UGANDA – The Board of Directors of the African Development Bank Group (AfDB) has approved nearly US$2.9M in credit guarantees and grant funding to boost farmers’ access to fertilizers under the Fertilizer Financing for Sustainable Agricultural Management (FFSAM) Project in Uganda
The project will advance the Bank’s Feed Africa Strategy by increasing food productivity and security by providing 60,000 tonnes of fertilizer to 400,000 smallholder farmers.
According to AfDB, the African Fertilizer Development Financing Mechanism (AFFM) will provide US$2M in partial commercial credit guarantees and a grant of 877,842 dollars to the Africa Fertilizer and Agribusiness Partnership (AFAP).
The project builds on the results of the Sustainable Africa Initiative, the Bank’s Country Strategy Paper for Uganda 2023–2026, and its Technologies for African Agricultural Transformation Programme.
The Africa Fertilizer Financing Mechanism was formally created in 2008 and became operational in 2015.
The Mechanism’s primary mission is to create an enabling environment for mobilizing the investments needed to achieve the target of 50 kilograms of fertilizer nutrients per hectare, as instructed by the 2006 Abuja Declaration on Fertilizer for an African Green Revolution.
Marie Claire Kalihangabo, Africa Fertilizer Financing Mechanism Coordinator, said, “In Uganda, the fertilizer consumption is about 2.5 kg/ha.
According to her, the project will help to make fertilizer more accessible and appropriately used by farmers, which would in turn boost agricultural productivity and help to improve food security in Uganda.
Over a three-year duration, the project will support two wholesalers to sell fertilizer with a value of up to fifteen times the value of the US$2 million partial trade credit guarantee.
It will also link wholesalers to around twenty-five hub agro-dealers and 125 retail agro-dealers who will on-sell the fertilizer to farmers.
The credit facility will reduce the risks associated with suppliers lending fertilizers to wholesalers on credit.
In addition, the project is expected to boost yields and will also provide training to 3.4% of targeted farmers—40% of them women— on using improved seeds, balancing crop nutrition, and best farming practices.
The African Fertilizer and Agribusiness Partnership is a non-profit social enterprise that collaborates with public and private sector partners to design and execute sustainable development projects.
By providing innovative and market-oriented business solutions, the African Fertilizer and Agribusiness Partnership promotes the growth of the agricultural inputs and agribusiness value chain sectors.