Achieving sustainable agricultural growth and development in Africa will increasingly depend on more farmers getting timely access to affordable fertilizers.
This was the view of stakeholders and agriculture experts attending the 7th Governing Council meeting of the Africa Fertilizer Financing Mechanism (AFFM), held on 27 February 2019 in Marrakech, Morocco, on the side-lines of the 10th Annual Argus Africa Fertilizer Conference.
The day-long meeting approved AFFM's first Annual Report and discussed ways to facilitate improved access to fertilizers for smallholder farmers. The AFFM Governing Council provided recommendations on the AFFM baseline study and communication strategy. They also considered progress reports on the implementation of credit guarantee schemes for fertilizer importers, distributors and agro-dealers. This will facilitate funding of these agriculture value-chain players by financial institutions. Fertilizer credit guarantee models are currently being developed in Nigeria and Tanzania.
"These solutions will go a long way in contributing to transforming the fertilizer sector in Africa and ensuring a sustainable access to quality fertilizers that Africa needs to achieve food security," said Marie Claire Kalihangabo, Coordinator of the Mechanism at the African Development Bank.
Bank officials held bilateral discussions with representatives of the African Export-Import Bank during the Governing Council - exploring possible avenues to co-support and extend credit guarantees to fertilizer value chain actors on the continent.
His Excellency Josefa Leonel Correia Sacko, the African Union Commissioner for Rural Economy and Agriculture and Chairperson of the AFFM Governing Council called for speedier implementation of the Abuja Declaration, a set of resolutions adopted by African heads of state in 2006 to achieve the Comprehensive Africa Agricultural Development Programme (CAADP).
"Progress on implementation of these resolutions has been slow due to several barriers at national and regional levels. These barriers include financial constraints affecting AFFM operations, insufficient number of agro-dealers, ineffective fertilizer laws, unconducive investment policy environments, and undeveloped market infrastructure among others," Sacko said.
The high cost of fertilizers was a key bottleneck for Africa's smallholder farmers, said Martin Fregene, Director of Agriculture and Agro-Industry at African Development Bank. Fregene said smallholder farmers particularly needed special support - as they usually cannot afford the high prices of fertilizers. He remarked that an inclusive approach involving all value chain actors was needed to attain the target of 50kg of fertilizer nutrients per hectare.
Cross-border fertilizer trade in the era of the emerging African Continental Free Trade Area was also discussed. In this regard, participants agreed that collaboration between the AFFM, the Africa Union Commission and Regional Economic Communities (RECs) was needed to achieve policy harmonization.
The Governing Council also called for a more conducive business environment to grow private sector participation in the fertilizer value chain. They commended the African Union and its partners for ensuring that African realities and views are reflected in the International code of conduct for the management and use of fertilizers, which is currently being reviewed.
On the matter of the AFFM Baseline Study (which provides a monitoring and evaluation tool for measuring the mechanism's impact in nine African countries), the Council urged AFFM stakeholders to consider reviewing policy and regulatory stipulations faced by actors and the distribution and density of agro-dealers per country.
About the Africa Fertilizer Financing Mechanism
The AFFM was established by the 2006 Abuja Declaration. Through this Declaration, African Union Member States committed to an initiative to improve agricultural productivity by providing financing required to debottleneck the use of fertilizers and hence boosting fertilizer use in Africa to achieve the target of 50 kg of nutrients per hectare. AFFM is managed by the African Development Bank to accelerate agriculture development within the context of the Africa Food Security Vision, the Sustainable Development Goals and Africa's Agenda 2063.