Africa Fertilizer Financing Facility awards $2 million to ETG Inputs Ghana Limited to improve farmers’ access to fertilizers

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The African Development Bank’s African Fertilizer Financing Facility provides a $2 million partial trade credit guarantee to support the delivery of fertilizer to 200,000 Ghanaian smallholder farmers

ETG Inputs Ghana Limited, a subsidiary of agricultural conglomerate ETG, will enable delivery of 10,000 tonnes of fertilizer to wholesalers

The African Fertilizer Financing Mechanism (AFFM) will provide a $2 million partial trade credit guarantee to ETG Inputs Ghana Limited to support the delivery of fertilizer to 200,000 smallholder farmers in the Upper East Ghana, savannah, Northeast and North. This move will alleviate current supply shortages and increase yields, food security and farmer incomes in the designated areas.

Under the terms of this agreement, ETG Inputs Ghana Limited, a subsidiary of the agricultural conglomerate ETG, will allow the delivery of 10,000 tonnes of fertilizer to wholesalers who will distribute it, via retailers, to farmers in the regions. The credit enhancement mechanism is expected to reduce the risks associated with suppliers selling fertilizer to wholesalers on credit, which may limit farmers’ access to good quality fertilizer.

“This project with ETG comes at a time when African farmers – recovering from the economic impacts of the Covid-19 pandemic – are now facing rising market prices for fertilizers, largely due to the war of Russia in Ukraine,” said Dr Beth Dunford, the African Development Bank’s Vice President for Agriculture, Human and Social Development. “This partial trade credit guarantee helps improve access to these inputs at more affordable prices.”

The war in Ukraine has contributed to fertilizer shortages, higher prices and reduced supplies. In Ghana, the shortage of fertilizer has now affected 60% of the supply. The country has seen the cost of a 50kg bag of a commonly used nitrogen, phosphorus and potassium fertilizer skyrocket from $26 in November 2021 to $46 in April 2022, according to the Africa Fertilizer Initiative, which compiles data, statistics and information on fertilizers in Africa.

The trend threatens agricultural production just as many countries head into the planting season. At the same time, imports of basic foodstuffs into Africa, such as wheat and oilseeds, are also being disrupted by the war.

Ashish Lakhotia, CEO of Fertilizers and Agri-Inputs at ETG, said producing and distributing fertilizers can be expensive. “Securing risk-sharing opportunities is key to creating an environment of trust that leads to fertilizer availability for smallholder farmers. I am confident that our collaboration with the African Fertilizer Financing Mechanism will mitigate the potential risks we face when dealing with wholesalers.

The one-year project will help up to four wholesalers sell fertilizer worth up to three times that of the partial trade credit guarantee. It will also help link wholesalers to about 200 retailers who will resell the fertilizers to farmers.

The African Fertilizer Financing Mechanism is hosted by the African Development Bank. Created in 2007, it aims to improve pan-African agricultural productivity by promoting the use of fertilizers.

To learn more about the AFFM, click here (https://bit.ly/3xcSebK).

Distributed by APO Group for the African Development Bank (AfDB) Group.

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