Moments after commending the Dangote Industries Limited as the second-largest employer of labour in Nigeria after the Federal Government, President Muhammadu Buhari has tapped the company for the creation of more jobs on the back of its fertiliser plant, which was inaugurated in Lagos yesterday.
Apart from jobs created directly and indirectly by the facility, Buhari described the core product, fertiliser, as an invaluable input for the agric sector, one that would guarantee increase in farm productivity and invariably attract more entrepreneurs into agribusiness.
The building of the plant, he said, would “reduce our dependence on importation of fertiliser, create jobs on a massive scale, increase the inflow of foreign exchange and accelerate economic growth.”
He described the coming on stream of the plant as one that would create huge opportunities in the areas of job creation, trade, warehousing, transport and logistics. These, he said, would create significant wealth, reduce poverty, improve health of people and help secure the future of Nigeria.
“Many Nigerians who practice subsistence farming because of the unavailability of necessary input (i.e. fertilisers) can now take up agriculture as a business,” said Buhari. “We expect the rise of a new breed of agropreneurs who will add value to farming and make the nation self-sufficient in food production.”
Nigeria’s fertiliser deficit, which has contributed to poor farm outputs, as well as scarce foreign exchange that has limited the ability of people and businesses to transact have been identified as some of the problems that would get some solutions with the Dangote fertiliser plant.
The plant, which was inaugurated by Buhari, has a capacity to produce three million metric tonnes of urea per annum, and was established at a cost of $2.5 billion in the Lekki Free Trade Zone area of Lagos State.
The fertiliser plant, the largest in Africa and second largest in the world, is part of the multi-billion dollar petrochemical complex established by Africa’s richest man. It is expected to contribute towards Nigeria’s food security and self-sufficiency projections.
In 2019, Nigeria’s fertiliser consumption of 861,609 metric tonnes (MT) was the lowest in three years. However, urea remains the most utilised fertiliser in the country, with 730,151 MT used in 2019, according to a 2020 report by Africa Fertiliser and IFDC. For Nigeria, low fertiliser usage has been prominent among factors for low productivity in agriculture, and invariably, food security.
“The new plant will make Nigeria self-sufficient in fertiliser production, with excess capacity to export to other African markets and the rest of the world,” said Aliko Dangote, president/chief executive, Dangote Industries Ltd at the inauguration. “Our products have already reached the African market and some in the United States, Brazil, India and Mexico.”
Brazil was identified as a major export destination for Nigerian urea as 84 percent of the urea exports went there in 2018. With the fertiliser already being exported, at a conservative estimate of $500 per ton, if the plant operates at full capacity, Nigeria could see over $1 billion in foreign exchange gains from the facility alone, from exporting only two-thirds of its output.
For local consumption, in 2019, Nigeria produced 1.47 million metric tonnes of urea fertiliser, out of which 743,707 MT, representing 50.5 percent, was exported and the remaining 49.5 percent was consumed locally.
“One of the Federal Government’s key ambitions is for Nigeria to become self-sufficient with food production and also to be a likely exporter of food and value-added products,” said Niyi Adebayo, minister of industry, trade and investment. “The Dangote fertiliser plant goes a long way in realising this vision, not just for Nigeria but for the entire continent.”
According to him, the facility has the potential to meet not just Nigeria’s need, but at its current capacity, it will earn the country millions of dollars from its exports. “It will also help with the unemployment problems our country is currently faced with,” he said.
According to Dangote, himself, the company will partner with the key stakeholders in the industry including Farmers Association, MPK blenders, NGO development partners and set governments across Nigeria who are committed to a sustainable approach to improving soil quality and farm increase
Urea fertiliser production was 281,750 in 2015, then 695,000 in 2016, moving to 1.4 million metric tonnes in 2017, then 1.59 million in 2018 and 1.47 million in 2019 according to a 2020 report by Africa Fertiliser and IFDC.
Read also: Food security, foreign exchange gains seen for Nigeria in Dangote fertiliser
On the other hand, consumption of Urea fertiliser has more than doubled from 319,656 metric tonnes in 2015 to 730,151 metric tonnes in 2019. While Urea consumption has remained high, accounting for more than 50 percent from 2015 to 2018, by 2019 it was 84.7 percent of total fertiliser usage as usage dropped drastically across other types of fertilisers.
“Today, Nigeria is self-sufficient in the production of urea, and we are also the leading producer of urea in the African continent,” said Godwin Emefiele, governor of Central Bank of Nigeria. “There is no doubt that improving access to fertiliser will contribute to significant improvements in the productivity of our local farmers. But probably more importantly, it will enhance our nation’s drive to improve food security and ensure we consume what we produce in Nigeria.”
Farm output in Nigeria ranks poorly for most crops, and while output is not entirely due to fertiliser, its usage or non-usage contributes significantly to farm productivity. Generally, fertiliser usage in Nigeria is low, attributed to many factors but prominently, cost of acquisition.
In June 2006, part of the resolutions adopted by the African Union Special Summit of the Heads of State and Government in the famed ‘Abuja Declaration on Fertilizer for the African Green Revolution,’ sought to increase fertiliser usage across the continent from 8 kilograms to 50 kilograms of nutrients per hectare by 2015. It has been estimated that Nigeria only uses about 23kg (less than 50 percent of this target).
According to Dangote, the fertilizer project is an ambitious one that would drastically reduce the level of unemployment in the country through generation of direct and indirect employment. “Agriculture accounts for about 20 percent of Nigeria’s GDP and the country is a living producer of various agricultural commodities,” he said.
“The sector has the potential of becoming the biggest source of income for our nation, providing employment and raw materials for Industries. However, low fertilizer usage has been a major reason for low productivity in this sector,” he said. For him, however, non-availability of the products in quantity and quality, rather than affordability, is the primary constraint to the use of fertiliser in Nigeria.
