Agro Business

Norway provides $10.15m for fertilizer supply to African smallholder farmers

The Norwegian Agency for Development Cooperation (NADC) has provided an additional $10.15 million to the Africa Fertilizer Financing Mechanism (AFFM). Projects in Uganda, Kenya, and Mozambique—which will obtain AFFM support for the first time—will be the focus of the funding.

The contribution from NORAD will allow the Africa Fertilizer Financing Mechanism to offer credit guarantees for up to 36 months in Uganda, Kenya, and Mozambique, with an anticipated leverage of at least ten times the credit guarantee amount, allowing 850,000 smallholder farmers in the three countries access to at least 85,000 metrics tons of fertilizer.

The NORAD funding will support the African Emergency Food Production Facility, the quick response initiative of the African Development Bank Group to meet Africa’s present food crisis, which has been made worse by climate change, war, pests, and disease.

On December 27, 2022, the African Emergency Food Production Facility window disbursed the first installment of $8.73 million to the Africa Fertilizer Financing Mechanism.

According to Marie-Claire Kalihangabo, coordinator of the Africa Fertilizer Financing Mechanism, “this funding will enable the AFFM to provide financing and credit guarantees for the large-scale supply of fertilizer to suppliers, to enable access to fertilizer on credit to agrodealers, and to contribute to bridging the supply gap of fertilizer in sub-Saharan Africa.

The Bank is preparing to hold the Dakar 2 Africa Food Summit, with the theme “Feed Africa: Food Sovereignty and Resilience,” and NORAD is providing financial support at this time. The summit will bring together governments, leaders of the corporate sector, representatives from NGOs and multilateral organizations, scientists, and researchers to discuss solutions to the growing problems with food security in Africa. Discussions about the effects of increased fertilizer prices on African smallholder farmers will be part of the program.

To fulfill those obstacles, fertilizer must be used properly. The Africa Fertilizer Financing Mechanism’s function is to develop creative financial strategies to promote access to high-quality, reasonably priced fertilizers across Africa.

The shortage in fertilizer availability and accessibility have been made worse by the price hike, endangering agricultural production across Africa. It is conceivable to quadruple agricultural output and incomes of small-scale food producers on the continent when smallholder farmers have timely access to high-quality fertilizers.

In a video interview with Dr. Akinwumi A. Adesina, president of the African Development Bank Group, for the Global Citizen Festival earlier this year, Norway’s Minister of International Development Anne Beathe Tvinnereim stated that the agricultural sector can be a catalyst for the transformation that Africa needs. She continued, We must ensure that [Africa’s smallholder farmers] are able to produce enough food to sustain not only themselves, but also their neighbors and communities.

The interventions in the three nations will build on the achievements of the credit guarantee initiatives run by the AFFM in other nations. For instance, in Tanzania, $31 million worth of farm input supplies were made possible thanks to a $2.4 million trade credit guarantee, with each dollar of the guarantee multiplying fertilizer supplies by more than 15 times.

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