Ghana Fertilizer Value Chain Optimization Study Final

Ghana Fertilizer Value Chain
Optimization Study
Revised August 2019
DISCLAIMER:
This report is made possible by the generous support of the American people through the
United States Agency for International Development (USAID) under the Feed the Future
initiative. The contents are the responsibility of IFDC and do not necessarily reflect the views
of USAID or the United States Government.
Table of Contents
1. BACKGROUND .................................................................................................................... 10
2. OBJECTIVES ....................................................................................................................... 10
3. FERTILIZER TRADE AND CONSUMPTION IN GHANA ........................................................ 10

3.1 Summary of International and West African Fertilizer Contexts ................................... 10
3.2 Fertilizer Trade and Consumption in Ghana .................................................................... 14
3.2.1 Apparent Consumption Increased by 50% from 2013 to 2017 ................................................. 15
3.2.2 Improvement in Timing of Imports .......................................................................................... 17
3.2.3 Structure of Fertilizer Distribution in Ghana ............................................................................ 18
3.3 Fertilizer Consumption per Crop ....................................................................................... 19
4. FERTILIZER PROCUREMENT PROCESSES AND COST BUILDUP IN GHANA ...................... 20

4.1 Fertilizer Import Procedures .............................................................................................. 20
4.1.1 Import Clearance Process.......................................................................................................... 20
4.1.2 Duties and VAT ........................................................................................................................ 21
4.2 Fertilizer Supply Cost Buildup ........................................................................................... 21
4.2.1 Costs of Importing Fertilizers through the Port of Tema .......................................................... 21
4.2.2 Domestic Distribution Costs ..................................................................................................... 26
4.2.3 Subsidized Fertilizer Cost Estimation ....................................................................................... 29
4.2.4 Cost of Procuring Subsidized Fertilizer vs. Commercial Distribution ..................................... 31
4.3 Some Options to Reduce Domestic Costs of Supplying Fertilizers .................................. 33
4.3.1 Facilitating Delivery of Import Permits .................................................................................... 33
4.3.2 Improving Port Operations........................................................................................................ 33
4.3.3 Transport ................................................................................................................................... 33
4.3.4 Investing in Warehousing Capacities ........................................................................................ 34
5. DEVELOPING THE FERTILIZER (BLENDING) MARKET..................................................... 34

5.1 Potential Market Demand for Fertilizers........................................................................... 34
5.2 The Current Blend Market Situation ................................................................................. 35
5.3 Potential Market Demand for Blends................................................................................. 36
5.3.1 Potential Market Demand for Different Blends ........................................................................ 36
5.3.2 Supplying Balanced Fertilizer Based on Ghanaian Soil Characteristics .................................. 37
5.3.3 Potential and Feasibility for Fertilizer Formulation Shifts ....................................................... 39
5.3.4 Developing Local Raw Materials to Produce Blends ............................................................... 39
5.4 Producing Blends in Ghana ................................................................................................. 40
5.4.1 Current Blending Facilities and Capacities ............................................................................... 40
5.4.2 Blending Unit Investment, Economic Benefit, and Profitability .............................................. 40
5.4.3 The Small Blending Plant Option ............................................................................................. 41
5.4.4 Deploying Additional Blending Units and/or Optimizing Current Blending Capacity? .......... 41
5.5 Needed Changes to Unlock the Potential of the Blend Market ........................................ 42
5.5.1 Introducing Blends into the Subsidy Program .......................................................................... 42
5.5.2 Investing in Education .............................................................................................................. 42
6. FERTILIZER VALUE CHAIN OPTIMIZATION ..................................................................... 43

6.1 Background of the Ghana Fertilizer Subsidy Program .................................................... 43
6.1.1 Since 2008: Reintroduction of Fertilizer Subsidy Programs .................................................... 43
Ghana Fertilizer Value Chain Optimization Study i

6.1.2 2016: Prioritizing Agriculture ................................................................................................... 43
6.1.3 2017: Planting for Food and Jobs Program ............................................................................... 43
6.1.4 2018: Adjusting the Planting for Food and Jobs Program ........................................................ 44
6.2 The Fertilizer Subsidy Scheme............................................................................................ 45
6.2.1 Determining Subsidy Allocation ............................................................................................... 45
6.2.2 Selecting Fertilizer Suppliers .................................................................................................... 45
6.2.3 Companies Involved in the Subsidy Program ........................................................................... 46
6.2.4 Distributing Fertilizers to Farmers ............................................................................................ 47
6.3 Costs of the Program and Prices ......................................................................................... 49
6.3.1 Funding of the 2018 PFJ and Beyond ....................................................................................... 49
6.3.2 Pricing, Payment Scheme, and Timelines ................................................................................. 49
6.4 Preparing for the 2019 Planting for Food and Jobs Campaign ....................................... 52
7. FERTILIZER VALUE CHAIN OPTIMIZATION ..................................................................... 54

