Fertilizer Palliative to

State Governments

12-07-2023

1
Background

Fertilizer remains a key input requirement for food production.

It constitutes about 40% of the economics of production per hectare of

staple crops.

CBN has fertilizer in custody to ensure production and protect the farmers
from volatility in prices as part of the Anchor Borrower Program

2
 Key components of Fertilizer Pallative

Fertilizer Blend Storage/ Logistics Branding Financing/Funding

Stock warehousing Cost

3
Fertlizer Blend Stock

Requirement is for
7.4Million Metric Balance of 2.9M to be
CBN already has 4.4M
Tonnes to be shared sourced from same
bags
equally among the supplier for consistency
states

4
Proposed Distribution & Proposal for Shortfall

Breakdown and cost of the extra fertilizer required

A total of N96bn for CBN Stock plus N64bn for new stock is required to fund the acquisition of the fertilizer stock
5
Storage/Warehousing Cost

Fertiliser has been CBN has priced the

in Warehouses and storage cost of N8bn
storage costs have into the N96bn
accrued Fertilizer stock cost

6
Logistics
Fertilizer to be distributed to states to ensure farmers get it in
time as agriculture is timebound
NARTO to be engaged having been reliable partner to CBN before.

This would ensure no diversion, consistency of supplies & timely

deliveries.
The total cost is estimated to be N 17bn

7
Branding

Fertilizer to be This would motivate

rebagged with Mr the farmers especially
Also reduce cross
Presidents Picture and in the far north that
border diversion
the words FG Subsidy Mr President cares
Pallative about them

8
Financing/Funding
Option 1

FG to provide guarantee or promissory note to CBN and CBN to disburse to TAK

Agro and FG Recover from states over a 5 or 10 yr period.
Option 2

States to provide ISPO to Banks and CBN would Book Loans against the states and
recover from FAAC.
Option 1 is desirable and faster route

9
 Total Cost of Fertilizer Subsidy

# Item Cost (N billion)

1 Fertilizer Cost (CBN stock + Extra) 160
2 Logistics 17
3 Re-bagging 2
4 Branding 1.5
Total 180.5

10
Thank you
11