In 2006, the African Union Special Summit of the Heads of State and Government, adopted the 12-Resolution “Abuja Declaration on Fertilizer for the African Green Revolution”, which aimed to increase Africa’s fertilizer use from the then-average 8kg per hectare to 50kg per hectare by 2015. According to the International Fertilizer Industry Association, however, average fertilizer use in the region today is still only 12kg of fertilizer per hectare, compared to 150kg per hectare average in Asia.
Fertilizer subsidy programs have grown in importance in recent years, as more and more African governments enact these programs to try to stimulate agricultural productivity. According to a special 2013 issue of Agricultural Economics, since the mid-2000s, ten African countries spent a total of roughly US$1 billion annually on subsidy programs, amounting to 28.6 percent of their public expenditures on agriculture. After looking at the impact of fertilizer subsidy programs on national fertilizer use, the development of commercial input distribution systems, food price levels, and poverty rates, the authors actually conclude that the costs of such programs, at least as they are currently implemented, generally outweigh any benefits.
While subsidy programs were found to increase food production, the authors point out that regional food self-sufficiency in and of itself will not guarantee more stable food prices. As subsidy programs expand food production, governments often face political pressure to support food prices for producers through marketing boards and discretionary trade policies; the combination of ever-changing input subsidy amounts and prices, government price support levels, and trade policies creates major uncertainty regarding production and prices. Such uncertainty contributes to making food markets unstable and prices in the region more volatile.
The study also finds that while fertilizer subsidies can jump-start agricultural growth, that benefit often slows down and becomes ineffective after the first decade. With governments spending so much of their public expenditures on subsidy programs, public funds are often getting diverted from other important, more effective public uses, such as agricultural R&D and rural infrastructure.
In July 2015, a meeting was held in Johannesburg, organized by the African Fertilizer and Agribusiness Partnership (AFAP) and International Food Policy Research Institute (IFPRI), to review progress on fertilizer use in the region to date. Participants represented Ethiopia, Kenya, Mozambique, Malawi, and Nigeria. An introductory presentation on the progress made thus far in implementing the Abuja Declaration on Fertilizers concluded that while several regional economic communities, or RECs, have taken steps to establish successful regional fertilizer markets, several major challenges remain at both the regional and the country levels. The most important of these are a persistent lack of proper infrastructure, particularly ports; weak or non-existent country-level regulations; poorly functioning subsidy programs; and regulations that vary from country to country within the REC. All of these problems lead to inefficient fertilizer supply chains and subsequently higher costs for farmers.
July’s meeting resulted in several findings and recommended policy actions:
- Countries need to document and share their experiences, success stories, and lessons learned so that mistakes can be avoided and best practices replicated. Specifically, cross-country sharing of experiences with subsidy programs should be encouraged.
- On a related note, there is a desperate need for a properly functioning information-sharing platform. A number of organizations already have useful and current information on the status of fertilizer markets in Africa; for example, FANRPAN has conducted policy studies and impact assessments and has information on subsidy programs from which lessons can be shared and learned regarding the design, implementation, scaling up, and monitoring and evaluation of subsidy programs. RESAKSS tracks progress on CAADP implementation and Africafertilizer.org gathers information and statistics on fertilizer production, consumption, trade and use in Africa. However, greater investment is needed to pool all of this relevant information together and disseminate it effectively among target countries.
- Private sector actors need to be educated on existing policies and regulations on fertilizer marketing and distribution; they also need to be included in the development of future policies that will impact the fertilizer market and their business. One way to do so is through the ESAF Platform being established by AFAP; this platform can work to remove mistrust between the private and public sector at the national level and encourage private sector participation in policy-making processes.
- Finally, countries and regional economic communities should explore the possibilities for harmonizing port regulations across the region to avoid exorbitant handling charges.
On December 10, beginning at 12:00pm GMT, the Africa south of the Sahara Food Security Portal held a virtual dialogue on the important topic of fertilizer use in Africa. This event brought together regional experts to engage with online participants in order to share information, discuss progress and constraints, and brainstorm new ideas to address the problem of low and improper fertilizer use. The finalized list of local experts will be announced in the coming days.
Discussion questions included:
- What is the market structure in Africa’s fertilizer market? How much does the global fertilizer market affect Africa (which imports most of its fertilizer)?
- What is the role of policy in Africa’s fertilizer market?
- What opportunities exist to improve Africa’s fertilizer market, and what are some examples of successful interventions?
- What are the constraining factors (infrastructure, production, information, economy, etc.)?
A summary will follow shortly.
IFPRI gratefully acknowledges the European Commission (EC) for their financial support.