7.1 Key Findings and Challenges in the Fertilizer Value Chain ............................................ 54
7.1.1 Limited Capacity to Enforce Regulatory and Policy Framework for Product Quality Control 55
7.1.2 Low Margins Along the Domestic Distribution Channels........................................................ 55
7.1.3 Weak Distribution Networks Served by Agents With Limited Capacity and Knowledge ....... 56
7.1.4 Limited Incentives for Private Sector to Invest Beyond Government-Sponsored Programs.... 56
7.1.5 High Financial Costs and Limited Access to Finance .............................................................. 56
7.1.6 High Logistic Costs ................................................................................................................... 56
7.1.7 Lack of Farmer Access to Reliable and Remunerative Markets ............................................... 57
7.2 Policy Implications and Recommendations (Medium- to Long-Term) ........................... 57
7.2.1 Toward Smart Subsidies: Policy Reform Approach and Tool to Reform the Current Subsidy
Program ..................................................................................................................................... 57
7.2.2 Promote Inclusive and Fair Participation of Key Business Actors in the Subsidy Program .... 59
7.2.3 Promoting a More Transparent and Collaborative Environment in the Fertilizer Sector ......... 61
7.2.4 Enforce Fertilizer Regulatory Framework and Increase Quality Control Capabilities ............. 63
7.2.5 Properly Target Beneficiaries (Farmers, Zones, and Crops)..................................................... 64
7.2.6 Invest in Knowledge and Research Capacity in the Fertilizer Sector ....................................... 65
7.2.7 Offer Financial Incentives by Easing Access to Finance .......................................................... 66
7.2.8 Reduce Logistics Costs by Investing in Infrastructure ............................................................. 67
7.2.9 Improve the Business Environment in the Agriculture Sector ................................................. 68
7.3 Specific Recommendations for the 2019 PFJ Campaign (Short-Term) .......................... 71
7.3.1 Eight Measures Proposed for the PFJ 2019 Campaign ............................................................. 72
7.3.2 How MoFA Intends to Implement the Measures? .................................................................... 76
7.3.3 Preparing for the 2020 PFJ Campaign (Medium-Term) ........................................................... 77
8. ANNEX................................................................................................................................ 78
Reference Documents/Bibliography ...................................................................................................... 78
Methodology .......................................................................................................................................... 79
Essential Agricultural Statistics ............................................................................................................. 81
Detailed Structure of Fertilizer Distribution in Ghana .......................................................................... 82
ECOWAS Customs Harmonized System Codes, Tariffs, and Taxes Applicable to Fertilizers ............ 83
Import Process Flow .............................................................................................................................. 84
Estimated Fertilizer Use by Crop (1990-1999) ..................................................................................... 86
Nutrient Removal Factors to Estimate Fertilizer Requirements ............................................................ 87
2017 Fertilizer Subsidy Model of the Planting for Food and Jobs Program ......................................... 88
Fertilizer Allocations by Fertilizer Suppliers Under the PFJ Program (2015-2018) ............................. 89
Packages Provided in 2018 to Farmers per Crop at 50% Subsidy ........................................................ 90
Key Principles and Proposed Actions to Design Smart Fertilizer Subsidy Programs........................... 91
List of Companies/Institutions Met/Interviewed ................................................................................... 95
Ghana Fertilizer Value Chain Optimization Study ii

Figures
Figure 1. Strong Growth of Major Fertilizer Markets in Sub-Saharan Africa .................. 11
Figure 2. FOB Fertilizer Prices – Increasing Steadily Since Mid-2017 ............................ 12
Figure 3. Retail Fertilizer Prices – Not Yet Impacted by the FOB Price Increase ............ 13
Figure 4. Commercial and Subsidized Urea and NPK 15-15-15 Prices (October 2018) .. 14
Figure 5. Evolution of Apparent Fertilizer Consumption in Selected Countries in West
Africa .................................................................................................................. 15
Figure 6. 2017 Fertilizer Imports in Ghana and Breakdown by Type of NPK ................. 16
Figure 7. Country of Origin of Fertilizers Imported in 2017 and Breakdown by Product
Type .................................................................................................................... 16
Figure 8. Ghana Fertilizer Monthly Cumulative Imports (2013-2017) ............................. 17
Figure 9. Crop Calendar for Food Crops ........................................................................... 18
Figure 10. Illustration of the Fertilizer Distribution in Ghana............................................. 18
Figure 11. Estimated Fertilizer Use by Crop and by Product .............................................. 20
Figure 12. FOT Cost of Importing Urea in Ghana (U.S. $/mt) ........................................... 23
Figure 13. Cost Breakdown of GA Storage Beyond FOB Cost .......................................... 25
Figure 14. Cost Breakdown of Distribution to Retail, Beyond GA Storage ....................... 27
Figure 15. Average Cost of Fertilizer in Ghana Across All Regions (Non-Subsidized
Costs) .................................................................................................................. 29
Figure 16. Average Domestic Distribution Cost of Fertilizer Across All Regions as
Negotiated by MoFA Under the Subsidy Program ............................................ 30
Figure 17. Cost of Procuring Subsidized Fertilizers vs. Commercial Distribution ............. 31
Figure 18. Some Results of the Soil Analysis Conducted by IFDC in Northern Ghana
(2017) ................................................................................................................. 37
Figure 19. 2018 Fertilizer Subsidy Model of the Planting for Food and Jobs Program ...... 45
Figure 20. Fertilizer Subsidy Allocation in Ghana per Company (2015-2018) .................. 47
Figure 21. Sample of Subsidy Coupons .............................................................................. 51
Figure 22. MoFA Announcement for Pre-Qualification of Fertilizer Suppliers for the 2019
PFJ Campaign .................................................................................................... 53
Figure 23. Challenges Faced by Actors in the Fertilizer Value Chain ................................ 54
Figure 24. Fertilizer Subsidy Allocations per Type (2015-2018)........................................ 89
Ghana Fertilizer Value Chain Optimization Study iii

