By Isaac Mwangi and Anne Kiruku
Despite President Uhuru Kenyatta’s efforts to woo Russian businessmen to support a fertilizer manufacturing factory when he addressed more than 40 of them during his recent visit to Russia, Kenya is yet to identify an investor to take up the project.
The Ministry of Agriculture, Livestock and Fisheries has now asked interested firms to submit expressions of interest by October 17.
An advert carried in local newspapers said the government was seeking to engage a strategic investor with extensive experience in manufacturing of DAP, CAN and a range of NPK fertilizers.
“The overall objective of the assignment is establishing a fertilizer plant in the country, thereby bringing down costs to the farmer and also to exploit the vast potential market that exists in the East Africa region,” the ministry wrote in their ad.
The main types of fertilizers used in the country are the compound fertilizers that provide both nitrogen and phosphate. Fertilizers used in planting grains, such as Di-ammonium phosphate (DAP) and Nitrogen phosphate potassium fertilizer (NPK) form the bulk of fertilizers consumed in the country.
Straight nitrogenous fertilizers such as CAN and Urea are used for top dressing, DAP is used on maize and MAP is used on wheat. Varieties of NPK fertilizers are used on tea while murate of potash (MOP) is used on coffee. Specialty fertilizers are mostly used on horticultural crops, especially in the flower industry.
Though the bulk of imported fertilizers are used by large scale farmers, there has been a steady rise in usage by small-scale farmers for growth of food crops (such as maize and domestic horticulture) and export crops.
“We are happy that the government has clarified that fertilizers are not affected by recent increases in VAT (value-added tax). Prices were already going up and this would have made it impossible for many of us to [continue to] use fertilizers,” said Emily Wanjiru, a small-scale farmer in Ruiru on the outskirts of Nairobi.
According to Kenyatta, Kenya needs a total of 500,000 metric tons of fertilizer per year and the amounts are even higher when the greater East African region is put into consideration.
In January of this year, the government imported one million bags of fertilizer worth $23.4 million. This was in addition to a further 800,000 bags that were in the stores. The consignment was for the March-April planting season.
Lack of a fertilizer manufacturing plant has hindered the growth of the agricultural sector in Kenya. This is despite the fact that agriculture employs more than 80 per cent of the workforce and contributes to 60 per cent of total export earnings and about 45 per cent of government revenue. The agricultural sector also contributes 30 per cent of the Gross Domestic Product (GDP). In addition, the sector satisfies most of the country’s food requirements.
A report by the Egerton University Institute of Agricultural Policy and Development shows that fertilizer usage in the country has been on the rise since the importation of fertilizer was liberalized in 2002; previously, only the government could import the commodity. The report says that the government imports the commodity through two agencies – the Kenya Tea Development Agency (KTDA) and the National Cereals and Produce Board (NCPB).
The report, “Trends and Patterns in Fertilizer Use by Smallholder Farmers in Kenya,” says the factors contributing to the rise in fertilizer usage in the country include increased private sector participation in the industry as well as a stable market policy. There has also been a rise in private sector participation in both the importation and retailing of fertilizer after liberalization of the sector in 1990s.
There are 10 importers, with four major firms controlling more than 85 per cent of the market share. There are about 8,000 retailers.
Availability of the commodity in the rural areas due to the private sector’s investment in the distribution network has boosted fertilizer usage in the country since farmers do not need to walk long distances to get the commodity.Credit arrangements and provision of training have also worked well to boost the industry.
“With intensive land use in many densely-populated areas, fertilizers are a must-use for high productivity to be maintained. The problem is that many small-scale traders do not use fertilizers consistently and in the right quantities due to financial constraints,” said Charles Maina, an agricultural extension officer.
