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AfDP, AFAP To Extend Fertiliser Credit Guarantee Scheme To Uganda

by Jacquiline Nakandi
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By Prossy Nandudu

Access to fertilisers remains a challenge not only to smallholder farmers in Uganda but to farmers across the region.  

This is attributed to high costs, diminishing soil fertility, and lack of knowledge on how to apply fertilisers, as well as the benefits that come along with the application of fertilisers. 

As a result, food production in most parts of Africa and Uganda, in particular, is likely to drop, an issue that will force countries to import foods to prevent starvation. 

Rhoda Peace Tumusiime, the former African Union Commissioner for Agriculture and now a board member of the African Fertiliser and Agribusiness Partnerships (AFAP), said the current food import bill into Africa is worth $40bn. 

Tumusiime added that for the import bill to reduce through increased productivity, there is a need for an increase in the usage of fertilisers and in Uganda, the current usage is at 1.5kgs per hectare per year as opposed to 50kgs per hectare per year, recommended by heads of state at the Abuja Declaration.   

(L-R) Commissioner, Department of Crop Inspection and Certification Ministry of Agriculture Animal Industry and Fisheries Paul Mwambu, African Fertilizer and Agribusiness member Peace Rhoda and other guests during the African Fertilizer and Agribusiness Partnership workshop held in Speke Resort Munyonyo on March 3. (All Photos by Alfred Ochwo)
(L-R) Commissioner, Department of Crop Inspection and Certification Ministry of Agriculture Animal Industry and Fisheries Paul Mwambu, African Fertilizer and Agribusiness member Peace Rhoda and other guests during the African Fertilizer and Agribusiness Partnership workshop held in Speke Resort Munyonyo on March 3. (All Photos by Alfred Ochwo)

“We cannot grow enough food unless the soils are fed, they have been depleted. We want to increase productivity but we cannot do that unless the soils have been enriched with nutrition and nutrition for the soils comes from fertiliser,” said Tumusiime. 

She made the remarks on Monday while officiating at the start of the two-day East Africa Regional Public-Private Dialogue, which is taking place at Speke Resort Munyonyo. The dialogue is running under the theme The Future of Fertiliser and Agro-Inputs in Africa. 

However, for the increase in production and the reduction in food imports to happen, stakeholders called for funding in terms of credit for importers and distributors of fertilisers if farmers are to access fertilisers cheaply. 

At the moment, the cost of fertilisers has increased with a bag of NPK (which is a combination of Nitrogen Potassium and Phosphate) selling at sh200,000 an increase from sh120,000 in 2019 to 2020 for example.  

The rise partly has been attributed to disruptions in the supply chain due to wars and Covid 19, according to Tumusiime. 

Funding intervention 

In response, Michael Sudarkasa, the AFAP chief executive officer, revealed that they are in final talks with the African Development Bank (AfDB) to provide a fertiliser guarantee scheme to Ugandan distributors to access fertilisers cheaply but in bulk so as to make them affordable to smallholder farmers. 

Paul Mwambu Commissioner, Department of Crop Inspection and Certification Ministry of Agriculture Animal Industry and Fisheries speaks during the African Fertilizer and Agribusiness partnership workshop held in Speke Resort Munyonyo on March 3.
Paul Mwambu Commissioner, Department of Crop Inspection and Certification Ministry of Agriculture Animal Industry and Fisheries speaks during the African Fertilizer and Agribusiness partnership workshop held in Speke Resort Munyonyo on March 3.

The three-year program is to be implemented in the third quarter of this calendar year. Distributors are already at work in Nigeria and Kenya. 

“Distributors didn’t have the capital to buy as much fertilisers that they needed to circulate in their networks. We had final deliberations with the team last week, budgeting is in going so we are looking forward to having that program at the end of the second quarter of this year,” said Surdakasa. 

Under the scheme, AFAP provides a guarantee to back credit and loans used by fertiliser blenders and agri-inputs distributors to support their activities. This helps blenders and distributors borrow on flexible terms to stock fertilisers and related inputs. 

The conference has attracted various stakeholders from the public and private sectors including regional delegates from Tanzania, Rwanda, and Kenya. Delegates discussed actionable and outcome-oriented strategies for addressing the challenges facing the African fertiliser and agro-inputs markets. 

Nyungu Anthony, the chief of party USAID/Feed the Future Uganda Institutional and Systems Strengthening Activity, highlighted the importance of public-private partnerships in addressing these challenges. 

“We need to work together to create sustainable and inclusive markets for fertilizer and agro-inputs in Africa,” Nyungu said. 

Dr John Mukuka, the CEO of ACTESA/COMESA, emphasised the significance of regional cooperation in achieving sustainable solutions. 

“We must continue to work together as a region to address these challenges and create a more sustainable future for Africa’s agriculture sector,” he said. 

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