Tables
Table 1. Apparent Fertilizer Consumption in Ghana 2013-2017 ..................................... 15
Table 2. Fertilizer Export Trends from 2013-2017 .......................................................... 17
Table 3. Main Fertilizer Importers in 2017 ...................................................................... 19
Table 4. Estimated Distribution of Fertilizer Sales by Regions (1997-2001) .................. 19
Table 5. FOT Cost of Importing Urea in Ghana .............................................................. 22
Table 6. Procurement and Importation Cost of Fertilizer at Greater Accra Storage ........ 24
Table 7. Average Domestic Distribution Cost of Fertilizer in Ghana Across All Regions
............................................................................................................................ 26
Table 8. Cost of Fertilizer Delivery at Retail to All Regions in Ghana ........................... 28
Table 9. Average Domestic Distribution Cost of Fertilizer in Ghana Across All Regions
as Negotiated by MoFA ..................................................................................... 30
Table 10. Impact of FOB Price Increases on GA Costs ..................................................... 32
Table 11. Main Fertilizer Grades Used per Crop in Ghana................................................ 36
Table 12. Current and Potential Blended Fertilizer Consumption ..................................... 37
Table 13. New Fertilizer Recommendations for Maize, Rice, Soybean, and Cassava Based
on Soil Nutrient Maps ........................................................................................ 38
Table 14. Fertilizer Blending Capacity in Ghana ............................................................... 40
Table 15. Subsidized Fertilizer Consumption by Region for 2016-2017........................... 47
Table 16. Target Beneficiaries for PFJ, 2017-2020 ........................................................... 48
Table 17. Estimated Cost of Planting for Food and Jobs Program, 2017-2020 ................. 49
Table 18. Projected Fertilizer Requirement for PFJ Program, 2018-2020 ......................... 49
Table 19. Subsidized vs. Market Prices of Fertilizers from 2008 to 2018 ......................... 50
Table 20. Expected Results for Policy Scenarios .............................................................. 59
Table 21. Proposed Recommendations and Smart Subsidy Principles .............................. 70
Table 22. Eight Measures to Improve the Efficiency of the 2019 PFJ Program ................ 73
Table 23. Priority Measures Recommended for PFJ 2019 ................................................. 76
Table 24. Cultivated Areas and Average Yields of Some Major Crops in Ghana
(2010-2015) ........................................................................................................ 81
Table 25. Ghana 2017 Fertilizer Statistics Summary ......................................................... 81
Table 26. ECOWAS Customs HS Codes, Tariffs, and Taxes Applicable to Fertilizers .... 83
Ghana Fertilizer Value Chain Optimization Study iv

List of Acronyms
ADB Agricultural Development Bank
AEZ Agroecological Zone
AFAP Africa Fertilizer and Agribusiness Partnership
AFFM African Fertilizer Financing Mechanism
AfSIS Africa Soil Information Service
AGR Annual Growth Rate
AGRA Alliance for a Green Revolution in Africa
AGRIS Agriculture and Rural Integrated Survey
B Boron
Ca Calcium
CAN Calcium Ammonium Nitrate
CAPEX Capital Expenditure
CIF Cost, Insurance, and Freight
COCOBOD Ghana Cocoa Board
CSIR Council for Scientific and Industrial Research

DAP Diammonium Phosphate
DCS Directorate of Crop Services (MoFA)
DDA District Department of Agriculture
DSSAT Decision Support System for Agrotechnology Transfer
ECOWAS Economic Community of West African States
EDIF Export Development and Investment Fund
EnGRAIS Feed the Future Enhancing Growth through Regional Agricultural
Input Systems in West Africa
FAO Food and Agriculture Organization of the United Nations
FBO Farmer-Based Organization
FOB Free on Board
FOT Free on Truck
FSP Fertilizer Subsidy Program
GA Greater Accra
GAIDA Ghana Agro-Input Dealers Association
GCNet Ghana Community Network
GCX Ghana Commodity Exchange
GFAC Ghana Fertilizer Advisory Committee
GFEP Ghana Fertilizer Expansion Program
GHS Ghana Cedi
GoG Government of Ghana
GPHA Ghana Ports and Harbours Authority
GRA Ghana Revenue Authority
Ghana Fertilizer Value Chain Optimization Study v

GSARS Global Strategy to improve Agricultural and Rural Statistics
GSFP Ghana School Feeding Programme
GSS Ghana Statistical Services
ha hectare
HDP High-Density Poly
ICT Information and Communications Technology
IFA International Fertilizer Association
IFDC International Fertilizer Development Center
IFPRI International Food Policy Research Institute
ISFM Integrated Soil Fertility Management
IT Information Technology
K Potassium
KeFERT Kenya Fertilizer Platform
kg kilogram
MAP Monoammonium Phosphate
METASIP Medium-Term Agriculture Sector Investment Plan
Mg Magnesium
MoFA Ministry of Food and Agriculture
MOP Muriate of Potash
mt metric ton
mtpd metric tons per day
N Nitrogen
NAFCO National Buffer Stock
NAIP National Agriculture Investment Plan
NFP National Fertilizer Platform
NHIL National Health Insurance Levy
NTT National Task Team
OFRA Optimized Fertilizer Recommendations in Africa
P Phosphorus
PFJ Planting for Food and Jobs Presidential Initiative
PFRD Pesticide and Fertilizer Regulatory Division
PPRSD Plant Protection and Regulatory Services Directorate (MoFA)
RDA Regional Department of Agriculture
S Sulfur
SARI Savanna Agricultural Research Institute
SMaRT Soil testing, Mapping, Recommendations development, and Transfer to
farmers
SME Small and Medium Enterprises
SoA Sulfate of Ammonia
SOP Sulfate of Potash
SRI Soil Research Institute (CSIR)
Ghana Fertilizer Value Chain Optimization Study vi

