If Africa will achieve self sufficiency in food production, it must first lay the groundwork for sustainable fertilizer financing across the regions of the continent. This was the takeaway as key stakeholders in West Africa’s fertilizer sector call for more action to support the industry, which is central to the continent’s agricultural revolution. The call came out of the first West Africa Fertilizer Financing Forum, organized by the African Fertilizer Financing Mechanism and partners, and held Abidjan, Cote d’Ivoire from September 30th to October 1st, 2019.
The forum which closed with the signing of a Memorandum of Understanding between the West Africa Fertilizer Association and the Economic Community of West African States (ECOWAS) aims to strengthen the fertilizer value chain in West Africa and set the scene for the implementation of the regional agenda on sustainable agriculture.Speaking on the development, the coordinator of the Africa Fertilizer Financing Mechanism, Marie Claire Kalihangabo said that after intense days of discussions on concrete solutions,” it is now time for us to follow up and make sure that what was said here becomes a reality”.
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Fertilizer is cited as one of the key components in the 2006 Abuja Declaration on Fertilizer for the African Green Revolution. At the time, Africa’s fertilizer use averaged only 8 kilograms per hectare, or 10% of the world’s average, leading to low productivity. Financing remains one of the missing links for a robust agricultural value chain in West Africa, participants said. They also pointed out that fertilizer suppliers and distributors are facing several challenges when it comes to accessing financing through commercial banks and other financial institutions. The challenges include limited working capital, a low equity base and lack of trust.
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Major regional commercial banks attending the meeting expressed their interest in risk-sharing facilities and said stronger collaboration with fertilizer suppliers is needed to facilitate bank access to relevant financial information. Bank representatives also suggested increased working relationships with small and medium fertilizer suppliers and distributors from the West Africa Fertilizer Association in order to boost trade credit with guarantees from the Africa Fertilizer Financing Mechanism.
The Head of Coverage Trade & Agriculture and Food at Société Générale in Côte d’Ivoire Augustin N’dri said that most of the commercial banks offer products that can meet the needs of small and medium size enterprises of the fertilizer sector. However, lack of available information limits their access to…available financing resources. High-level African Development Bank representatives engaged with fertilizer stakeholders and reaffirmed support for the development of agriculture in the region.
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“I reassure you that the African Development Bank is deploying de-risking financial instruments, including partial risk guarantees and partial credit guarantees, to leverage financing and cover for private lenders/investors,” said Martin Fregene, the Bank’s director of agriculture and agro-industry.
“We can now say that conditions are…in place to achieve our common ambitions to foster the future of fertilizers in our region. I am convinced that large companies as well as small and medium-sized companies in the fertilizer industry will be able to implement the conclusions of this forum to expand their activities and thus develop West Africa’s fertilizer industry,” said Kobenan Kouassi Adjoumani, Côte d’Ivoire’s Minister of Agriculture and Rural Development.
The first West Africa Fertilizer Financing Forum was a joint initiative of the African Development Bank’s African Fertilizer Financing Mechanism and the West Africa Fertilizer Association. The forum brought together representatives from the Bank’s regional member countries, commercial banks, development finance institutions and the fertilizer private sector.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.