Whither the e-wallet scheme?
As fertilizer scarcity lingers across Nigeria, the country seems to be returning gradually to the old fertiliser distribution regime, a development posing serious threats to farmers’ productivity.
Before the Goodluck Jonathan regime, the old system of fertiliser supply was weak, inefficient and allegedly fraudulent. A large proportion of intending beneficiaries could not get access to the product. Investigations showed that bags of fertiliser were diverted for personal gains and when supplied, they were either adulterated or underweight.
Between 1980 and 2010, the country lost about N776 billion, an average of N26.3 billion yearly, to corruption under the old fertiliser distribution regime. Under the system, the Federal Ministry of Agriculture and Rural Development (FMARD), based on reports, procured and distributed fertiliser to farmers with a small fraction of about 11 per cent of the product distributed ever got to farmers.
As of that period, the usage of fertiliser was very low among the rural farmers as a result of corruption, as favouritism, inducement, hoarding, nepotism and bribery, which were the order of the day.
On assumption of office, ex-Minister of Agriculture, Dr Akinwumi Adesina, made drastic efforts to address corruption associated with the old system. The move eventually led to the introduction of the Growth Enhancement Scheme (GES), where farmers used cell phones to access fertiliser via the electronic wallet (E-wallet).
The e-wallet is an electronic system that uses vouchers for the purchase and distribution of agricultural inputs. Farmers who were eligible for these vouchers must be 18 years of age and above, his/her bio-data must have been captured by the government, own a cell phone with a registered line and have a minimum of N50 credit on it. Hence, the government can track who got fertiliser, when they got it, and how much was paid.
Under the GES programme, the Federal Government was expected to provide 25 per cent, the state also provided 25 per cent, while the farmer paid 50 per cent for each bag of the product supplied to them.
According to the National Association of Nigerian Traders (NANTS) in 2015, with the GES, via the e-wallet at 50 per cent subsidy, 1.2 million farmers reportedly bought a maximum of two bags of fertiliser in 120 days.
HOWEVER, despite the loud applause that complimented the GES programme, wherein with just an SMS via their phones, farmers could access their subsidised farm inputs, since 2015 when this administration assumed office, the reverse has been the case, as the initiative was stopped abruptly.
While some analysts attribute this to a policy summersault, others link the failure to change of power, as the ruling Peoples Democratic Party (PDP) that initiated the initiative was ousted by the All Progressives Congress (APC).
The challenge started when Chief Audu Ogbeh assumed office as the minister during the first term of President Muhammadu Buhari. Ogbeh claimed the GES programme was fraught with corruption allegations, and had hinged the allegations on the N76 billion owed the agro-input dealers by the Jonathan administration.
He insisted on working out a new modality for the implementation of the GES scheme, and this gave birth to Presidential Fertiliser Initiative (PFI). Instead of addressing the alleged problems he inherited through the PFI, the initiative reportedly added to the challenges of farmers, which unavoidably negatively impacted on farmers’ productivity.
The farmers had lamented that the PFI, meant to facilitate access to fertiliser at the rate of N5,500 instead of the market price of N8,500 to N10,000, is a far cry from their expectation, insisting that the inputs lack the necessary nutrients to increase their yields as claimed by the government.
A top agro-input supplier, who spoke with The Guardian on phone, said though the government had been providing farm inputs, the inputs have failed to reach the real farmers, but the ‘portfolio farmers’ are getting it.
“The portfolio farmers go to the ministry of agriculture, speak to their cronies, who sell to them, but they don’t distribute it to the farmers. Even when it gets to the farmers, it takes a long period of time, unlike the previous administration wherein with just a phone call or text message, a farmer gets information to go to a particular centre to get seeds and fertiliser and then pay a token.”
One of the reasons adduced for the inability of the ministry to facilitate the distribution of seeds and fertiliser to farmers at the period was the debt owed agro-dealers that participated in the 2014 farm input support to farmers.