SRID Statistics Research Information Directorate (MoFA)
SSA Sub-Saharan Africa
SSP Single Superphosphate
TSP Triple Superphosphate
USAID United States Agency for International Development
VAT Value-Added Tax
WAFA West Africa Fertilizer Association
Zn Zinc
Ghana Fertilizer Value Chain Optimization Study vii

Executive Summary
The following Fertilizer Value Chain Optimization Study was commissioned by the
Government of Ghana (GoG), represented by the Ministry of Food and Agriculture (MoFA)
under the GoG’s Ghana Fertilizer Expansion Programme (GFEP). This study includes
extensive data and a thorough analysis of cost buildups, blending, and subsidies for fertilizer
in Ghana and provides guidance on how these and other aspects of the fertilizer value chain
could be optimized to greatly expand the availability and use of appropriate and affordable
fertilizers across the country, particularly by smallholders for food crops, which is the stated
purpose of the MoFA fertilizer subsidy program (FSP).
However, to analyze and recommend proper changes to the Ghana fertilizer value chain, it is
important to understand the current international and regional fertilizer context. The first
aspect to understand is that, in general, international free-on-board (FOB) prices were rising
(+10-30% year-to-year increase for feedstock, +18% for NPK 15-15-15) at the time of data
collection for this study in September 2018, and 2019 prices were affected. There has been a
boon in the development of manufacturing and blending capacity across sub-Saharan Africa
(SSA), particularly in West Africa. An additional 4.7 million metric tons (mt) or more of
(granular) urea will be available soon from Nigeria; the majority will be exported, primarily
outside the continent. Ghana enjoys competitive open market prices, but has the highest
fertilizer subsidy rate (50%) in West Africa, which has created incentives for smuggling to
neighboring countries, where prices are generally higher and subsidy rates are lower.
In terms of the Ghanaian market, 2017 apparent consumption was estimated at 440,000 mt, a
record high. However, 2017 real consumption was much lower at approximately 350,000-
380,000 mt. Official exports are minimal, but a great deal of anecdotal evidence supports
claims of large-scale smuggling of subsidized fertilizer from Ghana to neighboring countries,
especially Burkina Faso, as well as substantial carryover stocks. Half of imports are NPK
fertilizers, mainly compounds, and 20% are urea and raw materials for blending. The GoG
Planting for Food and Jobs (PFJ) Program/MoFA FSP and the Ghana Cocoa Board
(COCOBOD) control 80% of the fertilizer market to serve smallholder farmers who cultivate
food crops/vegetables and cocoa, respectively. The Ghanaian market is mainly served by 10
private importers, most of them well-skilled and financially capable, who blend and/or
distribute through a dense network of 3,500 small, licensed agro-dealers.
In terms of fertilizer cost buildup and procurement processes in Ghana, almost all fertilizers
are imported through the Port of Tema, where the main importers, largest warehouses, and
most blending units are located. No duties or value-added taxes (VAT) are levied on
fertilizers, except for a 5% duty on compounds. Urea arriving at the Port of Tema at a free-
on-board (FOB) price of U.S. $280/mt reaches Greater Accra (GA) warehouses at U.S.
$395/mt bagged, a port cost of U.S. $115/mt, or +41%. This is comparable to port costs at
Dar es Salaam, Tanzania, and cheaper than those for Mombasa. Domestic distribution costs
add 40-45% to free-on-truck (FOT) costs for imported and locally blended fertilizers.
Financial costs are 38% on average and operational costs are 42%, accounting for 80% of the
cost from Greater Accra storage to retail. Analysis shows that FOB price increases of raw
materials increase competitiveness of local blends over imported compounds. Investing in
general (roads and railways) and dedicated infrastructure (priority berths and warehouses)
and fast-tracking import procedures (permits, etc.) would ensure reduced in-country costs for
fertilizers.
Ghana Fertilizer Value Chain Optimization Study viii

