AFAP to Champion Regional Food Security

19 Sep 2017

More than 250 business executives will gather in Ghana’s capital Accra this week to discuss trade opportunities in fertilizers, a key input in boosting food productivity in West Africa – a growing investment destination and agriculture hub in the region.

The West Africa Fertilizer Agribusiness Conference is the second special collaboration between CRU Events and The African Fertilizer and Agribusiness Partnership (AFAP). After the success of the Africa Fertilizer Agribusiness 2016 conference, held in Dar es Salaam in October 2016, CRU and AFAP have partnered once again to focus on the West African region. By continuing this unique partnership we can offer unrivalled networking opportunities with senior decision makers from the biggest fertilizer buyers and manufacturers in some of the world’s fastest growing fertilizer markets. Building on the outcomes from last year’s event, the conference sessions will be centered on three central pillars of partnership, investment and innovation.

The event will focus on the role of fertilizers within West African agribusiness and how the West African agricultural industry can work with international partners to strengthen and improve its agricultural output. Topics under discussion will also extend beyond the fertilizer supply chain to sessions that explore other agribusiness value chain improvements that can catalyze agricultural transformation and boost fertilizer demand in Africa.

West Africa – a region of some 350 million people – is an attractive investment destination and supplies two thirds of the world’s cocoa crop and up to 40% of global cashew production. The region is also a major provider of the world’s peanuts, sorghum, cotton, rice, cassava, coffee, and livestock. Agriculture accounts for 35% of the region’s GDP and employs 60% of the active labour force.

Despite this, many West African countries have been increasingly relying on food imports to meet the demands of their burgeoning urban food markets. West African policy makers and their development partners now recognize the sector’s vital importance for broad-based growth, poverty reduction, food and nutrition security.

The conference will explore challenges and opportunities associated with boosting agribusiness in this region, with particular attention to the role that the fertilizer supply chain can take. West Africa boasts enormous hydrocarbon and mineral wealth that includes huge resources of fertilizer raw materials. We plan to explore the entire fertilizer supply chain in the region. Starting with the ammonia projects in Nigeria and phosphate mines in Senegal, the bottlenecks in trade routes as fertilizers enter the region’s agricultural centers and how to create increase demand among West African farmers.

“Agriculture offers the best opportunity for West Africa to grow its economies and transform the livelihoods of its farmers and to attract investment,” says Pierre Brunache, Jr., Chief Agribusiness Officer at AFAP. “This conference comes at a strategic time for West Africa to develop its agriculture and boost agribusiness as an economic leverage.”

Since 2008 Ghana has implemented a Fertilizer Subsidy Program, aimed at using fertilizer to boost overall crop productivity. Ghana’s new government has set the ambitious plans to continue investing in agriculture in order to become an agribusiness leader for the West African region. President Nana Akufo-Addo was elected in December on a platform of boosting the agricultural sector and creating jobs. The nation seeks to produce more of its own food to cut the cost of imports.

Delegates will benefit from three days of dedicated networking opportunities and a comprehensive program of high level presentations covering key market trends, project updates and supply and demand forecasts.

Drawing on CRU’s technical event experience, the Africa Fertilizer Agribusiness conference will also feature an extensive exhibition of the world’s cutting edge fertilizer and agribusiness technologies and services.

“A huge amount of potential demand is waiting to be unlocked in West Africa, but a number of obstacles need to be overcome before West African farmers are in a position to increase fertilizer application rates,” says the CRU. “Finally, in 2017, there are signs that real steps are afoot to diminish some of these obstacles with potentially significant upside potential for regional fertilizer consumption growth.

According to insight from the CRU, crop yields in West Africa are exceedingly low with smallholder constituting the bulk of farmers, mostly on subsistence scale relying on rain fall with little or no irrigation. Seeds used are often of poor quality; farming techniques are outdated and inefficient. Perhaps most significantly, these farms use little, if any fertilizer. CRU Consulting estimates that fertilizer application rates in West Africa averaged only a tenth of those in Western Europe in 2016.

With 32.5 million people in the region classified as undernourished, and a significant proportion of the region’s food being imported, there is an urgent need to increase farm output.

Developing the agricultural industry is also a critically important step towards stable, long-term economic development. For a region that contains ten of the poorest twenty-five countries in the world, the importance of agricultural development cannot be overstated.

Despite the pressing need for increased fertilizer consumption in the West Africa region, a significant proportion of the fertilizers that are currently being produced in the region are exported elsewhere.

Insufficient understanding of the benefits of fertilizer application can be identified as one of the main causes of low fertilizer application rates in the region. However, the major limiting obstacle to increased West African fertilizer demand is the cost of the fertilizer itself. In West Africa, up to 50% of the cost of a bag fertilizer to the farmer accumulates after the bag has left the factory gate. For imported product in the region, beyond the cost of production and shipping to West Africa itself, there are four main categories of costs that continue to increase costs for farmers: port charges, inland transportation costs; marketing/distribution costs and finance costs.

However, after years of constrained growth in West African fertilizer consumption, there are hopeful signs that serious headway is finally being made in addressing some of these obstacles. The most obvious sign has been through investment in local fertilizer production capacity.