FIELD OF DREAMS

Nigeria 2016 | AGRICULTURE | INTERVIEW

TBY talks to Onajite Okoloko, Managing Director & CEO of Notore Chemical Industries, on the challenges facing the fertilizing industry and how the government and private sector can work together to resolve them.

Onajite Okoloko
BIOGRAPHY
Onajite Okoloko is the Group Managing Director and Group Chief Executive Officer of Notore Chemical Industries Plc, the only producer of Urea Fertiliser in Sub-Saharan Africa. Prior to his return to Nigeria in 1994, he worked in corporate America and has over 20 years of experience in sales, marketing, and business development. He is a member of the National Technical Working Group of the Nigeria Vision 2020 and the President’s Agricultural Transformation Implementation Council, which was inaugurated in May 2012. He was appointed as an inaugural member of the Human Capital and Innovation Capacity Building Working Group of the National Competitiveness Council of Nigeria in 2014. He graduated from University of Benin, Nigeria and is also an alumnus of the Harvard Business School. In 2011, he was named the inaugural winner of the Ernst & Young Entrepreneur of the Year Award in the Emerging Entrepreneur category for the West Africa region.

What are the main challenges Nigeria faces to increase the input of fertilizer?

Many farmers lack awareness and the commercial mindset to be able to connect the use of fertilizers and improved seed to the output and productivity increases. That is the big challenge that Nigeria and the bulk of sub-Saharan Africa have been facing. Best practice should be set at about 200kg per ha. Global use is somewhere between 90 and 100kg per ha. In sub-Saharan Africa we are using less than 100kg per ha, so it is incredibly small.

What policy approaches would help the government deliver more fertilizer to farmers in larger quantities?

We have used our own private sector approach to get fertilizers to the farmers. The government has tried to introduce a subsidy program. In some cases this has worked, and in some cases it has been undercut by middlemen, so the real benefits never get to the farmers. The government should create an enabling environment to allow the private sector to manage the entire distribution and sales process, develop the channels into the market, and train farmers. The biggest challenge we have in Nigeria today is broken value chains. We have the input supply system, the production, the processing, and then we have the market. The farmer today is everything. Their yields are low, but they have to figure out how to get their product to market. We are experiencing about 50% post-harvest losses in Nigeria today, even with minimal yields. The most important thing is creating an outlet for farmers when explosive yields occur, and educating about the impact of good quality input and improving yields. When this is achieved, the focus is channeling yields into the market and processing through the value chains. We see the government helping to develop some of that by giving low interest loans to attract people not just to farming itself, but also processing, and being able to divert the subsidy to the output so that when farmers have huge yields and cannot get to market, the government can guarantee the off-take of those yields and stabilize prices for the farmers. Another important factor is infrastructure. Infrastructure is key for the movement of products and fertilizers into farming areas and delivering the output back to the marketplace. For us today, it is cheaper to deliver fertilizer to Germany than to Kano in Nigeria. We really need to focus on having good roads, rail, and ports to move these products across the country. We have ports, but adequate rail and roads infrastructure is lacking.

Does your current production meet the local demands for fertilizer?

Nigeria's total fertilizer consumption today is about 1 million tons, which may require an additional 300,000 tons of phosphate and potash to be able to supply the entire 1 million tons. Having said that, the latent demand is far higher than that because if we compare Nigeria to Pakistan, for example, both countries have about the same area and population. Nigeria has about three times more arable land than Pakistan, though, so there are many more farming opportunities in Nigeria. Nigeria and Pakistan have the same kind of smallholder farming structures—farmers farming on one or two ha of land. However, Pakistan uses 10 million tons of fertilizers. This is because its average fertilizer utilization is about 100kg per ha. Nigeria is the largest importer of rice today, even though we could grow all the rice we need here.