In terms of developing the fertilizer (blending) market, depending on which model is used,
the total fertilizer market potential in the next five years ranges between 500,000 and 760,000
mt, unless the sector is enhanced by major policy and technical improvements. Regardless,
blends are expected to represent 50-60% of the total market. Ongoing GoG efforts, including
accurate soil maps, trials, and validation of fertilizer formulations and recommendations,
have begun yielding results that can lead to the development of more suitable crop- and soil-
specific blends. This is the first step toward fully balanced crop nutrition, which requires the
inclusion of micronutrients. The 2019 PFJ introduced eight new blends for maize, rice,
soybean, and cassava to be mostly blended locally. Six blending units, all located in Tema
except one (GloFert), were expected to be in operation by the beginning of the 2019 planting
season. All can blend new formulations in small or large batches. The current installed
capacity can easily serve the current, short-, and at least medium-term market requirements in
Ghana. If the market moves toward more balanced fertilization requiring more complex crop-
and soil-specific formulations, a couple of additional small blending units, requiring small
investments, could have a comparative advantage if located closer to crop production belts
(e.g., Brong-Ahafo and Northern regions).
However, improvements in fertilizer recommendations and the increase in blended products
will have little impact on smallholder farmers growing food crops, unless there are major
changes to improve the effectiveness of the PFJ/MoFA FSP. As noted above, its 50% subsidy
is by far the highest among neighboring countries, and indications are that many smallholder
farmers are either unable to access or unable or unwilling to pay the remaining cost for
subsidized fertilizer. Problems with the administration of the 2015-2018 FSPs included late
solicitations, contracts, and payments to suppliers and deliveries to farmers, poor
productivity/results from commodity standard formula fertilizers, smuggling, limited and
inefficient/ineffective use of the private sector suppliers, difficult GoG requirements for
accessing subsidized fertilizers, poor accounting/voucher/coupons systems, and fake coupons.
Indications are that some of these problems were reduced in the 2019 FSP, but comprehensive
changes are required if the next FSP is to be more successful.
The following actions are recommended to optimize the fertilizer value chain in Ghana.
Almost half the cost of retail fertilizer prices is derived from high, in-country costs, primarily
due to the lack of priority given to fertilizer imports and poor port and transportation
infrastructure. Reasonable priorities and targeted investments in infrastructure important to
fertilizer importation, blending, and local deliveries would lower retail prices. This could start
with improving capacity at the ports for fertilizer berthing and unloading and improving
roads or rail to warehouses and blending operations. Blending capacity in Ghana is already
more than twice what is required, and current blending operations are operating at only 20-
25% of capacity. Therefore, expansion of blending capacity is not needed and doing so would
inevitably drive current local operations out of business, deterring other blenders and
eliminating current employment for hundreds of Ghanaian workers. The issues with the
current MoFA FSP could be eliminated by modifying it to adhere to the validated Regional
Fertilizer Subsidy Program Guide, which will soon be issued by the Economic Community of
West African States (ECOWAS) as a directive. The Guide is built on 13 key principles,
including inclusive participation, specialization, fair competition, efficiency, better targeting,
transparency, timeliness, appropriate and quality products, incentives, complementary inputs,
exit strategy, sustainability, and accountability, with 36 associated activities. Adhering to
these principles and combining them with the associated activities would make the Ghana
FSP a “smart” program that effectively accomplishes its purpose – improving the availability
and use of fertilizers by smallholder farmers in Ghana to ensure greater productivity and food
security.
Ghana Fertilizer Value Chain Optimization Study ix

1. Background
The GoG, represented by MoFA, requested IFDC to complete a Fertilizer Value Chain
Optimization Study under the GFEP. The findings of this study, which includes an update of
the IFDC 2016 Ghana Cost Buildup Study, will help inform the development and
implementation of GFEP by adding key information on a host of elements in the fertilizer value
chain. This will, in turn, help MoFA make better decisions on logistics, procurement, and
pricing under the National Fertilizer Subsidy Program, which was absorbed by the PFJ. Aspects
of this study will also inform the redesign of the subsidy program going forward.
2. Objectives
The objectives of this study are to:
• Describe structure and functioning of the current fertilizer market;
• Assess costs of procuring, blending, and distributing fertilizers to farmers;
• Define the current potential for market growth for fertilizers in general and for new
blends or formulations in particular; and
• Analyze Ghana’s subsidy scheme and offer policy and program changes that will make it
more effective and efficient.
Methodologies and approaches used to address these objectives and conduct this study are
described in the annex.
3. Fertilizer Trade and Consumption in Ghana

3.1 Summary of International and West African Fertilizer Contexts
In SSA, the six main fertilizer markets have recorded a steep increase in fertilizer consumption,
reaching close to 6 million mt in 2017, a record increase of 63% in just two years. This
exceptional growth was sustained by: (i) favorable commodity and fertilizer prices in the global
market; (ii) massive private sector investments in fertilizer production (especially urea
production in Nigeria); installation and refurbishment of blending plants (over 50 blending
units are now operational); extension/outreach programs for smallholder farmers; and
(iii) unprecedented government plans and programs aimed at supplying balanced fertilizers to
more smallholder farmers through more targeted subsidized/public programs (Ethiopia is on
the forefront of this new strategy).
According to the International Fertilizer Association (IFA), the average fertilizer application
rate in SSA is up by an average of 1 kilogram (kg) of nutrient per hectare (ha) per year and will
reach 20 kg/ha by 2021. This translates into 32% relative regional growth, making SSA the
fastest-growing market in the world. Area planted has expanded as well but at a slower pace
than fertilizer application rates. However, SSA represents only 2% of the world demand, with
Ethiopia, South Africa, Nigeria, and Kenya accounting for 50% of the total.
Ghana Fertilizer Value Chain Optimization Study 10

7,000,000
Total consumption (tons)
6,000,000
5,000,000
6 countries
3,472,718 in West
4,000,000
Africa
2,521,833
3,000,000
1,781,555
6 countries
2,000,000 in East
> 800
Africa
2,490,583
1,000,000 1,884,459 1,974,329 200,
- < 20
2015 2016 2017
on (tons)
6 countries
18
in West
Africa
6 countries
in East > 800,000 MT
Africa
83
200,000-450,000 MT
< 200,000 MT
Figure 1. Strong Growth of Major Fertilizer Markets in Sub-Saharan Africa

