News hotlines: 08111813019, 08025868561
Email: firstname.lastname@example.org, email@example.com
Key stakeholders in West Africa’s fertilizer sector are calling 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 at the African Development Bank (AfDB) in Abidjan recently.
A major outcome of the forum was the signing of a Memorandum of Understanding between the West Africa Fertilizer Association and the Economic Community of West African States (ECOWAS). The agreement aims to strengthen the fertilizer value chain in West Africa and set the scene for the implementation of the regional agenda on sustainable agriculture.
Marie Claire Kalihangabo, coordinator of the Africa Fertilizer Financing Mechanism, which was established by the Bank in 2007, said “After two 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.”
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.
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.
Augustin N’dri, head of coverage trade & agriculture and food at Société Générale in Côte d’Ivoire, said “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.
“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.
In his remarks, Kobenan Kouassi Adjoumani, Côte d’Ivoire’s Minister of Agriculture and Rural Development “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.”
Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.