4.1 C
Munich
Monday, November 21, 2022

African Development Bank-supported trade credit guarantee project increases access to fertilizer in Nigeria | African Development Bank

Must read

In the midst of Kamba market in Nigeria’s north-western Kebbi State, hub agro-dealer Umar Sani factors to a stack of fertilizer baggage in Alhaji Musa’s retail store, an indication to prospects that the commodity is now out there. Sani, a number one fertilizer distributor in Kamba, is, now greater than ever, a reliable supply of fertilizer following Covid-19 disruptions in world agricultural worth chains and, extra just lately, the warfare in Ukraine.

“We are able to all see that the product is accessible within the store of Alhaji Musa, my retailer, because of the help of the fertilizer commerce credit score assure,” Sani says.

Sani was referring to the credit score assure launched by the African Fertilizer Financing Mechanism in 2019. The initiative makes it simpler for agro-dealers to supply fertilizer for retailers and, in the end, for farmers. The African Fertilizer and Agribusiness Partnership (AFAP) implements the $2.4 million commerce credit score assure scheme within the nation. Underneath the scheme, AFAP offers a assure to again credit score and loans utilized by fertilizer blenders and agri-inputs distributors to help their actions. This helps blenders and distributors borrow on much less stringent phrases, or buy fertilizers and different inputs. The assure additionally provides monetary establishments larger reassurance in lending.

Umar Sani in his warehouse in Kamba

For hub agri-inputs distributors like Sani, the commerce credit score assure program helps to considerably increase fertilizer gross sales. 

Sani mentioned: “When the assure covers our transactions with fertilizer blenders, I can promote greater than 200 tonnes of fertilizer per week. With out the credit score facility, I can solely afford to promote 80 to 90 tonnes of fertilizer weekly. The influence of the credit score facility on our enterprise is immense.”

The scheme covers Sani’s transactions with Alelawa Fertilizer and Chemical Restricted a fertilizer blender in Sokoto, a roughly three-hour drive northeast of Kamba. As of February 2022, the corporate had provided 2,580 tonnes of fertilizer beneath this system. The scheme additionally helped Alelawa work with native banks, which historically aren’t snug lending to the blenders, as their transactions are typically safer beneath the assure facility.

“AFAP is utilizing the credit score assure program to strengthen working relationships between fertilizer suppliers and inputs distributors. This system has improved our collaboration with native monetary establishments by offering different financing choices. As beneficiaries, the ensures assist us purchase uncooked supplies and important substances to maintain our mixing enterprise up and working,” mentioned Suleiman Abubakar, Alelawa’s Common Supervisor.

“We hope this system will improve our mixing capability utilization and distribution extra within the coming seasons,” he added.

In Nigeria, the challenge used the $2.4 million commerce credit score assure to promote fertilizer almost six instances, valued at $14.2 million in some elements of the nation. By working with fertilizer suppliers and agro-dealers, the challenge additionally helped mix and distribute at the very least 39,457 metric tons of fertilizer to an estimated 38,000 smallholder farmers.

- Advertisement -spot_img

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -spot_img

Latest article