The Africa Fertilizer Financing Mechanism (AFFM) will lengthen a $2 million partial commerce credit score assure to ETG Inputs Ghana Restricted to assist supply of fertilizer to 200,000 smallholder farmers in Ghana’s Higher East, Savannah, Northeast, and Northern Areas. The transfer will ease the present shortages in provide and enhance yields, meals safety, and incomes of farmers within the designated areas.
Underneath the settlement ETG Inputs Ghana Restricted, a subsidiary of agricultural conglomerate ETG, will allow supply of 10,000 metric tons of fertilizer to wholesalers who will distribute it, by way of retailers, to farmers within the areas. The credit score enhancement mechanism is anticipated to cut back dangers related to suppliers promoting fertilizer to wholesalers on credit score, which may end up in farmers having restricted entry to good high quality fertilizer.
“This venture with ETG comes at a time when Africa’s farmers—recovering from the financial impacts of the Covid-19 pandemic— now face rising market costs for fertilizer, largely because of Russia’s struggle in Ukraine,” mentioned Dr. Beth Dunford, the African Growth Financial institution’s Vice President for Agriculture, Human and Social Growth. “This partial commerce credit score assure helps enhance entry to those inputs at extra reasonably priced costs.”
The struggle in Ukraine has contributed to fertilizer shortages, driving costs greater, and decreasing provides. In Ghana, the fertilizer scarcity has now affected 60% of the provision. The nation has seen the price of a 50kg bag of a generally used nitrogen-, phosphorus- and potassium-based fertilizer skyrocket from $26 in November 2021 to $46 in April 2022, in keeping with the Africa Fertilizer initiative, which compiles information, statistics, and knowledge on fertilizers in Africa.
The development is threatening agricultural manufacturing simply as many international locations head into the planting season. On the similar time, imports of meals staples into Africa, corresponding to wheat and oilseed, are additionally being disrupted by the struggle.
Ashish Lakhotia, CEO of Fertilizers and Agri-Inputs at ETG, mentioned fertilizer manufacturing and distribution could be costly. “Securing alternatives for risk-sharing is essential to constructing an atmosphere of belief that results in fertilizer availability for smallholder farmers. I’m assured our collaboration with the Africa Fertilizer Financing Mechanism will mitigate potential dangers we face when coping with wholesalers.”
The venture, which is able to final for one yr, will assist as many as 4 wholesalers to promote fertilizer with a worth of as much as thrice that of the partial commerce credit score assure. It should additionally contribute to linking wholesalers to round 200 retailers who will on-sell the fertilizer to farmers.
The Africa Fertilizer Financing Mechanism is hosted by the African Growth Financial institution. Established in 2007, it seeks to boost pan-African agricultural productiveness by selling using fertilizers.
To be taught extra about AFFM, click on right here.