Both supply and demand constraints have long hindered the emergence of viable fertilizer markets in Sub-Saharan Africa. Since nearly all fertilizer is imported, the cost of fertilizer is dependent on transport costs, and landlocked countries such as Mali are particularly disadvantaged with respect to this bulky input. Transport and logistics costs in Africa have been found to be three to four times higher than they are in the US, explaining the fact that in general farmers in Sub-Saharan Africa pay at least double the price for fertilizer relative to farmers in Asia and the US (Heisey and Norton, 2007; Morris et al., 2007). The marked seasonality of demand for fertilizer in rainfed systems and the bulkiness of the product lead to relatively slow stock turnover, considerable storage requirements, and high finance charges, resulting in risk for distributors and dealers. On the demand side, high cost, combined with low agronomic efficiency, has made the use of inorganic fertilizers unprofitable for many farmers in Sub-Saharan Africa. Much greater agronomic efficiency in fertilizer use is likely to be necessary in order to generate the incentives for sustainable increases in fertilizer demand. This problem is indicated by relatively low response rates to fertilizer estimated for maize across the continent (e.g., summary in Jayne et al. 2018 for maize in Kenya, Malawi, Tanzania, Ghana, Zambia and Ethiopia; Morris et al. (2007) for maize and other crops for the continent as a whole; for dryland cereals in Mali, Haider et al. 2018; for maize in Burkina Faso, Theriault et al. 2018a).
Confronted with such challenges, it is not surprising that most policymakers in Sub-Saharan Africa followed policies pursued in Asia and chose primarily state-led approaches from the late 1960s until the mid-1980s. Strategies to promote fertilizer use included government programs that supplied inputs with subsidized credit programs that linked inputs to outputs, large-scale demonstration programs such as Sasakawa Global-2000, and state-owned company models like those developed for export crops like cotton in Mali. Fiscal crises and donor pressures under structural adjustment eventually ended subsidies in a number of countries beginning in the late 1980s through the early 1990s.
By the early 2000s, the urgency of arresting soil nutrient mining combined with rising fertilizer and food prices once again stimulated interest in ways to raise fertilizer use. Input subsidy programs were re-introduced under a new, “smart” guise (Morris et al., 2007; World Bank, 2007; Minde et al. 2008; Dorward 2009). Noting then that there is no universally applicable “recipe” for a successful fertilizer promotion strategy, Morris et al. (2007) proposed guiding principles based on “recurring lessons” from previous experience. Generally adopted by the World Bank, these core principles require that subsidies be 1) focused to encourage incremental use by farmers who do not already use them; 2) market-supporting (not displacing of existing sales) in order to encourage the development of the private sector; 3) part of a broader development strategy, thereby avoiding the substitution of a subsidy for other public investments; and 4) temporary.