AFEX Commodities Exchange and African Fertilizer and Agribusiness Partnership, AFAP, have signed Memorandum of Understanding (MoU), to boost fertilizer production and availability for smallholder farmers. The aim of the partnership is to provide finance for dealers to enable farmers gain access to fertilizer in the market, as this would lead to increase in yield, productivity, and financial rewards from harvest.
Country Manager, AFAP, Matthew Adetunji, pointed out that the hoarding and scarcity of fertilizer has slowed the productivity of farmers and availability of food. In addition, blenders do not have access to finance to procure raw materials.
The Managing Director, AFEX Fair Trade, Kamalden Raji, revealed that the plan is not to subsidize the fertilizers directly, but hopes that this venture would lead to a decrease in the price. An increase in supply would also lead to a price reduction, which would drive dealers to sell more.
AFEX has noted that it will not be producing but would rather provide finance and credit for fertilizer producers to source for raw materials. In addition, the company does not have exact cap on the amount that will be invested. They anticipate investing close to N10 billion annually, and AFAP has already invested N1 billion for the pilot. The N10 billion will be allocated to 10 fertilizer blenders but there is a plan to expand based on the success of the project.
To help boost production, AFEX plans to do a distribution programme to provide farmers with fertilizers, inputs, and seeds on credit, and this will be implemented across the country. AFAP also seeks to support the distribution of fertilizer through regular channels.