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The European Union announced Tuesday, June 21 a new aid of 600 million euros, mainly intended for Africa to deal with the food crisis caused by the war in Ukraine. Support to resolve the immediate crisis and prepare for the future, for example by promoting access to fertilizers, the weak link in African agriculture.
In this lean season, 43% of Africans are in a situation of food insecurity, they were only 23% in 2021. Because cereal prices have exploded, because the two major world exporters of wheat and fertilizers, the Russia and Ukraine, lack on the world market, African countries have not imported in sufficient quantity, they have bought only half of their fertilizer needs, hence the low local harvests. As the war in Ukraine promises to be long, these two major suppliers are not ready to return to the market quickly.
It is therefore necessary to find alternatives, why not by favoring local supply?
According to the Reuters agency, in the first version of the text detailing European aid, it was explicitly a question of a program intended, among other things, to finance fertilizer factories in Africa. This reference has disappeared. Given that the manufacture of fertilizers is very energy-intensive, it consumes a lot of gas, the committee considers that support for production in developing countries is incompatible with the energy and environmental policies of the 27.
Are African fertilizer players able to respond to local needs?
This is true for the main supplier, Morocco. The world’s fourth largest fertilizer exporter is the leading supplier to African countries. The Office Chérifien des Phosphates provides 60% of needs in West Africa, being present in a dozen countries in sub-Saharan Africa. OCP has increased its production by 10% this year and hopes to manufacture 70% more phosphate fertilizers within four years. A delegation was last week in Niger to discuss a future factory. The second source of supply, Nigeria, is less oriented towards its neighbours. But the product is there. Agribusiness tycoon Aliko Dangoté opened the continent’s largest urea plant in the spring. Eventually, its production could more than cover the needs of Nigeria and its neighbours. Production has started and the order book is already full. The Nigerian billionaire says European clients have already placed orders. He estimates that this factory could bring in $5 billion a year in export revenue to his country.
Nigeria favors the most lucrative customers like Brazil or Europe
Because the margins are more generous. It is now easier and cheaper to export from Nigeria to Brazil than from Lagos to the north of the country. The journey by boat takes only four or five days while road transport from southern to northern Nigeria takes up to ten days and is much more expensive than ocean freight. To ensure local supply to the continent, the entire logistics chain must therefore be considerably improved. But also review the structure of the market. Today the number of intermediaries and the organization of tenders are harmful to imports. Just an example, when a tender is open for 90 days, it pushes away suppliers, because urea, the most consumed fertilizer, can see its price vary by a hundred dollars in a week, no d ‘between them therefore cannot guarantee a price over three months. Reviewing these procedures would lighten the bill and make it easier to obtain the necessary quantities.
►In short
Israel will soon welcome Moroccan workers
In the construction and nursing sector. They are expected next month in the Jewish state. An agreement was announced yesterday between the two countries, as part of the normalization of their diplomatic relations.