How global crisis hurts fertiliser access in Nigeria

ANOZIE EGOLE writes on challenges facing fertiliser access in the country and way forward

At a workshop held in Lagos by the United States Agency for International Development in June this year, about 35 fertiliser industry stakeholders from Nigeria and Niger convened to discuss regional fertiliser trade and cost structures. They also deliberated on ways of facilitating linkages between fertiliser traders in both countries.

The ‘Feed the Future Enhancing Growth through Regional Agricultural Input Systems’ project funded by USAID for West Africa was implemented by the International Fertiliser Development Center to improve regional fertiliser availability and use for smallholder farmers. The essence of this is to increase their yields and improve their general well-being.

HortiNigeria, the fertiliser sector reform support project in Niger, and the West African Fertiliser Association also contributed to the organisation of the workshop. The workshop was a necessary inquiry aimed at minimising costs and improving access to fertiliser in West Africa, as Nigeria emerges a fertiliser powerhouse.

It was observed that since 2019, the fertiliser trade has suffered disruptions due to the COVID-19 pandemic and, more recently, the Russia-Ukraine war, which has threatened food production in the region. This has been a major source of concern, especially for countries like Nigeria, which could be said to be predominantly farmers, though at a small scale.

Before the workshop, EnGRAIS, in collaboration with, another IFDC initiative, conducted a study to examine all the processes and costs involved in delivering fertiliser from the manufacturing plants to the farmer, including cross-border movement.

That study served as the basis for discussions to determine ways of establishing linkages and facilitating the fertiliser trade across the region, especially between Nigeria and Niger. The stakeholders from the two countries reviewed and validated the results of the study and helped to explore how trade linkages between the two countries could be improved.

The Head of Marketing, Indorama Fertiliser, Nigeria, Dr S.K Srivastava, said that the conference developed a template on how to export the product.

“The conference developed a good template that highlights the step-by-step requirements to legally export our high-quality urea to Niger and other West African countries. We were able to discover legal means and procedures for exporting urea to Niger. Government agencies from both countries disclosed the official trade channels and routes we plan to explore.”

A major outcome of the workshop was a communiqué containing observations and recommendations addressed to strategic regional fertiliser sector trade facilitators and actors, including the Economic Community of West Africa States, regional fertiliser associations, and the respective governments of Nigeria and Niger.

The key actions recommended included: Facilitation of collaboration between the Central Bank of West African States and the Central Bank of Nigeria to ease transactions for fertilizer trade in the local currencies; acceleration of the operationalisation of quality control collaboration in the region through the West Africa Committee for Fertiliser Control and  the increase in bilateral collaboration on fertiliser trade and quality control between the two countries by developing a consistent dialogue between the relevant authorities.

Other recommendations involved simplification of the process of exporting fertiliser by road from Nigeria to other ECOWAS countries, engagement of the two governments to learn about as well as the use the free trade zones and dry land ports, which have the potential to reduce costs significantly.

At the event, the president of ANIDE, Addoulaye Oumar, said, “It is a great opportunity to offer a sustainable relationship for a win-win situation. We engaged directly with fertilizer manufacturers who were represented, for example, Dangote, Indorama, and Notore. We had the opportunity to visit the Dangote fertiliser plant and to discuss the barriers to trade at the borders, and problems faced on the road. It was an opportunity to present the problems and come up with possible solutions,” he added.

Currently, Nigeria produces 6m metric tons of urea and has more than 70 blending plants. However, most of its production is currently exported to Brazil and India, with about 1.8m metric tons consumed locally.

In the meantime, neighboring countries with great potential for fertiliser consumption and food production, such as Niger, struggle to access fertiliser. Facilitating the fertiliser trade between Nigeria and the rest of the region has become more crucial in the wake of the fertiliser crisis that has created a shortage in most countries that had earlier been relying on importation from overseas.

Experts have argued that smuggling and the ongoing Russian-Ukraine war are among  reasons for the skyrocketing prices of the product. They argued that the prices have made the product seem inaccessible to farmers.