This impressive picture has been clouded by a sharp increase in the price of most fertilizer
products since the second half of 2018 (urea +17%; diammonium phosphate [DAP] +30%;
TSP +15%; and MOP +10% over the past 12 months), which continues well into 2019.
1400
US$ / ton
Urea (granular, Middle East - FOB bulk)
1200
DAP (Russia Baltic/Black Sea)
MOP (Israe l - FOB bulk)

1000
800
600
400
200
0
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
dle East - FOB bulk)
/Black Sea)
bulk)
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Source: Argus
Figure 2. FOB Fertilizer Prices – Increasing Steadily Since Mid-2017
Although this price increase was not reflected in 2018 retail prices in West Africa, it eventually
will have a significant impact on fertilizer costs and prices, whether fertilizers are used directly
or as feedstock to produce blends locally.

Source: AfricaFertilizer.org
Figure 3. Retail Fertilizer Prices – Not Yet Impacted by the FOB Price Increase
Finally, Ghana has implemented one of the many FSPs in West Africa (Nigeria, Togo, Burkina
Faso, Senegal, Niger, Mali, etc.), with the highest subsidy rate (50%). Consequently, the
program offers farmers the cheapest urea and NPK 15-15-15 in the region, although rent-
seekers and smugglers see an opportunity to supply neighboring countries.

Source: AfricaFertilizer.org
Figure 4. Commercial and Subsidized Urea and NPK 15-15-15 Prices
(October 2018)
3.2 Fertilizer Trade and Consumption in Ghana

Over the 2015-2017 period, fertilizer consumption substantially increased in most of the main
fertilizer markets in West Africa, driven by three main factors: (i) favorable international
commodity and fertilizer prices; (ii) government interventions, including subsidy programs;
and (iii) private sector investments in production, distribution, and marketing of fertilizers.
Although fertilizer imports and use in Ghana have increased substantially since the global oil
and food crisis of 2008, its market is considerably smaller than some other countries in the
region, including Nigeria and Mali.

1,800,000
1,600,000
2015 2016 2017
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Nigeria Mali Ghana Cote d'Ivoire Burkina Faso Senegal
Source: AfricaFertilizer.org, 2018
Figure 5. Evolution of Apparent Fertilizer Consumption in Selected Countries
in West Africa
Most fertilizer importation in Ghana is in response to government FSP requirements (MoFA
for food crops and COCOBOD for cocoa), commercial plantations, and other private farmers.
The reintroduction of government subsidies on fertilizer in 2008 has resulted in at least a
perceived corresponding increase in fertilizer use in Ghana. According to MoFA statistics, the
estimated average annual fertilizer demand in Ghana was previously between 250,000 and
350,000 mt per year. Subsidized fertilizer sponsored by MoFA in support of the food crops
sector has recently absorbed a larger proportion of imported fertilizer; this is attributed to the
simultaneous implementation of two FSPs since 2017: the ongoing MoFA FSP and the subsidy
on fertilizer under the PFJ Presidential Initiative. However, these general figures do not factor
in large quantities of subsidized fertilizer smuggled to mostly contiguous countries.
3.2.1 Apparent Consumption Increased by 50% from 2013 to 2017
According to AfricaFertilizer.org, mainly based on Ghana Statistical Services (GSS) and
customs data,1 apparent consumption2 of fertilizers in Ghana increased from 239,900 mt in
2016 to 440,700 mt in 2017, or about 84% within one year.
Table 1. Apparent Fertilizer Consumption in Ghana 2013-2017
2013 2014 2015 2016 2017
Fertilizer (mt)
NPK 113,812 39,344 137,902 132,632 210,387
Urea 36,104 – 18,253 39,035 88,259
Ammonium sulfate 54,863 6,282 64,015 23,268 43,865
Organic fertilizers 6,465 5,523 7,818 8,747 37,568
TSP 47,173 19,613 32,052 13,802 26,766
MOP 19,801 22,702 18,707 13,842 24,235
Other fertilizers 16,287 10,223 11,077 8,532 9,582
Total 294,505 103,688 289,822 239,858 440,661
Source: AfricaFertilizer.org, 2018.
1
See https://africafertilizer.org/blog-post/2017-fertilizer-statistics-validation-workshop-report-ghana-nigeria/.
2
Apparent consumption = local production + imports – exports – non-fertilizer uses (mainly mining and chemical
industries).

