African Fertilizer Financing Mechanism
Date of agreement: December 4, 2007
Current volume of the fund: AfDB Grant of UA 5 million; USD 5 million from Nigeria equivalent to 50% of their pledged US$ 10 million; US$ 150,000 representing partial payment of pledge of IFAD's US$ 200,000 pledge. Excluding the Bank's contribution, which does not count towards AFFM's legal operationalization, a shortfall of US$ 4,544,107 exists for the Fund to be declared legally operational.
Background and Objectives
The call for the establishment of the Africa Fertilizer Financing Mechanism (AFFM) was one of the major resolutions of the June 2006 African Union's (AU) Africa Fertilizer Summit in Abuja. At the Summit, African Heads of State and some eminent persons resolved that it was necessary to establish an AFFM for the purpose of increasing fertilizer use in Africa so as to boost agricultural productivity. This in turn, will contribute to economic growth, food security, and sustainable management of natural resources in Africa.
With the support of the UN Economic Commission for Africa (ECA) and the AU Commission, the AFFM was established in March 2007, and is hosted and managed by the Bank in Tunis.
On 4 December, 2007, the Bank's Board of Directors endorsed the legal instrument and the frame work for the establishment of the AFFM. The AFFM Secretariat has been operational at the Bank with Bank support.
Areas of Focus / Sub-Sectors
The AFFM's aim is to support Africa's agricultural sector. Key areas of intervention and support are:
- Facilitation activities including policy formulation, technical assistance, information dissemination, law reform, and project preparation.
- Development of Africa's fertilizer manufacturing capacity.
- Provision of credit guarantees for fertilizer importers and distributors.
- Support for the establishment of regional fertilizer procurement and distribution facilities.
- Development of financing mechanisms in support of fertilizer production, distribution, and agriculture generally.
African small and large scale farmers and the African fertilizer industrial sub-sector, and agricultural research institutions and the private sector involved in agro-inputs trade.
Results and Milestones
Main achievements to date are as follows:
- Established the AFFM Secretariat at the Bank in March 2007.
- Establishedi the AFFM Governing Council (GC).
- Organized the GC's inaugural meeting in Tunis in November 2009.
- Prepared the following operational documents, which were endorsed by the GC: AFFM operational strategy, three-year indicative operational program (2009-2011), and AFFM operational manual on rules of procedure.
- Defined administrative arrangements, including implementation roles, budgeting and opened the AFFM account.
- Developed communication tools, including a brochure and a logo.
- The Bank has received and is considering proposals for possible AFFM support including a) feasibility study to establish a fertilizer production plant for the East African Community (EAC); b) Fertilizer Procurement Facility Pilot for the EAC; c) exploitation of phosphate rock deposits in DRC and Mali; and d) bio-fertilizer production in Cameroon.
- Developed a draft resource mobilization and advocacy plan.
- Bank participation in high level AU meetings to inform stakeholders about the benefits of and progress on the AFFM and mobilize funding for it.
- Ensured continuous liaison with member states, the GC and the AUC.
- Administration and Governance Structure
- The Bank's Board of Directors is responsible for overseeing the general operations of the mechanism and approves all financing. The Board is also responsible for approving the mechanism's annual budget and financial statements.
- The AFFM relies on its governing council to ensure broad donor and stakeholder participation. The governing council includes representatives of donors, African farmers unions, fertilizer industry experts and representatives of African Ministers of Agriculture. They are responsible for providing guidance on the mechanism's strategic direction.
- At the Bank, the day-to-day management of the activities of the AFFM is supervised by an Officer in Charge who reports to the Director of the Agriculture and Agro-Industry Department (OSAN).
Major Activities in 2011-2012 / Additional Resources Required
The main activities planned for 2011 are scaling up the AFFM resource mobilization drive so that the Mechanism can be declared legally operational by the Bank, undertaking preparatory work for commencing studies related to the requests for financing received by the Bank, and following up with stakeholders such as the International Fertilizer Development Centre (IFDC) and the Alliance for Green Revolution in Africa (AGRA) for their technical and/or financial support to the AFFM.
Experiences, Challenges, and Ways Forward
Although field activities have not yet commenced, much has been achieved in terms of preparatory work including hosting and operationalizing the Secretariat at the Bank, as well as mobilization of support for the mechanism through consultation with stakeholders. The mechanism enjoys strong support from the African political leadership. In accordance with the Instrument establishing the AFFM, for it to become legally operational, the Mechanism needs financial contributions and/or Instruments of Commitment from African governments and donors in the amount of US$ 10 million.
Technical Department and Task Manager
Agriculture and Agro-Industry Department
Marie Claire Kalihangabo, Coordinator Africa Fertilizer Financing Mechanism; Tel: 225 20 26 44 50
Communicating with AFFM (Notices and Requests): Notices or requests to the fertilizer fund should be in writing and should be delivered at the following address below or any other address provided by the Bank:
The African Fertilizer Financing Mechanism (AFFM)
(Special AfDB-administered Fund)
Department of Agriculture and Agro-Industry
CCIA Building – Avenue Jean Paul II, Abidjan Plateau
01 Po Box : 1387 Abidjan 01 – Côte d’Ivoire
Telephone: (+2125) 20 26 44 50
Attention: The Coordinator
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