Government Plans to Remove Fertilizer Subsidy
Max Gbanite
Sunday, September 14, 2008
When
His Excellency, Alhaji Umaru Yar’Adua became the President of Nigeria in 2007,
he announced to the world his seven (7) point agenda which Nigerians are yet to
understand due to lack of will to communicate it properly to the people; hence,
making it a secret agenda. Moreover, Agriculture, we are told, remains one of
the main points in that un-articulated seven (7) point agenda.
If that is true, then Nigerian farmers were shocked beyond their imagination when they read in the Newspapers, that the Minister of Agriculture, Dr. Abba Ruma, while attending the Northern Nigeria Agriculture summit, held in Kaduna sometime last month, announced that the government he represents plans to remove fertilizer subsidy. If this statement is correct, then the Minister and his government need a rethink especially if they intend leading the country to the much touted – vision 2020 of theirs.
While testifying at the Senate Public hearing on food security, the former Minister of Agriculture, Adamu Bello debunked allegation that during his tenure of almost Six years, that the supplies of fertilizer to the Ministry were hijacked by a cartel. The point here is that whilst Adamu Bello allowed corruption to trickle down to Sixty-Five (65) supplier-cartels to cover his tracks of being labeled corrupt, and make it difficult for EFCC to nail him, the current Minister Abba Ruma constricted the supplier-cartels to three (3), while taking away corruption subsidies from sixty-two (62); an early practice of subsidy removal. One wonders if both ministers can indeed subject themselves to swear by the Holy Koran that their bank accounts (hidden) of course, have not increased with naira/dollar subsidies since becoming ministers.
Why I find the statement of Dr. Abba Ruma very troubling is that just recently, while speaking at the First Bank of Nigeria sponsored, International Conference on food sustainability, organized by the Nigeria Economic Summit Group (NESG) and Agro-Nigeria on July 23rd – 24th, held at Sheraton Hotel & Towers, Abuja; the minister posited that, “the continued food crisis is an economic opportunity for developing countries especially Nigeria.” He continued, “That the opportunity is due to Nigeria’s highly diversified agro ecological condition which makes it possible for a wide range of agricultural products.”
Additionally continues the Minister, “the sector generates employment and contributes to the Gross Domestic Product (GDP) while expanding the revenue base of the country, and that Agriculture remains a key component of the economy currently contributing 41% of GDP and employing almost 70% or more of the active (rural) population; the sector has however underperformed its potentials.”
Why would a government whose representative recognizes the potentials of a sector that is so tangent to its 7-point agenda at the same time articulate a fertilizer-subsidy-removal-policy to kill the same sector, instead of excogitating an urgent ‘Marshall-Plan’ to increase its potentials?
Recently, experts from around the world met in Nairobi Kenya to attend African Green Revolution (AGRA) summit, to address measures to achieve food security. At the summit, Kenya’s Minister of Agriculture and chairman of the African Council of Ministers of Agriculture, Hon. William Rutio, stated that, “the current world-wide food crisis has provided a wake-up call for the policy makers to reorient their planning process to provide viable and sustainable solution… for a green revolution which will dramatically increase agricultural productivity and lift the bulk of our population out of poverty.”
Furthermore, at the same conference in Nairobi, Dr. Akinwumi Adesina (a Nigerian), while challenging African leaders and policy makers to lead the way in building African Policy Partnership for Africa’s development said, “we are laying the basis for sound evidence-based policies that will rapidly transform incentives for small holder farmers, the great majority of whom are women working less than a hectare of land.” He continued “… the prize of fertilizer continues to rise as of now the prize of BAT has moved from USD$240. a tonne in January of last year to USD$ 1, 600 a tonne… the scarcity of fertilizer in African markets is a terrible paradox in the continents market development.”
These chronicled speeches should be a pointer for an administration whose agenda is to uplift the downtrodden, except if such agenda is simply a political deception-constipated of truth. President Umaru Yar’Adua should quickly dissociate himself from the statement of his Agric Minister, linking him to the removal of fertilizer subsidy immediately.
To solve this perennial problem once and for all, the Administration should immediately set up fertilizer plants all over the country and utilize the over 185trillion cubic feat of Gas available in the country; the GAS serves as a source for both power and partly raw materials for fertilizer production plant. The production and revitalization of NAFCON, and others under the Private-Public-Partnership and funded by Nigerian banks, will surely open a floodgate of Foreign Direct Investment (FDI) in the sector.
That Yar’Adua’s government intends to leave the entire fertilizer business to the private sector, as posited by his minister Dr. Abba Ruma, is an indication of political deception and structural impurity on the part of the Administrations subtle articulation of the 7-point agenda. If indeed the Administration is serious about tackling the challenges of food crisis in Nigeria and the world at large, this then becomes a better time to use part of the excess crude funds in partnership with the private sector and build at least 12 fertilizer plants in the country. The same plants will meet their local needs, drop the price for the farmers, save the country foreign exchange in the long-run, and recoup its investment through exports of same; while at the same time create more employment opportunities.
The government knows that the current illegal diversion of fertilizer by the so-called cartels and merchants of doom denies ready and willing farmers the benefit of much needed subsidies. Most often the imported fertilizers are sold to farmers at exorbitant prices; it merely creates business opportunities for the middlemen, mostly expatriates Indians, Lebanese, and their East European rogues who partner with Nigerians (Government Official) to create this illegal price structure, and at the same time stunt development in the sector. Therefore, all the security agencies must be put on alert to stop this economic sabotage of the nation; it can be achieved.
A government that loves her citizens has subsidies. For instance, the United States, European Union, China, even Russia, all have subsidies to assist her citizens. Nigerian opposition leaders and the labor union must rise up to the challenges and insist that agricultural subsidy must not be tampered with. It is equally unfortunate that the so-called opposition leaders and labor unions have all been compromised thru-naira-subsidy; the poor farmer is left to suffer; imagine what will happen to Nigeria should the farmer’s union go on strike for one farming season.
This is the time for those who have the ears of the President to appeal to him to soft pedal on this matter, otherwise they remain chronicled in history as described by the late Dr. Martin Luther King, who said that, “History will have to record that the greatest tragedy of this period of social transition was not the strident clamor of the bad people, but the appalling silence of the good people.”
Therefore, the good people of Nigeria brace up for the challenges ahead and tackle this crisis with resolve and a focused approach.
Long live the Federal Republic of Nigeria.