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Technology

Cellulant wins Sh745m Nigeria subsidy contract

Cellulant, a Kenyan software firm, has been awarded a four-year Sh745 million contract by Nigeria’s federal government to run an e-mobile registration and validation system for subsidised fertiliser.
Cellulant, a Kenyan software firm, has been awarded a four-year Sh745 million contract by Nigeria’s federal government to run an e-mobile registration and validation system for subsidised fertiliser.  

Cellulant, a Kenyan software firm, has been awarded a four-year Sh745 million contract by Nigeria’s federal government to run an e-mobile registration and validation system for subsidised fertiliser.

Nigeria seeks to 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 (Sh465 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 Sh58,100 ($700) to Sh149,400 ($1800) 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.

20 million farmers

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.
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.

Cellulant has operations in Kenya, Nigeria and the UK besides clients in Kenya, Tanzania, Nigeria, South Africa and Botswana. Its most visible business is provision of ring tones.
Some of its local clients include financial institutions as KCB, Barclays and Standard Chartered banks where it offers mobile banking platforms.

The software firm has been powering mobile banking for StanChart for about three years across five countries in Africa (Ghana, Zambia, Botswana, Nigeria and Kenya) and is looking to rolling out this across all the bank’s markets in Africa.

This has enabled the bank’s customers across the continent to enjoy mobile banking, merchant payments, web payments, digital content and agency banking on their phones.

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