Dangote: Solving Nigeria’s Fertilizer Crisis
Fertilizer has long been a source of consternation for Nigerian farmers. It is frequently in poor supply or just too pricey and out of reach.
The availability of the commodity, so critical to plentiful farming output, has defied all logic throughout the years, with the actions of intermediaries hoarding the product and a lack of appropriate local production capacity combining to aggravate the difficulties of farmers across the country.
To address the persistent issue, the Federal Government launched initiatives to push the agricultural and agro-allied industry as part of its economic growth goal.
President Muhammadu Buhari launched a fertilizer effort in 2016, which resulted in an increase in the number of indigenous fertilizer makers.
There were extremely few operational fertilizer factories prior to that year. The number has risen to more than 70, with the majority of them controlled by private-sector operators.
President Buhari opened one of these domestic fertilizer factories, the Dangote Fertiliser Plant in Lagos’ Lekki Free Trade Zone, on March 22.
It is thought to be Africa’s largest granulated Urea fertiliser factory, having cost 2.5 billion dollars and occupying 500 hectares of land. It can manufacture three million metric tonnes of urea fertilizer per year.
Analysts predict that this amount will fulfill nearly half of the country’s overall fertilizer requirement, which is projected to be seven million metric tonnes per year.
With the start-up of the Dangote Fertiliser facility, it is believed that the product would be accessible in big quantities when it is needed.
Dangote Fertiliser is also intended to make Nigeria and Africa self-sufficient in food production and a net exporter of food to the rest of the globe.
Dr. Joe Dada, Chairman of Livestock Feeds plc, believes that Dangote Fertiliser would bring in a large amount of foreign cash while also creating jobs in the nation.
“For me, it’s another crude oil shipment to Nigeria because the country will soon be an exporter of the commodity.”
“Nigeria recently ratified the Africa Continental Free Trade Agreement, so this is a significant platform for us to cover the whole African area.”
“As a result of Dangote’s investment, I see tremendous foreign exchange inflows,” he remarked.
Mrs Omolara Oguntuyi, Zonal Director, South-West, Federal Ministry of Agriculture and Rural Development, agrees.
“The facility will provide relief to the nation, especially because fertilizer is a major impediment to the country’s route to food sufficiency.”
“Over the years, the Dangote group has always reached rural regions to guarantee end-users received their products; we do not anticipate the fertilizers to be any different.”
Buhari stated during the plant’s inauguration that the 2.5 billion dollar project will increase Nigeria’s foreign currency profits and drive economic growth.
“This fertilizer factory is intended to support our administration’s efforts to achieve self-sufficiency in food production in the country.”
“I applaud Dangote Industries Ltd. for taking the business risk of creating this factory.”
“It will reduce our reliance on fertilizer imports, generate employment, enhance foreign exchange inflows, and drive economic growth.”
According to him, the building of the facility underlines Dangote Industries Ltd.’s dedication to the country’s socio-economic growth and the well-being of Nigerians.
The president expressed confidence that the plant investment would mirror the group’s previous success in the cement business, where it had established itself as a major name in Nigeria and beyond the African continent.
Mr Gideon Negedu, Executive Secretary of the Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN), believes that additional investments would continue to flow into the fertilizer business.
According to him, the federal government’s favorable policies are to blame for the recent increase in the number of fertilizer production facilities in the nation.
He stated that the fertilizer plants will fulfill the needs of farmers throughout the country.
“One difficulty with fertilizer is that the requirements of southern Nigeria are completely different from those of northern Nigeria since northern soil is not as rich as southern soil, which has a greater amount of nutrients.”
“Nigeria now has a domestic business that blends fertilizer to meet the specialized demands of farmers.”
“So, all farmers need to do is go to any local blender nearby and tell them that a soil test was done, and then the blender offers the farmer with adequate and even customized fertilizer,” he explained.
In response to complaints about the high price of fertilizer, he stated that the commodity’s price had increased globally, affecting fertilizer importation and purchase price.
A bag of fertilizer is claimed to cost between N20,000 and N23,000, depending on the manufacturer, fertilizer quality, and quantity.
However, because the item is mostly carried by road, operators allocate 30% of the cost to logistics.
Farmers, according to Dr. Akin Olonihuwa, ex-provost of the College of Agriculture in Kabba, Kwara State, want additional aid and support for their agricultural operations.
He stated that assistance was required, for example, in some sections of the country for land preparation for rice and other food crops.
According to John Olateru, head of the Commodities Association of Nigeria, what remains critical is the expansion of the federal government’s Anchor Borrowers Programme to the South, which he claims has remained lopsided mostly in favor of the North.
He said that the beneficiaries of the Central Bank of Nigeria-managed initiative had been primarily from the North since its commencement.
However, in order to assure the supply of fertilizer to farmers with the arrival of Dangote Fertiliser, stakeholders have asked for a complete revamp of the product distribution system.
Mr Lanre Oguntoye of the National Association of Chambers of Mines and Agriculture (NACCIMA) warns against allowing middlemen to offset the benefits of the new facility.
He noted that during the launch of the Dangote Fertiliser, Alhaji Aliko Dangote, Chairman of the Dangote Group, pledged product availability, stressing that the days of shortage were ended.
Mr Basil Okafor, a local farmer in Delta, feels that agriculture if given the required importance, can be the mainstay of the nation’s economy.
He said that the country has huge arable land in all six geopolitical zones to assist the government’s food security objective.
Chief Joseph Olanrewaju of the Organised Private Sector Exporters Association believes that federal government assistance for non-oil exporters will help attract much-needed foreign money, ultimately creating millions of employment opportunities across the country.
He stated that welcoming and supportive policies would not only enhance investor confidence, as shown in the fertilizer industry, but would also attract much-needed Foreign Direct Investments (FDIs) to the country.
However, as experts await the impact of the Dangote fertilizer facility, Mr Oboh Abumeri, a cassava grower in Edo, feels that food shortages may be addressed if fertilizer is made available to real farmers.
“The plant’s commissioning would put more food on the tables of ordinary Nigerians, generate employment and money, and assist the country in achieving the much-touted food security.”
“There are regrettable challenges of insecurity in the land that may distract farmers and impede effective supply across the country,” he said. “However, I am confident that such hurdles will be effectively addressed so that the nation can fully enjoy the full impact of the Dangote Fertilizer plant.”
Many analysts, like Abumeri, feel that the advantages of the Dangote Fertiliser Plant would be substantial, and they encourage stakeholders to help the business in order to properly address the fertilizer problem that has stymied Nigeria’s effective economic resurgence.
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