FG saves over N60bn through fertiliser subsidy removal – NSIA

The Nigeria Sovereign Investment Authority (NSIA) said on Monday that the government had been able to save over N60 billion by eliminating fertiliser subsidy through the implementation of the Presidential Fertiliser Initiative (PFI) within eight years.

The Authority revealed that through its strategic leadership, the PFI, has resuscitated and established 84 blending plants across the six geo-political zones in Nigeria, accrued over $200 million in foreign exchange savings and created more than 100,000 direct and indirect jobs.

To date, the initiative has delivered 90 million bags of locally blended high-quality fertilisers to farmers.

Launched in 2016, the PFI, implemented by the NSIA, has set out to address challenges in Nigeria’s fertiliser sector, which has long been hampered by inefficiencies and an over-reliance on imports.

At the PFI Stakeholders’ Roundtable in Abuja, Aminu Umar Sadiq, managing director of NSIA, noted that the initiative has successfully met its objectives, including the revival of Nigeria’s fertiliser industry and the reduction of the Federal Government’s subsidy burden.

“Today, we can proudly say that our objectives have not only been met but surpassed in ways that exceeded our expectations.

“The PFI has facilitated the production of 90 million bags of NPK fertiliser, revived domestic blending plants, diversified products available to farmers, and significantly reduced logistics costs.

“These developments have created a more stable and competitive market, ensuring our farmers have access to essential inputs at fair prices,” Umar Sadiq, who was represented by Sybil Etuk, NSIA head of corporate planning and strategy, stated.

He said despite the disruption of supply chains during global events such as the COVID-19 pandemic and the Russia-Ukraine war, the initiative has ensured a steady supply of fertilizers across the country.

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“The impact of foreign exchange fluctuations on key imported raw materials has persisted in exacerbating cost pressures, adding another layer of complexity to the value chain.

“Recognizing these challenges, the NSIA is actively working with its partners to ensure that the PFI continues to deliver on its mission to support Nigeria’s agricultural sector,” he stressed.

The Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN) has attributed the high cost of fertiliser and sectoral leakages in Nigeria to weak regulatory frameworks and escalating cost of logistics despite government’s intervention.

Abubakar Sadiq Kassim, president of FEPSAN, highlighted weak regulation and hidden costs, such as transportation, interest rates, and the timing of raw material purchases, as key factors contributing to the high costs and unavailability of fertilisers to farmers.

He emphasised the need for greater efficiency in managing these costs.

“One hidden cost, for instance, could be the timing of our raw material purchases. If we can buy raw materials at their lowest prices and address issues like port storage, we could significantly reduce costs.

“Additionally, instead of using 50 kg bags, why not consider one-ton bags since it’s an industrial material?” Kassim asked.

Kassim revealed that through discussions with the NSIA, FEPSAN has identified and addressed several cost-saving opportunities. “For instance, since we began this discussion in February, we’ve saved about $100 million by identifying inefficiencies and making necessary adjustments.

“However, issues like foreign exchange volatility remain a challenge. Sometimes, NSIA takes a forward position on purchases, but by the time payment is due, the dollar has appreciated.”

He further urged regulators to step up their responsibilities in monitoring and controlling fertiliser prices.

“As competitors, each blender has a unique market strategy. Healthy competition will drive down prices, benefiting farmers.

“However, the role of middlemen and the potential for adulteration need strict oversight. Regulators must be vigilant in ensuring that the end users, the farmers, are not exploited.”

Speaking at the event, Iruansi Itoandon, project lead, PFI, described the programme as an example of gains of partnerships driven with a shared vision.

Itoando also pointed to Nigeria’s exchange rate as a major factor in the continued rise of fertiliser prices, emphasising that currency fluctuations are beyond the control of fertiliser blenders.

“We need to focus on value and efficiency to improve pricing. Whatever farmers pay for, should reflect true value. A concerted effort is required to ensure pricing is fair and beneficial,” Itoando stated.