal and monetary policies to support local food production and reduce post-harvest losses. One of these policies is the Presidential Fertiliser Initiative (PFI) which was launched by President Muhammadu Buhari in 2016. The program’s motive was simple. To locally produce fertiliser in an affordable manner. Nigeria has a lot of the key ingredients to make fertiliser locally but in the past, has been importing most of its needs and thus, ignoring the locally available resources. The PFI focused on optimizing the use of local ingredients and thus, only import those items that were not available at home.
For the imported raw materials, the Government of Nigeria entered into bulk purchase agreements with Phosphate and Potash suppliers from Morocco and Russia. For the locally available ingredients, similar bulk purchase agreements were signed with local suppliers of fillers and Urea. These ingredients used for producing NPK fertilisers, were distributed to local blending plants across the country. As local blending capacity expanded, policies (fiscal, trade and monetary) were introduced to restrict importation of NPK fertilisers.
As a result of this favourable setting, the number of operating blending plants in Nigeria increased from less than 10 in 2015 to over 40 in 2020. This has led to increased fertiliser availability across the country, thousands of jobs created across the value chain (blending, logistics and retail) and higher yields for farmers. It is fair to say that this program has led to a boom in Nigeria’s rural economy.
For Nigeria to continue to move away from its reliance on oil, more focus is needed on increasing food production and supporting the agricultural value chain. New PFI type programs in other value chain areas such as seed, agrochemicals and other inputs are needed. As evident in fertiliser, such policies result in investments and thus, job creation and ultimately, prosperity.
TGI, the parent company of WACOT Limited, invested in the rehabilitation of Edo Fertilizer and Chemical Company Limited, Auchi, which has the capacity to produce about 60,000 metric tonnes of NPK fertilizer per annum. The factory, which has been abandoned for decades, is now running on 3 shifts a day. The economy of Auchi, a town in the northern part of Edo State has been transformed as many direct and indirect jobs have been created.
Farouk Gumel, TGI’s Group Executive Director said, “our presence in Auchi has positively impacted the community”. “Our made in Auchi fertiliser is sold all over the country. We have truck drivers from everywhere coming to Auchi to lift the product. The business of the local food sellers, mechanics and other service providers in Auchi is booming as a result of these visitors” says Farouk Gumel. Furthermore, Farouk Gumel adds “we are also seeing an increase in the number of wholesalers and distributors looking to offtake our products. This also means more jobs in the retails and distribution aspect of the value chain”.
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