The problem of inorganic fertilizer demand and supply in sub-Saharan Africa (SSA) is multifaceted as it is being impacted by multiple factors. The literature is replete with data on the demand factors, but sparse data are available on the supply factors. The PARI/FARA research focuses on supply-side factors and seeks to analyse the overarching research questions that guide the study. The study was conducted using a mixed methods approach in each country (i.e. Ethiopia, Nigeria and Uganda), which comprised (i) a review of the literature on fertilizer supply, demand, and use; (ii) interviews with selected key participants in fertilizer import and marketing and (iii) interviews/surveys with smallholder farmers in Ethiopia, Nigeria and Uganda. The data collected were analyzed using (i) multivariate logistic analysis and (ii) Stepwise Discriminant analysis using SAS programs. Results from the desk study and the field survey showed that the government of each of the three countries used a separate approach for regulating the fertilizer sub-sector. Of the three countries, the most successful is Ethiopia for consistently ensuring that smallholder farmers have uninterrupted access to inorganic fertilizers across seasons at the lowest possible prices. On the contrary, Uganda is still far behind when compared to Ethiopia and Nigeria. The most important constraints to increased fertilizer uptake in Nigeria and Uganda are poor road infrastructure and inconsistent policies regarding fertilizer subsidies.

The introduction of subsidies in Nigeria, for example, in certain years, has contributed to the high costs which have added to fiscal burdens. Uganda recently came-up with the national fertilizer policy, hence, the fertilizer supply chain is still affected by several constraints. The fertilizer supply chain in Nigeria is solely in the hands of selected importers with low capacity to facilitate fertilizer supply. This situation is further worsened by inconsistencies in government policies of fertilizer supply. In the three countries, the fertilizer policy environment seems not to be conducive for the development of competitive fertilizer markets at the local, national and regional levels. In the ECOWAS, COMESA and SADC countries, the fertilizer price is affected by the value added tax (VAT) which is about 18% and other levies, which eventually add-up and increase the delivery prices of inorganic fertilizers to the smallholder farmers. In Uganda, our study revealed the poor quality control, hence, inorganic fertilizers are not properly labelled and are often adulterated. Other factors issues found in the three countries include lack of information and poor linkages between suppliers/wholesalers, traders and smallholder farmers. In Uganda and Nigeria, after the cost, insurance, and freight (CIF), the second highest cost of fertilizer prices is the high cost of transportation which is especially high for a landlocked country like Uganda. Increasing attention to supply-side factors in the use of inorganic fertilizer is an important element that require attention in order to help smallholder farmers gain access to inorganic fertilizers at the lowest cost, at the right time, and in the right quantity so as to increase crop production, and reduce poverty.

Published as FARA Research Report Volume 5, No 15 (2020).