Analysis — The Africa Fertilizer Financing Mechanism (AFFM) has secured a CAD$10 million (US$7.3 million) funding commitment from Global Affairs Canada, aimed at enhancing food production and increasing income for about 800,000 smallholder farmers across Africa.
This financial boost is part of a strategic initiative to empower fertilizer importers and aggregators with access to credit to ensure broader distribution and use of fertilizers across the continent.
The Africa Fertilizer Mechanism is an African Development Bank Group fund that is aimed at supporting fertilizer manufacturing, procurement and distribution and use on the continent. It is also geared towards replicating AfDB's credit guarantee programmes to enable fertilizer importers and aggregators to access the products on credit. Ultimately, the fund is intended to boost efforts to improve soil health and provide technical assistance to farmers.
Signed on March 25, this year, the funding agreement has earmarked (US$7.3 million, Shs 28bn) for the AFFM's 'Fostering Africa's Agricultural Productivity through Fertilizer Value Chain Financing' (FOSTER) programme.
This programme is designed to accelerate the use of fertilizers and improve agricultural productivity in the African Development Bank's (AfDB) regional member countries through innovative financing solutions.
Dr. Beth Dunford, the AfDB's Vice President for Agriculture, Human and Social Development, expressed gratitude for the support from Canada, noting that it will significantly advance the implementation of AFFM's Strategic Plan 2022-2028, which focuses on expanding access to finance through capital investments and policy reforms among other measures, ultimately benefiting Africa's smallholder farmers.
Ahmed Hussen, Canada's Minister of International Development, said Canada is proud to support resilient, climate-smart agriculture and adaptable food production systems in Africa.
"We remain committed to promoting inclusive, green growth in partnership with the African Development Bank, including through our contribution to the Africa Fertilizer Financing Mechanism," said Hussen.
Despite the critical role of fertilizer in food production, its use remains significantly low in sub-Saharan Africa, largely due to limited financing and a lack of technical know-how among farmers.
The FOSTER programme aims to address these challenges by targeting 800,000 smallholder farmers, with a specific focus on including 40% women and 10% youth among the beneficiaries.
The programme is set to improve access to and utilization of 80,000 tonnes of both organic and inorganic fertilizers, potentially increasing agricultural yields by 30%.
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The FOSTER programme also plans to extend credit guarantee facilities to the inputs supply chain in eight African countries and will assist in formulating fertilizer policies and regulatory frameworks to foster gender-sensitive and sustainable soil management practices.
Marie Claire Kalihangabo, the Coordinator of the AFFM at AfDB, welcomed the collaboration with Global Affairs Canada and expressed readiness to effectively fulfill the AFFM's mandate.
The programme aligns with the United Nations' 2030 Agenda, the Sustainable Development Goals, the African Union's Agenda 2063, the Malabo Declaration, and Canada's Feminist International Assistance Policy, which supports gender equality and women's empowerment. It also complements Canada's "Africa Fertilizer and Soil Health" initiative, which aims to transform African agriculture into a productive, competitive, and sustainable sector.
The funding announcement precedes the Africa Fertilizer and Soil Health Summit, scheduled for May 7-9, 2024, in Nairobi, Kenya. The summit will address the decades-long decline in soil quality of farmland in Africa, a phenomenon said to be impacting agricultural production and food security across the continent.