 They opined that before the war, some West African countries preferred to bring in these commodities from Europe but due to the ongoing crisis and with the coming on board of Dangote Fertiliser plant, they now tended towards getting the product from countries like Nigeria producing fertiliser. However, it is still enough for farmers, they said.

 A staff of a major fertiliser manufacturing company in West Africa, who doesn’t want his name on print, blamed smuggling of the fertiliser products as the reason for the scarcity of the product at the moment.

He also said that before anyone could think of supplying fertilisers to neighboring countries, they must look inwardly to satisfy the local consumers.

“You have to, first of all, satisfy your internal customers and that is what we have done. Before you start talking about other countries, you have to first satisfy the need of our farmers. But you know that people still smuggle petrol to other countries because these things are expensive there and this is the same thing we still see with fertiliser. They smuggle it because they sell at higher prices abroad and they also earn foreign exchange.”

According to him, “So, the attraction for both farmers is getting these things outside of the country, and that is just it. They sell N17,500, which is normal, because of this global challenge

“So, they are now looking towards Nigeria to get these things. Nigerians started pushing up the price and smuggling the products. So, it is just what is happening in the global economy that is impacting on it. And you know that these countries are nations with dry land and they have been depending on fertiliser from Europe. These things are no longer the way they were and they have to look for ways.”

Fertiliser prices have risen astronomically due to the global economic crisis fuelled by the Russia-Ukraine war.

Nigerian farmers themselves are seeking alternatives to artificial fertilisers, with some strongly embracing compost.

“I am not able to buy fertilisers because of the price here in Nigeria. I use cow dung and other forms of manure. Every time we hear that government is bringing fertilisers, but it hardly gets here,” a Benue State-based farmer, Isa Ahmadu, said.

Claims of diversion of fertilisers have pervaded the agriculture space, with some accusing portfolio farmers for blocking fertilisers.

In a recent series of stories done by the International Centre for Investigative Reporting, farmers said their incentives were being diverted by politicians.

But the President of Nigeria Agric Import Dealers Association, Kabir Fara, advised that proper collaboration and agreement among West African countries was the surest way of achieving proper and equitable supply of these products.

He lamented that up till now, government policies were not aligning to the goal.

“We can achieve that through inter-regional collaboration agreement such as an agreement with OAU and the rest. There is an agreement on how they operate in West Africa. But up till now, our policy is not going on well in that regard.”

Fara canvassed 35 per cent of local fertilisers for Nigerian consumption while the rest 65 per cent should be exported to other African countries.

“We have nitrogen production in Nigeria, which is made not only for Africa but for the international market.  Indorama and Dangote are competent. They should dedicate 35 per cent of their usual production to the local market and can export 65 per cent. If they are actually producing the 35 per cent at their capacity level, it is even too much for Nigerian market.

“Now, the companies are independent of the government, so it is a free market. There is no embargo on exporting fertiliser in Nigeria. But for our Nigerian consumption, which is NPK, we have to source the raw materials from outside. We have gas and ammonia, so we can produce nitrogen as far as gas is available. We can produce not only for Africa.”

Speaking on the prices of the products, he said that anybody who complained that the product was expensive did not understand what was happening in the world market.

“The people who complain on the prices do so because they do not understand what is happening in the world market. These companies are not only owned by Nigerians even though they are in the Nigeria sphere. They borrow their money from the World Bank for their production. So, if in the world market, urea is being sold for like N30,000. Should they be selling at N18,000? It is our sincere request that they should not sell all their products outside Nigeria because of money, but have to look at local market to help Nigeria grow in agriculture. That was why that agreement was reached.”

According to him, “Remember, for example, they have to repair the machine and do some other things. Foreign currency is not available even the CBN cannot give them. Look at the airlines, some of them do not want to come to Nigeria because they sell their tickets in naira and there is no dollar to send to their countries. So, for these companies to even have money to repair their machines, repay foreign loans, they need the forex and it is not available. So, they have to sell their products in the global market to get the forex.”

Article first published on the Punch Website

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