Kenya software firm Cellulant lands $9m Nigeria fertiliser dealBy MARK OKUTTAH for Business Daily | Monday, April 9 2012 at 16:21
Cellulant, a Kenyan software firm, has been awarded a four-year Sh745 million ($8.98 million) contract by Nigeria’s federal government to run an e-mobile registration and validation system for subsidised fertiliser.
Nigeria wants build an efficient distribution channel to deliver fertiliser to farmers, empower them to increase their yield and encourage a shift from subsistence to commercial farming.
Cellulant joins a host of Kenyan ICT firms clinching lucrative deals abroad. Seven Seas recently secured a $5.6 million to upgrade Zesco, the Zambia power distributor’s IT systems.
In the Nigerian case, an accredited farmer receives allocation of fertiliser through a pin sent to his or her phone which the recipient then takes to the bank and pays at a subsidised rate.
After the payment, the farmer is given a voucher which he uses to collect the fertiliser from an accredited agro distributor.
The system is expected to boost the average farmers’ incomes from $700 to $1,800 over three to four seasons.
Previously, Nigeria had provided subsidy through distribution via its network of warehouses across the country.
But only 11 per cent of the fertiliser reached farmers. This slowed down growth of the agriculture sector, threatening food insecurity.
"A lot of the fertiliser ends up in the hands of political farmers and they sell it back to the market at a higher price. This has been aided by the previous inefficient governments’ procurement and distribution system,” said Nigeria’s vice president, Namadi Sambo in a statement.
The Cellulant programme targeting 20 million farmers, dubbed the GES (Growth Enhancement Support Scheme) has deployed a mobile commerce platform that allows the government to give fertiliser subsidy directly to the farmers by transmitting money directly to their mobile phones.
The Federal Executive Council approved the contract in late March. It anticipates this will put 20 million farmers in mobile-driven agricultural value-chain.
Mr Ken Njoroge, Cellulant group chief executive officer said the system—dubbed the mobile wallet—allows e-registration and validation of farmers and provides tracking tools to allow other players to participate in value addition.
"It allows banks to participate by lending to the farmers and agro-dealers by providing risk management tools,” said Mr Njoroge.
The Nigeria government is offering a 50 per cent fertiliser subsidy to the farmers who are required to pay the balance through an arrangement with the banks.
It says other than ensuring efficient distribution of the fertiliser, the system provides an opportunity to know the farmers and as such enhance financial inclusion.
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