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Business News of Thursday, 13 October 2016


Dangote fertilizer to push crop production up

The project site

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Ghanaian farmers will soon benefit from the import of cheap fertilizer from the Dangote Group of companies in Nigeria, as the firm constructs the biggest fertilizer plant in the world located in Lagos State.

The two-line Dangote Fertilizer Complex, consisting of Amonia and Urea plants, will have a total production capacity of three million tons per annum to feed countries in the West African sub-region.

By this, the reduction in prices is expected to positively impact on crop production of cash crop and subsistence farmers.

Speaking to Citi Business News after a tour of the project site in Lekki, Lagos State, the General Manager of Dangote Fertilizer, Anurag Jaiswal stated that the $2 billion project when completed in December 2017, will have a substantial impact on crop output in West Africa.

“This project will change the level of production of food in West Africa and that includes Ghana. Currently most West African countries import fertilizer from the gulf at a high cost. This plant will produce the fertilizer at cheaper price for our farmers,” he explained.

He pointed out that most African countries are unable to meet expected crop production due to lack of fertilizer inputs on farms.

Ghana’s fertilizer subsidy programme

In 2015 for example the government of Ghana failed to meet its fertilizer subsidy targets by 50 percent, according to a SEND Ghana report.

The report, which was presented by John Nkaw, Programme Officer of SEND Ghana, disclosed that the government of Ghana projected to import 180,000mt of subsidized fertilizer; but as at December that year, the government was able to import only 90,000mt of fertilizer, representing half the target.

Ghana established the fertilizer subsidy programme in 2008, to help farmers increase their rate of fertilizer application as a means of increasing crop productivity as well as increasing the country’s fertilizer application.

Currently, cocoa farmers are supplied with highly subsidized fertilizer as a means to increase output to enhance foreign earnings from the main cash crop of the country.

Some agriculturalists, have proposed that there is the need to increase fertilizer supply to cocoa farmers, particularly as the COCOBOD missed its target of cocoa production for the 2014/15 season.

Quality fertilizer for good output

According to Mr. Jaiswal, the General Manager of Dangote Fertilizer, the plant will produce high quality urea fertilizer that will meet all the specifications of the sub-region.

Outlining some major benefits of the plants, he maintained that the fertilizer will also enhance food security in ECOWAS as countries in the bloc trade amongst one another.

“Apart from this project bringing enhanced food production of grains and vegetables, it will also improve food security. African countries will not have to spend all that money outside the continent and it will also enhance inter trade in Africa,” he said.

Fertilizer imports below target

With the exception of 2014, government since beginning of the fertilizer programme has exclusively provided funding for implementation of the subsidy programme.

According to the SEND Ghana report, from 2008 to 2013 government subsidized 724,055mt of fertilizer at a cost of GH¢345,244,000. The biggest allocation subsidy of GH¢176,746,000 was provided in 2013.

The report further revealed that the quantity of subsidized fertilizer (except for 2012) rose steadily by 317 percent from 43,176mt in 2008 to 180,000mt in 2013.

While the quantity increased, the northern Ghana percentage of price subsidy reduced from 50 percent in 2008 to 21 percent in 2013 and 2015.

It also showed that the reduction of the subsidy resulted in increases of the subsidized fertilizer’s price.

For instance, the price of Compound fertilizer was GH¢22 per 50kg bag in 2008, but increased to GH¢89 per 50kg bag by 2015, representing a 295 percent rise.

The report stated that government’s inability to fully finance the fertilizer subsidy programme in 2014 contributed to the failure in meeting yield targets for maize and rice in nearly all the six districts covered in the three regions of the northern part of Ghana during the study.

As a result, many farmers were left to buy fertilizer at commercial rates in the market place.

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