By Robyn Joubert
Thousands of Ugandan smallholder farmers are hoping for higher crop yields following the launch of a fertiliser financing project by the African Fertilizer Financing Mechanism (AFFM) in August 2024. This follows a similar financing scheme launched in Mozambique for 300 000 smallholder farmers.
The AFFM is a special fund administered by the African Development Bank Group. It provides innovative financing solutions to improve production, procurement and distribution of organic and inorganic fertilisers, along with soil health interventions in Africa.
The AFFM Fertilizer Financing for Sustainable Agriculture Management Project in Uganda aims to deliver 60 000 tons of fertiliser to 400 000 Ugandan smallholder farmers in 12 districts. The project is a US$2 million partial trade credit guarantee offered to selected fertiliser suppliers and distributors.
The project expects a 20% yield increase of maize, rice, beans, cabbage and spinach by giving smallholders timely access to fertiliser. It includes training for farmers to promote soil health and good agriculture practices.
AFFM coordinator Marie Claire Kalihangabo said fertiliser was significantly underutilised in sub-Saharan Africa.
Speaking in a podcast on the sidelines of the Africa Food Systems Summit 2024 in Kigali, Marie Claire said bridging the financing gap for fertiliser distribution and manufacturing was critical.
“Investing in fertiliser production, supply and use is crucial for boosting food production and innovation in Africa, where demand for food significantly outpaces supply. The African continent faces a substantial yield gap. Despite the vast agricultural potential of the continent, Africa currently imports around 100 million tons of food annually at a cost of about US$75 billion. The continent is under pressure to meet the food needs of a growing global population,” Marie Claire said.
Limited access to inputs, including fertilisers, and the US$2 billion fertiliser financing gap drive low agricultural productivity.
“There are several challenges hindering investments in the fertiliser sector. On the fertiliser production side, Africa experiences low demand and high local production costs. This makes locally produced fertiliser less competitive compared to imported fertiliser. The other challenge is low demand, which discourages investment in local production and reinforces reliance on imports,” Marie Claire added.
Addressing the rising cost of fertiliser and making it more affordable and accessible to farmers is essential to boosting food productivity and driving economic growth across the continent.
Dexter Tangocci, director at Integrated Aerial Systems, which provides drone crop spraying and surveying, said poor productivity represented a healthy opportunity for Africa.
“65% of the world’s remaining arable land is in Africa, and 65% of Africa’s cultivated arable land is affected by soil degradation. Africa’s yields are only 56% of the international average. So on the one hand the continent faces a huge challenge but on the other it is a massive opportunity for growth in agricultural productivity,” Dexter said.
In June 2024, the AFFM also offered Mozambican farmers a helping hand with the launch of a US$2 million project to deliver 60 000 tons of fertiliser to 300 000 rice, maize and soybean smallholder farmers over the next three years.
The AFFM will support 30 hub agro-dealers and 125 retail agro-dealers and aims to reduce the risks suppliers face delivering fertilisers in Tete, Manica, Nampula, Zambezia, Sofala and Gaza provinces.
In Mozambique, 95% of agricultural production comes from smallholder farmers, while 5% comes from commercial farmers. Mozambique produces sugar, soybeans, bananas, rice, vegetables, nuts, cotton and tobacco.
