Understanding the effects of the 2021/22 fertilizer price spike on agricultural input markets in six sub-Saharan African countries

The spike in inorganic fertilizer and food commodity prices during 2021/22 was extremely pronounced and long-lasting in sub-Saharan Africa (SSA). This study documents how fertilizer prices in the region compare to the world price during this time. We also document and identify issues with the fertilizer market structure, along with policy responses that may have prolonged or exacerbated the fertilizer price spike in six focus countries of Ghana, Kenya, Malawi, Nigeria, Tanzania, and Zambia. Our findings indicated that the fertilizer price spike was much longer-lasting and more pronounced in SSA when fertilizer prices were denominated in local currencies than in US dollars. This highlights the macroeconomic challenges these countries faced due to their local currencies depreciating against the dollar. We also found that the fertilizer market structure above the retail level is usually highly concentrated in much of the region, though there are some examples of competition increasing and new companies entering the market for importing, blending, and wholesaling. Many African governments were also slow to react to the price spikes, and when they responded, many of them used supply-side interventions like bulk procurement of fertilizer or demand-side interventions like direct subsidies to farmers. Furthermore, the unclear and late interventions by the government inhibited the private sector from fully engaging in the market during the spike. We conclude with recommendations and suggestions for making African fertilizer markets more resilient to the next price spike.