Fertiliser Market Development in Sub-Saharan Africa

Keywords: Sub-Saharan Africa, fertiliser market development, fertiliser consumption, subsidies, supply chain, fertiliser policy, output marketing.

Over the last 50 years cereal productivity per unit area in Sub-Saharan Africa (SSA) has stagnated at around 1 tonnes/ha, compared to over 4 tonnes per hectare (ha) in developing countries. Total agricultural output in SSA has kept pace with population growth (mainly because cultivated area has expanded) and per capita cereal production has remained stable. Nevertheless, 27% of Africa’s population is chronically undernourished.

The low agricultural productivity is largely due to the limited use of mineral fertilisers. Average fertiliser use in SSA is 8 kg/ha compared to the global average of 107 kg/ha. Rates of soil nutrient depletion exceed 60 kg/ha. SSA accounts for more than 10% of the world’s population, but less than one percent of global fertiliser demand. Africa has the natural resources needed to produce fertilisers and is a net fertiliser exporter, but SSA imports over 90% of its fertiliser needs. Several fertiliser plants are being constructed or planned — but while fertiliser production will increase, the majority of this additional production will be exported because of the low demand in SSA.

This paper analyses the reasons for low fertiliser demand in SSA, using a supply chain breakdown. The analysis explains the high cost of fertiliser in SSA and the constraints to fertiliser market development. The paper also discusses national and regional fertiliser policies, and how they can contribute to development of the fertiliser market. ‘Farming as a business’, where farmers produce marketable surpluses for a guaranteed market, is introduced as a major driver for future growth in fertiliser demand in SSA. Initiatives by the global fertiliser industry to increase fertiliser use are described.

In recent years there has been a resurgence of fertiliser subsidies as governments seek to increase fertiliser use, agricultural productivity and food security. Approximately 40% of the fertiliser consumed in SSA is subsidised to various degrees. These subsidies risk eroding previous achievements in private sector fertiliser market development in SSA. The paper explains how targeted subsidies can stimulate fertiliser use while allowing the private sector to develop.

Maria Wanzala¹ and Rob Groot².

¹ Senior Policy Economist, New Partnership for Africa’s Development (NEPAD), P.O. Box 1234, Johannesburg, South Africa.

² Director East and Southern Africa, International Fertiliser Development Center (IFDC), P.O. Box 2040, Muscle Shoals, Alabama 35662, U.S.A.

38 pages, 14 figures, 4 tables, 26 references.