Of the 2017 apparent consumption, 48% were NPK products (mainly compounds), 20% urea,
10% ammonium sulfate, 6% TSP, and 5% MOP, according to AfricaFertilizer.org. The
remaining 11% were other fertilizer products used in blending, including organic fertilizer
products.
Other
fertilizers Other
MOP
2% NPK NPKs
5% NPK 15-15-15
TSP 48% 18%
6% 32%
NPK 21-5-5
Organic 7%
fertilizers
9%
Ammonium
sulphate
10%
NPK 27-6-6
10% NPK 23-10-5 + 3S +
Urea 2MgO + 0.3Zn
NPK 20-10-10
20% 19%
14%

Figure 6. 2017 Fertilizer Imports in Ghana and Breakdown by Type of NPK
Ten countries accounted for 85% of the fertilizer imported into Ghana in 2017. Morocco is
the most important supplier of fertilizers to Ghana, accounting for 17% of the total supply,
100% of TSP, and 22% of the NPKs imported.
Finland Morocco
80,000 100%
90%
70,000
80%
Others
60,000 70%
Estonia
China
Latvia
60%
50,000
Italy
Latvia
Italy
50%
Belgium
40,000 40% China

Libya
30%
Turkey
Estonia
Germany
30,000
20%
Finland
20,000 10%
0% Morocco
10,000
ea
rs
P
OP
K
Or oA
ni
TS
NP
he
mt
Ur
S
ga
-
Ot
Figure 7. Country of Origin of Fertilizers Imported in 2017 and Breakdown by

Product Type
According to official statistics, only 3,575 mt of fertilizers were officially exported from Ghana
to neighboring countries, mainly Burkina Faso and Togo.

Table 2. Fertilizer Export Trends from 2013-2017
2013 2014 2015 2016 2017
Fertilizer (mt)
NPK 3,235 5,536 238 – 3,500
Urea – 339 95 – –
TSP – 1,645 – – –
Other fertilizers 248 – – 25 75
Total 3,483 7,520 333 25 3,575
3.2.2 Improvement in Timing of Imports

Most fertilizers imported to Ghana reach the port between the first and third quarters. Fertilizers
imported in the last quarter are mostly used in the following year.
In 2017, 87% of the total quantity of fertilizers was imported into Ghana by the end of the
second quarter, i.e., in time for the main planting season (see crop calendar below), with a peak
in June of over 129,000 mt imported (vs. 81% in 2016, 57% in 2015, 60% in 2014, and 55%
in 2013).
500,000
450,000
400,000
350,000 2013
300,000
2014
250,000
2015
200,000
2016
150,000
2017
100,000
50,000
-
mt Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Figure 8. Ghana Fertilizer Monthly Cumulative Imports (2013-2017)

SEASON CROPS Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cassava(1st year) u u u
Cassava(2nd year)
Maize(North main*) u u u
Major Season Maize(South main*) u u u
(Long Rains) Sorghum & Millet u u u u
Rice(North) u u u u
Rice(South) u u u
Yams u u u u
Minor Season Cassava, Maize, Millet,
u u u
(Short Rains) Sorghum, Rice, Yams
Source: IFDC, adapted from FAO/GIEWS Key: u Fertilizer Peak Demand Sowing Growing Harvesting
Figure 9. Crop Calendar for Food Crops
3.2.3 Structure of Fertilizer Distribution in Ghana

Figure 10 illustrates the flow of fertilizer from importers to farmers. This structure is partially
influenced by the setup that resulted from the private-public partnerships for both of the
government subsidy programs.
International Fertilizer Suppliers
Importers (with blending units )
Yara Chemico AMG AFCOT OmniFert MacroFertil Others

19% 19% 17% 11% 7% 6% 11%
20% 10% 60%

10%
COCOBOD Agribusinesses MoFA Subsidy Program
(cocoa) (fruits, rubber, oil palm) + PFJ (food crops)
Distributors/
Outlets
Licensed
Agro-Dealers
Retailers
Out-Growers/Small-Scale Farmers Small-Scale Farmers

Cocoa Farmers
(maize, cotton, oil palm, rubber, sugar) (food crops, vegetables)
Figure 10. Illustration of the Fertilizer Distribution in Ghana
In 2017, 10 importers accounted for almost all of the fertilizers imported into Ghana (98%),
supplying 35 to 50 large distributors and a dense network of more than 3,500 retail shops

across the country. A more detailed description of the various players in the supply chain can
be found in the annex.
Table 3. Main Fertilizer Importers in 2017

Volume
Importers Main Types of Fertilizers (mt) %
Chemico SoA, DAP, MOP, NPK, SOP, TSP, urea 84,219 19%
Yara Ghana SoA, CAN, MAP, MOP, NPK, P rock, SOP, TSP, urea 84,195 19%
AMG SoA, NPK 74,313 17%
Afcott SoA, NPK, urea 48,844 11%
Ghana COCOBOD SoA, NPK, organic fertilizers 45,126 10%
Omnifert SoA, DAP, MAP, MOP, SOP, urea 32,190 7%
Macrofertil SoA, CAN, MAP, MOP, NPK, P nitrate, SOP, urea 24,838 6%
Agricult Ghana NPK, organic fertilizers, urea 20,130 5%
RMG NPK, urea 16,671 4%
ETC Agro Urea 2,935 1%
Jubaili Agrotec MOP 2,896 1%
Other 7,878 2%
Total 444,236 100%
3.3 Fertilizer Consumption per Crop

The lack of detailed data from official sources, such as GSS or the Statistics Research
Information Directorate (SRID), and the lack of sales records at the retail level make it very
difficult to assess the actual fertilizer use by crop and by product at the national level.
As a reference, the Food and Agriculture Organization of the United Nations (FAO) published
a report3 in 2005 on fertilizer use by crop in Ghana. The report was prepared in collaboration
with the Land and Plant Nutrition Management Service’s Land and Water Development
Division. Table 4 provides estimates of fertilizer use by region in the late 1990s, which can be
used as an indication of today’s geographical distribution.
Table 4. Estimated Distribution of Fertilizer Sales by Regions (1997-2001)

