This post introduces key themes within the sub-Saharan Africa fertilizer market, sourcing data and insight from the new Argus sub-Saharan Africa fertilizer strategy report (developed in conjunction with the International Fertilizer Development Center).
What is the potential for fertilizers in the region?
The sub-Saharan Africa (SSA) region — with a population of 1.08bn — has an extensive land area that can be used for agricultural crops, but despite this it remains one of the few areas in the world where large tracts of land, suitable for agricultural development, have been unexploited.
The development of higher-yielding agriculture has started from a disadvantaged position in this region, because of a daunting set of barriers which have prevented farmers from applying enough fertilizer nutrients and thereby maintaining adequate soil fertility to achieve agricultural crop potential.
Nevertheless, we can see growth in fertilizer usage over the past 30 years, with consumption more than doubling since 1990.
Fertilizer consumption increasing, but there are some caveats
Fertilizer use in the region has increased rapidly since 2003, with fertilizer consumption (measured as the amount of fertilizer used per hectare of arable land) rising by an average of around 3% per year, data from the World Bank show.
But while this is a positive indicator of a potential shift in the region, the average growth of usage by farmers in most countries in sub-Saharan Africa is still relatively low — and well below the commitment made at the 2006 Abuja Fertilizer Summit of 50 kg/ha.
How to achieve sustainable fertilizer consumption?
Sub-Saharan Africa is at the beginning of a major transition in fertilizer use, inevitably following the path of other regions. The fundamental question is still whether it will be able to produce enough food to feed its growing population.
And if it achieves sufficient balanced fertilization, will this be through the use of straight fertilizers or multi-nutrient products such as NPK, in the form of blends or compounds?
Multi-nutrient products offer farmers significant economic advantages — fewer applications, less fuel and labour, and increased water and nutrient-use efficiencies — and are likely to be important for the future of agriculture in sub-Saharan Africa. They can also be ideal carriers for secondary nutrients and micronutrients, which would otherwise be difficult to apply efficiently, but which will have an increasing role as agriculture develops.
We see the big players positioning themselves early on to supply both compound and blended NPK sectors, taking part in what is expected to be a major spell of demographically driven growth.
How is the sector supported to achieve consumption targets?
To achieve higher fertilizer consumption targets, sub-Saharan Africa has continued to develop fertilizer policies and regulations, from the use of subsidies and assistance with financing to the implementation of e-voucher fertilizer schemes.
The importance of supply corridors has also taken a higher profile, using improved entry ports and logistics development to improve access to fertilizers. The last mile of a fertilizer’s journey to the grower is often the most expensive and often the biggest barrier to its use.
From the private sector, many leading international fertilizer producers are now taking a lead and have started to develop their presence and services in the region, trying to address the barriers to increased fertilizer use. This is because sub-Saharan Africa is plainly seen as the future for growth in fertilizer consumption.
Argus has just released the fifth edition of our strategy report — Argus Fertilizers in sub-Saharan Africa 2021: Resources, markets and logistics. The report delivers essential insight and data on key fertilizer markets and logistics in this exciting region. View more information here.