Improving Fertilizer Markets in West Africa: The Fertilizer Supply Chain in Nigeria

Year published: 16/12/2012

African governments, in response to the 2007-8 oil and food crisis and to Resolution 5 of the Abuja Declaration

on Fertilizer,1 have been induced to [re-]introduce subsidies as a short-term solution to artificially reduce

fertilizer prices and increase its use. Yet, if these subsidies are not managed properly and are implemented in

a constrained environment that contributes to inefficiencies and higher fertilizers costs, the introduction of

subsidies not only adds to market distortions but also to higher fiscal burdens. Therefore, a primary motivation

for this study is to identify key constraints along the fertilizer supply chain and recommend policies to expand

fertilizer markets through more efficient distribution and to lower the fiscal burden on governments who wish to

effectively increase fertilizer use in their country and in the West Africa (WA) region.

To carry out this work, four country case studies were undertaken in 2009 and 2010 to assess the fertilizer supply

chain in West Africa. The countries included are Ghana, Mali, Nigeria and Senegal. Field visits were made to

each country to assess the domestic supply chain, including fertilizer distribution channels and their associated

supply cost structure in order to identify key constraints, analyze them and ultimately recommend policies

necessary to effectively remove such constraints, or at least reduce their negative impact along the domestic

supply chain.

This document, part of a series of case studies for the WA region, is based on data and information collected

during the country visit to Nigeria for a rapid appraisal, complemented by literature review and analysis of

secondary data. In addition, this and the other country assessments are the basis for and a complement to the

document “Policy Options for Improving Regional Fertilizer Markets in West Africa” by Bumb, Johnson and

Fuentes (IFPRI/IFDC 2011), which has a broader regional perspective.

Opinions expressed in this paper are those of the authors and not of the International Fertilizer Development

Center (IFDC) or the International Food Policy Research Institute (IFPRI).