Dangote: Fertilising Nigeria’s economy with investments
Nigeria’s stake in the global trade supply has just been increased with the launch of the 3 million metric tones per annum capacity Dangote Fertiliser in Lagos by President Muhammadu Buhari.
The Urea Plant, located at Ibeju Lekki Free Trade Zone, within the periphery of the Dangote Refinery currently under construction, is promoted by the Africa’s global enterprise, Dangote Industries Limited. Of significant importance is the timing of the inauguration. The plant would be pumping a fresh 3 million tonnes of granulated Urea into the country and the world supply amid the impact of increasing prices in the aftermath of the Russia-Ukraine war.
With the current economic malaise facing Nigeria and which has decimated foreign exchange intake, the Dangote Fertiliser would be reversing an unsavoury trend in Nigeria’s balance of trade in which hundreds of millions of dollars is expatriated on fertilizer import annually. According to the United Nations Commodity Trade Statistics Database (COMTRADE) on international trade, as at 2020, Nigeria imports of Fertilizers was US$261.69m
Since agriculture contributes the highest to Nigeria’s GDP at 27 per ecnt, successive government has made efforts to promote agriculture through various incentives to empower the stakeholders so that the nation can reduce reliance on imported foods by growing what it eats and eats what it grows. This, the governor of Central Bank, Godwin Emefiele said is exactly the economic policy trust of the present administration. And this it has been executing through deliberate growing of her fertilizer industry.
A major factor in the low food production in Nigeria is the nutrient-deficient nature of Nigerian land. Despite government’s efforts, the fertilizer consumption rate in Nigeria remains below its peers in Africa and below the world average, albeit recording growth over the recent years. The World Bank, rates Nigeria’s fertilizer consumption in kilograms per hectare of arable land at 19.7 in 2018, below Ghana’s 29.4kg/ hectare of arable land and the average consumption rate in sub-Saharan Africa of about 33kg/ hectare of arable land.
Emefiele reported on the occasion that Private sector participation has increased especially since 2015 as government continues to drive fertilizer consumption through its Presidential Fertilizer Initiative (PFI), with the ultimate aim of achieving food self-sufficiency.
It was against this background that President Buhari was excited when he saw the $2.5b humongous state of the art Urea plant. He said “This Fertiliser plant will further advance this administration’s drive towards achieving self-sufficiency in food production in our beloved country, Nigeria.
While lauding the Chairman of Dangote Fertiliser Limited, Aliko Dangote for his economic patriotism and commitment to the socio-economic development of our country as well as the well-being of the people, he assured that the new plant will help his government to reduce poverty, increase the inflow of foreign exchange and reduce dependence on importation of fertilizer. “The nation also stands to gain extensively in earnings of foreign exchange from the excess production of the plant. I am informed that we have already started exporting to USA, Brazil and India.
According to him, in the agricultural sector, his government expects a boom as fertiliser would now be readily available. Many Nigerians who hitherto practiced subsistence farming because of non-availability of necessary inputs can now take up agriculture as a business. We expect a rise of new breed of agropreneurs who will add value to farming and make the nation self-sufficient in food production.”
With the feat attained in local cement production and now fertiliser, the President reassured all Nigerians that the government is focused on providing an enabling environment for private sector investors to thrive. We will continue to improve on infrastructure, power, security and enact relevant laws and regulations that will drive investments in the economy. “We are partnering with the private sector, via a tax credit scheme, in the rehabilitation of roads across Nigeria under the Presidential Order No. 7. As we all know, good roads contribute to easy movement of goods and services across the nation, thus reducing cost of doing business and improving productivity. We are also rehabilitating our railway lines and building new ones to lessen the burden on our roads and create more effective multi-model transportation networks.”
The CBN governor recalled President Buhari’s charge to his economic managers especially the CBN team that efforts must not be spared to put in place measures that will assist farmers, small businesses, and large manufacturers so that Nigeria can produced what it consumed and reduced FX expenditure on agricultural imports. He alluded to the timing of the coming on stream of the Dangote Fertiliser “when one considers recent developments in the global market, where prices of wheat, fertilizer and crude oil spiked by over 20 percent, following the Russia – Ukraine war. This would not only help to enable greater productivity of our agricultural sector but would also help in insulating Nigeria farmers from depending on imported fertilizer.”
Crediting the Buhari’s administration for the successes being recorded in the bid to increase local productions, the CBN governor said as at 2015, Nigeria had a shortfall of about 3.5 million tons per annum compared to the over 6 million tons per annum required in the country. However, with sustained efforts, other indigenous companies like Indorama and Notore with a combined capacity of over 2.5 million tons per annum have tried to match the market demand, yet the country still faced a huge shortfall of fertilizer supply.
With the CBN interventions, the CBN boss noted that there had been a significant increase in the country’s blending capacity from 7 plants in 2015 to over 48 active fertilizer blending plants today. Indeed, during the past 5 years, over 35 million bags of blended fertilizer has been produced in Nigeria. Consequently, the import bill on fertilizer has not only declined significantly but also witnessing rising investment in the fertilizer industry, such as the one being commissioned today by the Dangote Group.
