By Chinedum Emeana
the tumbling price of crude oil, which is Nigeria’s main source of foreign exchange and the country’s long-acquired taste for foreign goods and services, have resulted in a massive hit on the Naira exchange rate compared to other convertible currencies. Since the New Year, the media seem to report a new low every day for the Naira against the dollar, for instance.
This unsavoury situation has made many concerned Nigerians to advocate a shift in focus to agriculture, raw materials processing, local manufacturing and most importantly promoting consumption of locally produced goods and services as a way of improving the strength of the Naira vis-a-vis other currencies.
One sector of Nigeria’s economy that has the capacity to contribute immensely to healing the country’s economic wounds is petrochemicals, especially fertilizers manufacturing which can engender a value chain reaction that can positively affect agriculture, agribusiness, job creation and food security.
In fact, BMI Research, a Fitch Group research firm that provides macroeconomic, industry and financial market analysis, covering 24 industries and 200 global markets, in its 2016 forecast for Nigeria’s petrochemical sector, forecast that the country’s urea fertilizer capacity will exceed 8 million tons per annum (tpa) by 2020. Of course, massive investments are needed for those projections to be realized.
In that regard, there is good news in the air, as one of Indorama-Nigeria’s subsidiary companies, Indorama Eleme Fertilizer and Chemicals Limited, is set to unveil a brand new world class fertilizer plant.
The completion of Indorama’s brand new fertilizer plant with a capacity to manufacture 1.4 million metric tons per annum (TPA) gives Nigeria hope that the country is already on its way to realizing that prediction. The plant construction was started in April 2013, and completed in the first quarter of 2016.
This plant will speak positively for Nigeria in many respects, especially at this time of falling foreign exchange earnings and the unrelenting pressure on the local currency, the Naira. For instance The Guardian of February 15, 2016 reported that Nigeria commits over $10 million (USD) importing petrochemicals, including fertilizer. Imagine the pressure this and our import-dominated consumption puts the Naira through!
However, with the completion of Indorama fertilizer plant, this outlay will be reduced as it will completely eliminate the need for Dollar or any other foreign currency to import fertilizer, as well as making Nigeria one of the countries in the world that exports the commodity.
Already Indorama, in partnership with another investor, has completed a state of the art port terminal complex at Onne Port with a modern automatic ship loading equipment to cater for export of fertilizer that the local market is not able to absorb.
This effort effectively puts Nigeria in the nucleus of fertilizer exporting nations while enhancing our national reputation as a source for the highest quality urea fertilizer.
The plant’s usefulness to Nigeria was further underlined by Manish Mundra, the MD/CEO of Indorama-Nigeria while speaking to The Guardian (Monday February 1, 2016) where he said “the fertilizer plant will boost the nation’s agricultural sector; provide needed fertilizers for farmers across the country; improve crop yield; fight hunger and poverty; and create numerous employment opportunities in the country. Moreover, Indorama fertilizer will boost Nigeria’s brand reputation as it puts the nation on the global fertilizer map as a producer and exporter of fertilizers”.
Mr. Carsten Mueller, Senior Manager for Manufacturing, Agribusiness and Services at the International Finance Corporation (IFC) strongly believes that the construction of the Indorama fertilizer plant and allied facilities will help Nigeria expand its manufacturing base, add value to its gas resources, boost the agricultural sector and enhance food security.
This is the time for Nigeria to look inwards, boost agricultural production and processing, and earn hard currencies from non-crude oil sales. The arrival of Indorama fertilizer will greatly contribute to this paradigm shift for Nigeria’s progress.
ν Emeana writes from Port Harcourt.