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Business Reporter

Zimbabwe is set to receive commercial credit guarantees worth over US$4 million from the African Development Bank (AfDB) through its African Fertiliser Financing Mechanism to support the local industry, the bank said in a statement last week.

This was after the AfDB approved the US$11,7 million budgetary allocation to the AFFM for 2023 to strengthen the fertilizer sector through access to finance, supporting the development of sustainable policy reforms to improve fertilizer production.

The US$11,7 million adds to the US$16,4 million extended to the facility this year, including US$4,7 million, which was carried over from the previous year.

According to the bank, the AFFM would continue implementing three commercial credit guarantee projects amounting to US$8,3 million, with Zimbabwe being the largest recipient.

The AFFM will also extend the commercial credit guarantees worth US$2 million to Côte d’Ivoire and Ghana apiece. For 2023, it also plans to implement trade credit guarantee schemes totaling US$9,7 million in Tanzania, Uganda, Mozambique and Kenya. Three more new projects could be launched in Senegal, Zambia and Ghana if the United States Agency for International Development (USAID) follows through on its US$15 million pledge to the AFFM.

“The 2023 projects will be implemented to support the second pillar of the Bank’s African Emergency Food Production Facility, which was launched to avert a looming food crisis in Africa following Russia’s (military operation) in Ukraine,” said the AfDB.

“In addition, AFFM will actively work with African countries and other key stakeholders to develop the national food and agriculture pacts that the continent’s leaders presented at the Feed Africa Summit in Dakar in January 2023.”

The AFFM will facilitate smallholder farmers’ access to inputs and extension services through credit guarantee projects and capacity building for farmers and input distributors.

The objectives are to ensure proper use of fertilizers, increase agricultural productivity and improve soil conditions. The AFFM will continue to work with the International Fertiliser Development Centre and the Alliance for a Green Revolution in Africa on initiatives to improve fertilizer production, trade and use launched in 2021.

It will also conduct an in-depth analysis of fertilizer policy in at least ten African countries, which will map the current situation, identify gaps and prepare an action plan. The aim is to support policy orientations that will address the identified shortcomings.

Established by the African Union in Abuja in 2006, the African Fertiliser Financing Mechanism is a special fund that aims to improve agricultural productivity by providing the necessary financing to boost fertiliser use in Africa and achieve the 50 kilograms of nutrients per hectare target. It is hosted and managed by the African Development Bank. The AFFM has a strategic plan for the 2022 – 2028 period.

In Africa, AFFM’s work is crucial in addressing food crises and various threats to food security caused by Russia’s military operation in Ukraine.