While expressing satisfaction, that the interventions are paying off, Emefiele disclosed that Nigeria is now self-sufficient in the production of urea, and is also the leading producer of urea in the African continent. There is no doubt that improving access to fertilizer 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, thereby fulfilling another key promise and vision of this Administration.
Africa’s richest man and promoter of the project described the new plant as a game changer, as it has the capacity to make Nigeria become self-sufficient in fertiliser production, with spare capacity to export to other markets in Africa and the rest of the world. He added that already, Dangote fertiliser has reached the markets in the USA, Brazil and Mexico.
According to him, the Fertiliser plant, which is the largest granulated Urea fertiliser complex in Africa, occupies 500 hectares of land, was built at a cost of $2.5 Billion, and is expected to reduce drastically level of unemployment and youth restiveness in the country through employment opportunities. To him, the plant is expected to generate new jobs with top quality fertiliser being available and in sufficient quantities for the farmers.
Dangote Fertiliser, according to him, would ensure emergence of farmers in the country, providing hundreds of jobs and ushering in a new era of agricultural agriculture entrepreneurs. “This breed of agroprenuers will take to farming on large scales, providing food and raw materials for our industries,” he added.
An innovation that the company is bringing on biard in the fertilizer industry, Dangote explained is the rolling out of soil laboratory, which would transform the agricultural sector in the form of extension services for small and medium scale farmers. Dangote fertilizer, he added has set up a well-equipped fertiliser soil testing laboratory to enable it analyse and identify soil deficiency and the appropriate fertiliser blend. This became necessary because according to him, “studies have shown that applying the right fertiliser to the soil will boost productivity. This service is to cover all the geopolitical zones, and will surely change agricultural landscape in the country by transforming farming into a lucrative profession.
“Dangote Fertiliser is working with Farmer Associations, Corporate Farmers, NPK Blenders, NGO/development partners and State Governments all over Nigeria, and governments across Africa and beyond who are looking for sustainable approach to improving soil quality and farm yields,” he explained.”
Lagos state governor, Mr. Babajide Sanwo-Olu boasting of the environmental friendliness of the state, a situation that has encouraged investments in the state, commended Aliko Dangote for always blazing the trail, noting that Lagos state government was happy to be hosting many of his businesses. He added that, “with the largest fertiliser plant in Africa in Lagos and the largest refinery in the world coming soon, there is nobody that would not be proud of Alhaji Dangote.”
The governor stated that Nigeria would quickly forget its many economic problems if another entrepreneur like Dangote could be replicated in other regions of Nigeria while assuring that private investors could always count on Lagos State government when it comes to provision of an enabling environment to make businesses thrive.
Group Executive Director in charge of Capital Projects and portfolio development, Dangote Industries Limited, Mr. Devakumar Edwin, whose team oversaw the construction of the plant explained that the new plant was purpose built with the vision and mission of the company in mind saying the new urea plant is to make Nigeria self-reliant in food production by improving crop productivity for the farmers and to provide distinctive, high quality fertiliser products and services with sustained commitment to customer satisfaction, whilst delivering superior returns to our stakeholders.
Edwin pointed out that the part of the strategy of the company is to make fertiliser affordable and available to farmers, eradicate influence of middlemen, and improve product efficiency through research, innovation and the latest technology. “We will ensure customer satisfaction and protect stakeholders interest. We will be the leading manufacturer of quality and affordable fertiliser products all over the world and will become the most preferred manufacturer and supplier of fertilisers and other Ammonia products in Africa.”
Giving the salient features that stands out the new Urea plant, the Director said “Dangote Fertiliser complex consists of Ammonia and Urea plants with associated facilities and infrastructure to produce 3 MMTPA Urea. The complex consists of 2 x 2,200 MTPD Ammonia Plants based on Halder Topsoe technology; 2 x 4,000 MTPD Melt Urea Plants based on Snamprogetti technology; 2 x 4,000 MTPD Urea Granulation Plants based on Uhde technology; a Captive Power plant comprising of 3 Steam turbine Generators of 40 MW capacity each totaling 120 MW and 3 Auxiliary boilers for 40 ATA steam generation of 200 TE capacity each.
On the free soil testing service, Edwin explained it would help to know nutrient deficiency in order to recommend the right fertiliser dosage. Nutrient deficient soil cannot give potential yield, hence low returns on the invested agro inputs and poor farm income. Balance in fertiliser use will not only reduce the cost of fertiliser but also improve the yield and maximise the profit. Applying the right fertiliser to the soil will enable it yield maximum results.
“Overall, the goal of our soil testing is to provide an accurate assessment of the soil’s fertility in order to recommend the right dose of fertiliser.
Our efforts are to train farmers on good agronomic practices and provide them with soil testing services. We have established Mobile Soil Testing Lab (MSTL) and Soil Testing Labs to provide soil testing facility to farmers in remote villages also. Mobile Soil Testing Laboratory will collect the soil samples from the doorsteps of farmers and soil test results will be provided to farmers at no cost”, he stated.
With the Nigerian population projected to rise to 262 million by 2030 and 398 million by 2050, the Dangote Industries Limited, as a true leader in the Nigerian business space, may have seized the initiative to actualize a vision where Nigeria will be self-sufficient in catering for its own food consumption.