The government made several commitments to offset the N67 billion owed the farm input suppliers, but unfortunately, only N20 billion was paid. The situation was compounded when Ogbeh announced that he distanced himself from the payment of agro-dealers, he blatantly told them to go to the presidency to pursue the payment.
The development came on the heels of an allegation that the then Minister of State and the Permanent Secretary connived to remove N2 billion from the N20 billion paid the agro-dealers. The minister, who allegedly felt the mischief was the handiwork of some of the agro-dealers, maintained that he would no longer pursue the payment. The allegation was denied by the Agro Dealers Association of Nigeria.
Since then, the price of fertiliser has been fluctuating, selling for as high as N10,000. At a time, it was alleged that the produce was being diverted to other countries by fertiliser companies, while the little available were sold at exorbitant rates to farmers.
What came as a serious concern to the farmers was the unprecedented price increase of the commodity from N5,000 in 2014 to 10,000-15,000 in 2016. The ministry had laid claims to hijack of fertiliser by the Boko Haram insurgents, as it is considered as part of raw materials for production of explosives.
A source said then: “Because of the security threat fertiliser poses to the national security, the office of the National Security Adviser now handles the movement of fertiliser in the country and given the antecedents of the Minister of Agriculture, he would not want get involved in whatsoever that would threaten the nation’s security.”
The source further attributed the delay in the fertiliser distribution to the inability of the state government to provide finance for the programme, adding that from the outset, some state governments had insisted that they were financially incapacitated to support the distribution of subsidised fertiliser to their farmers.
It is sad to note, based on investigations that farmers have not been able to access about N15.68 billion budgetary allocations for farm input support services from 2017 till date.
Reports have it that yearly budgetary allocations are provided for GES Scheme, but farmers have not benefited in any way from the support services. They have independently sourced for the input from the open market.
For instance, in the 2019 budget N1.69 billion was budgeted for GES, while another N999 million was provided for agricultural input. In 2018, N3.2 billion was provided for the farm support services and a whooping N9.79 billion was provided for the intervention programme, same year, which never get to the real farmers.
Though The Guardian made several efforts to hear from the ministry on what actually led to the premature death of the e-wallet scheme, no information was received as of the period of filing this report.
But the Minister of Agriculture, Sabo Nanono, who assures of availability of the product, promised the National Fertiliser Quality Control Act 2019 would eliminate sharp practices around fertiliser distribution across the country in the areas of nutrient deficiencies, adulteration, misleading claims, and short weight, among others.
He said the Act would also protect private investments like the manufacturers, blenders or distributors, as well as other service providers.
He revealed that over 33 fertiliser blending plants are currently producing about five million metric tonnes of fertilizer yearly and many more would still come on board, expressing optimism that Nigeria would have no business importing fertiliser by 2023.
Nanono said: “In the next two to three years, we may not need to be importing any fertilizer again into the country, more importantly I want the blending plant to know that we can produce up to the capacity that we need, what we need to do is to fill in the gap and take the product to the farmers.”
He said with the Fertiliser Quality Control Act fully in force, private sector players would obtain certificates of registration or sales permits after payment of some prescribed fees/charges before being allowed to operate any fertiliser business in the country, saying the fees are the least when compared to what is obtainable in other related sub-sectors agencies within the country and the ECOWAS sub-region.
The minister stated that the primary goal of the fertilizer regulatory system is to increase agricultural productivity for national food security, which could only be achieved through the provision of quality fertiliser and other key farm inputs.
Nanono said under the new regime, fertilizer adulterators are liable to five-year imprisonment without an option of fine, adding that magistrates’ courts have now been given the jurisdiction to try cases of fertiliser adulteration, unlike before where only the high court was allowed to try such cases.
He said the Farm Input Support Department of the Federal Ministry of Agriculture and Rural Development has become the implementation agency for the Act, and the National Agency for Food and Drug Administration and Control (NAFDAC) no longer has the power to regulate the subsector.