Policy Brief: Promoting Competition in the Fertilizer Industry in Africa

Agricultural productivity is lagging in some developing regions, including Africa south of the Sahara. Productivity in these regions suffers in part due to the low adoption of improved land management practices, including adequate fertilizer use. Those countries that have successfully increased their agricultural productivity have also considerably increased their use of fertilizer. But in Africa south of the Sahara, fertilizer application rates average just 10 kilograms (kg) of nutrients per hectare (ha) of arable land, compared to 86 kg/ha in South Asia, 118 kg/ha in Latin America, and 198 kg/ha in an average middle-income country.

Given the central role that agriculture plays in the rural economy of Africa, several countries have implemented supply and demand-driven policies and programs to promote sustainable fertilizer use, with mixed results. However, not much has been said about the market structure or competitive behavior along the supply chain in the highly concentrated fertilizer industry, nor about how this affects fertilizer uptake in the region. Globally, the industry has only a few producers, and African countries are highly and increasingly dependent on imported fertilizer. Locally, fertilizer distribution channels are also characterized by a limited number of market actors, often with a poor dealer network.

Continue to read the brief (with Manuel A. Hernandez).

(Photo credit: CIAT via Creative Commons)