Iran War: NACCIMA, NECA, Varsity Dons Task FG on Proactive Policy Incentives for Nigerian Fertiliser Manufacturers

• Fear fertiliser scarcity may lower crop production by 20 to 50% 

• Canvass revisiting Nigeria’s fertiliser policy to create strategic fertiliser reserves

Dike Onwuamaeze

As Iran’s blockage of shipping along the Strait of Hormuz squeezes global fertiliser supply chain, National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Employers’ Consultative Association (NECA), and some university dons have advised the federal government to adopt proactive policy incentives that would encourage fertiliser blending plants in Nigeria to produce more and sell their products to Nigerian farmers this planting season.

They stressed, in separate interviews with THISDAY, that policy incentives, such as temporary tax concessions, logistics support, and guaranteed bulk purchases, were urgently needed to ameliorate the effect of the global squeeze on shipment of fertiliser raw materials and products.

The incentives would protect Nigeria’s food and nutrition security, avert potential decline in crops production, and tame high food inflation, the groups said.

They advised the government to revisit Nigeria’s fertiliser policy to provide for strategic fertiliser reserves. 

Chairman of NACCIMA Agriculture Trade Group, Mr. Kabir Ibrahim, told THISDAY that the way forward “is to properly and transparently subsidise local fertiliser production for three to five years”.

Ibrahim asserted that almost 100 fertiliser blending plants in Nigeria “are up and doing and can work optimally if both the farmers and the blenders are directly subsidised by government in order to be able to produce affordably priced fertilisers”.

He added that National Farmer Soil Health Scheme should be used to “reinvigorate fertiliser blending and utilisation so that we can produce soil and crop specific fertilisers going forward”.

Director-General of NECA, Mr. Adewale-Smatt Oyerinde, said, “At a time when global supply chains are facing disruptions, expanding domestic blending capacity and ensuring steady access to raw materials will be essential to maintain fertiliser availability for farmers and support national food security.”

Oyerinde added that Nigeria had made significant progress in fertiliser production with three major urea plants that had combined production capacity of about 6.5 million metric tonnes annually.  

He said, “Nigeria’s response should focus on strengthening resilience within the agricultural input supply chain.

“Key priorities should include expanding domestic fertiliser production and blending capacity to reduce dependence on external supply shocks.”

He also canvassed “supporting private sector investment in fertiliser manufacturing and distribution” as well as “improving logistics and distribution networks so that fertiliser can reach farmers across the country efficiently”.

Oyerinde said, “Strengthening domestic production and ensuring efficient distribution will be essential to stabilising food supply and protecting farmers from global market volatility.”

Speaking in a similar vein, Professor of Agricultural Economics, Afe Babalola University, Ado Ekiti, Professor Samuel Igbatayo, told THISDAY that the Nigerian government should adopt a proactive policy aimed at providing sufficient fertiliser for the upcoming cropping season.

Igbatayo said, “It should be emphasised that the best approach is to source the product from domestic producers at market prices and refrain from forcing them to abandon exports, which would discourage investors and lead to a loss of confidence in the Nigerian economy.”

He added, “This should be supplemented by importation of sufficient quality for the Nigerian farmers at subsidised prices, owing to the resource poor condition of the farmers.”

Similarly, Senior Lecturer at the Department of Agricultural Economics, University of Nigeria, Nsukka, Dr. Chris Onyekwe, told THISDAY that crop yields would likely decline significantly for the next two seasons if farmers failed to have access to fertiliser products this planting season.

Onyekwe said, “Without adequate fertiliser application, farmers cultivating staple crops, such as maize, rice, sorghum, cassava, and vegetables, may experience yield reductions, ranging from 20 to 50 per cent, depending on the crop and the region, which will in turn trigger demand pull inflation and significantly affect the real Gross Domestic Product (GDP).

According to him, “In times of strategic supply disruption, such as the current geopolitical crisis, there is a strong economic and food security case for Nigeria’s large fertiliser manufacturers to temporarily prioritise the domestic market.

“The government does not necessarily need to compel firms immediately. A cooperative approach may work better. Authorities could engage manufacturers through negotiated supply commitments for the planting season.

“Policy incentives, such as temporary tax concessions, logistics support and guaranteed bulk purchases could encourage firms to allocate a defined share of production to Nigerian farmers.”

He emphasised that “food security is a national strategic priority, and ensuring fertiliser availability during the planting season is critical”.

Onyekwe added that reviving fertiliser blending plants would be a strategic move.

He stated, “However, revival should be accompanied by private sector participation, transparent management structures, and strong regulatory oversight to avoid the inefficiencies that led to their earlier decline.”

He also said the current situation had highlighted the need to revisit Nigeria’s fertiliser policy with a focus on resilience and self-reliance.

“Key areas that require review include strategic fertiliser reserves similar to strategic petroleum reserves and incentives for domestic production and blending, etc.,” he said.