Uganda: AfDB approves fertilizer project for Ugandan small-scale farmers

The African Development Bank Group’s Board of Directors has approved a project to supply 60,000 metric tons of fertilizer to 400,000 smallholder farmers in Uganda.

In a press release, the directors stated that within the scope of the Fertilizer Financing for Sustainable Agriculture Management project, the Africa Fertiliser Financing mechanism will offer $2 million (Ush7.5 billion) in partial trade credit guarantees and a grant of $877,842 (Ush3.3 billion) to the African Fertilizer and Agribusiness Partnership.

The African Fertilizer and Agribusiness Partnership is a nonprofit social enterprise that works in partnership with both public and private sector entities to enhance input value-chains, with a specific focus on expanding and diversifying fertilizer markets throughout Africa.

The AfDB’s board of directors clarified that the project will span more than three years, aiding two wholesalers in selling fertilizer with a value up to 15 times that of the $2 million partial trade credit guarantee. Additionally, it will connect these wholesalers with approximately 25 hub agro-dealers and 125 retail agro-dealers who will subsequently distribute the fertilizer to farmers.

They expect that the credit facility will mitigate the risks related to suppliers extending credit to wholesalers for fertilizer transactions.