The Board of Directors of the African Development Bank Group has given the green light to a crucial project aimed at supporting smallholder farmers in Uganda.
The initiative, known as the “Fertilizer Financing for Sustainable Agriculture Management project,” will provide a total of 60,000 metric tons of fertilizer to benefit 400,000 small-scale farmers in the country.
Under this project, the Africa Fertilizer Financing Mechanism will play a pivotal role by offering $2 million in partial trade credit guarantees, along with a grant of $877,842 to the African Fertilizer and Agribusiness Partnership.
The primary objective over a three-year timeframe is to assist two fertilizer wholesalers in selling a quantity of fertilizer with a value up to fifteen times the amount covered by the $2 million partial trade credit guarantee.
Additionally, the project will establish connections between these wholesalers and approximately twenty-five hub agro-dealers and 125 retail agro-dealers, who will then distribute the fertilizer to the farmers.
This credit facility is designed to mitigate the risks associated with suppliers providing fertilizers to wholesalers on credit. The project is expected to have a transformative impact by not only enhancing crop yields but also providing training to 3.4% of the targeted farmers, with 40% of them being women. The training will encompass essential aspects of farming, such as using improved seeds, maintaining crop nutrition, and adopting best agricultural practices.
Marie Claire Kalihangabo, Coordinator of the Africa Fertilizer Financing Mechanism, highlights the importance of this initiative, stating that “In Uganda, the fertilizer consumption is about 2.5 kg/ha. 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.”
The African Fertilizer and Agribusiness Partnership, a non-profit social enterprise, will collaborate with both public and private sector partners to deepen and expand fertilizer markets across Africa. This project aligns with AfDB’s Feed Africa Strategy, which focuses on increasing food productivity and security. It also builds on the outcomes of the Sustain Africa initiative and the Bank’s Country Strategy Paper for Uganda 2023–2026, in addition to the Technologies for African Agricultural Transformation Programme. The project received approval on September 22, 2023.
In 2006, African leaders charged the Africa Fertilizer Financing Mechanism with the task of aiding African Union Member States in elevating agricultural productivity. This mechanism, established in 2008 and operational since 2015, has had its lifespan extended to 2032 by the African Development Bank’s Board of Governors.
The primary mission of the Africa Fertilizer Financing Mechanism is to create a conducive environment for mobilizing investments to achieve the goal set out in the 2006 Abuja Declaration, which calls for 50 kilograms of fertilizer nutrients per hectare to facilitate an African Green Revolution.