Peter Uzoho with agency report
The Presidential Fertilizer Initiative (PFI) which took off in 2017 has contributed significantly to the transformation of the agricultural sector in the country, a report has disclosed.
According to the report, prior to the PFI, Nigeria’s fertilizer industry was in comatose, with only five blending plants operating below 10 per cent of installed capacity.
The mandate of PFI was to make high quality fertilizer available to Nigerian farmers at the right time and at an affordable price, and to revive the ailing fertilizer blending industry so that Nigeria could achieve food security.
THE WHISTLER stated that the involvement of the Nigerian Sovereign Investment Authority (NSIA) as managers of the initiative have changed the dynamics for the President Muhammadu Buhari administration which hoped to diversify the economy away from oil into agriculture.
Having been invited to serve as programme operator and fund manager, the NSIA subjected the PFI to its own governance processes which ensured accountability and transparency at all stages of the procurement, production, and sale processes.
The PFI is operated under a governance system that subjects its operations to regular audit by PricewaterhouseCoopers, a reputable audit firm. Disclosures on the programme are made on the project in NSIA’s audited financial statements which are published annually on its website following rigorous internal audits and periodic reviews by the Office of the Accountant General of the Federation.
The PFI’s business model, according to insiders, involves sourcing for and procurement of four constituent raw materials required for production of NPK 20:10:10 fertilizer.
Of the raw materials sourced, 37 per cent of the input are imported, consisting of DAP from Morocco and Muriate of Potash (MoP) from Russia while the remaining 63 per cent of the raw materials, mostly Urea and limestone granules, are sourced locally.
The raw materials are blended locally at accredited blending plants nationwide to produce the fertilizer for delivery at a target price of N5,500 per 50kg bag (now N5000 per bag from April 2020).
Financial statements on the NSIA website indicate that since the inception of the scheme in 2017 up to 2019, N107 billion has been invested in PFI while another estimated N114 billion is billed to be invested in 2020 – on items that cover raw materials, logistics, contract blending costs by third party blenders among others.
Insiders explained that the programme has revived operations in a total of 31 blending plants thereby increasing domestic production capacity by nearly 300 per cent and improving the quality of fertilizer available to domestic farmers.
“This cannot be possible without strict control systems which ensure that we monitor the flow of materials and funds,” said a source at the PFI, adding that “the auditors have yet to report any case of fraud due to the controls that had been put in place.”
For instance, he said to mitigate against pilferage under the programme, there is a joint security task force which is superintend by the Office of the National Security Adviser (ONSA).
The task force oversees the monitoring of movement, storage and general handling of raw materials and finished products alongside appointed Collateral Managers who ensure quality, consistency in weight and mix per bag of NPK 20:10:10 to avoid adulteration. A manual seen by this website states that all 31 blending plants are subjected to the continuous audit process of the PFI to ensure compliance with approved standards while all incidents are thoroughly investigated by all the parties involved in monitoring the program – ONSA, collateral managers, FEPSAN, NSIA, and External Audit firms.
The price per bag at the gate of any PFI accredited distributor is monitored and has remained N5,500 per bag since inception until recently when it was reduced by President Muhammadu Buhari by N500 per bag, to N5,000 with effect from April 2020, as a covid-19 palliative and shortfalls in cost is paid to the NSIA.