1997 1998 1999 2000 2001
Region (mt)
Ashanti 5,167 3,893 2,023 4,046 7,438
Brong-Ahafo 7,582 5,712 2,969 5,937 10,914
Central 1,629 1,229 638 1,275 2,345
Eastern 1,011 762 396 792 1,455
Greater Accra 1,236 931 484 967 1,779
Northern 15,220 11,467 5,960 11,917 21,910
Upper Regions 15,501 11,679 6,070 12,137 22,314
Volta 8,481 6,390 3,321 6,640 12,208
Western 337 254 132 264 483
Total 56,164 42,317 16,593 43,975 80,846
In 2014, IFDC commissioned a study with SRID, GSS, and the Ghana Agro-Input Dealers’
Association (GAIDA) to reassess fertilizer consumption and fertilizer use by crop in Ghana,
3
See http://www.fao.org/tempref/agl/agll/docs/fertuseghana.pdf.

but the team could not accomplish this objective due to the unavailability of reliable data. Key
recommendations from the study included the addition of fertilizers to the Multi-Round Annual
Crop and Livestock Surveys conducted by SRID and investment in financial and human
resources by MoFA in SRID and in District Agricultural and Extension Offices.
In the absence of detailed data, the team used available fertilizer consumption statistics,
allocated by product and region by the MoFA subsidy programs, and sales estimates for other
crop segments (cocoa, agribusiness) to estimate the current fertilizer use by crop as shown in
Figure 11.
Figure 11. Estimated Fertilizer Use by Crop and by Product
The pilot Agriculture and Rural Integrated Survey (AGRIS) in Ghana was launched in January
2018 as part of the FAO Global Strategy to improve Agricultural and Rural Statistics (GSARS).
The pilot was conducted in four selected districts of the Ashanti Region in Ghana, in
collaboration with GSS and MoFA. If and when the pilot is extended to the entire country, it
should provide accurate and reliable data needed to estimate fertilizer use by crop. Meanwhile,
IFDC recommends that a standalone study on fertilizer use by crop be conducted as soon as
possible, ahead of the 2020 planting season (ideally before September 2019).
4. Fertilizer Procurement Processes and Cost Buildup in

Ghana
4.1 Fertilizer Import Procedures
4.1.1 Import Clearance Process
Customs Act 2015, Act 891, Section 43 directs all importers, except “Self-Declarants,” to
engage the services of licensed Customs House Agents (freight forwarders) for the clearance
of cargo at any freight station in Ghana.
The importation clearance process4 comprises the following:
• Declaration of cargo onto the Ghana Community Network (GCNet);5
• Customs document verification, system validation, cargo classification and valuation, risk
assessment and quality assurance, payment of duty, and cargo verification;
4
See https://www.ghanaports.gov.gh/page/25/Port-Processes.
5
GCNet: https://giccs.gcnetghana.com/giccs/jsf/login/GICCSLoginpage.jsf.

• Release of cargo by the shipping agent;
o Delivery by the port and other receipt delivery service providers; and
o Customs physical examination or scanning of cargo before it can exit the port.
A detailed port clearance flow/roadmap is available online.6 The process follows existing GoG
and port authority rules and regulations. The annex provides more details on the import
processes.
4.1.2 Duties and VAT

Although most imported fertilizer does not incur VAT, it does incur other levies. Single
nutrient products, such as urea, TSP, and MOP, typically used for blended formulations
demanded for certain crops and climatic conditions (e.g., blended fertilizer formula for the
cocoa sector), do not incur VAT or import duties. However, NPK compound products, such as
NPK 15-15-15, incur an import duty of 5%.
4.2 Fertilizer Supply Cost Buildup

This section presents the fertilizer supply cost buildup in Ghana, based largely on data and
information gathered during field work in the country. Tables 5 and 6 and Figures 12 and 13
present the fertilizer supply cost buildup estimations from procurement to storage facilities
within the Tema and Greater Accra areas for six fertilizer products:
1. Urea;
2. TSP;
3. MOP;
4. NPK compounds (NPK 15-15-15); and
5. NPK blended formulations (NPK 15-15-15 and NPK 23-10-5).
The reason for differentiating NPK products as formulations and blended products is to
compare the costs of imported compound formulations versus the same blended formulations
manufactured from imported straight nutrient products.
4.2.1 Costs of Importing Fertilizers through the Port of Tema

Although Ghana has two ports (Tema and Takoradi) with good connections to the road network
and other logistics, the vast majority of fertilizer is imported through Tema. Table 5 illustrates
the cost of urea importation, FOT at port (Tema). Considering that fertilizer importation
experiences economies of scale, import estimations per metric ton are based on a 15,000-mt
vessel and four-month average international market FOB prices and international freight,
according to Argus Media, assuming the nearest source for procuring the products in relation
to Ghana.
6
See https://www.ghanaports.gov.gh/Files/TEMAPORT/PaperlessRoadMap.pdf.

Table 5. FOT Cost of Importing Urea in Ghana
Importer Costs and Charges U.S. $/mt GHS/mt FOT Bulk FOT Bagged
A FOB 279.40 1,341.10 74.8% 70.5%
1 Vessel freight 24.00 115.20
2 Freight insurance 1.70 8.00
B Cost, insurance, and freight (CIF) 305.10 1,464.30 81.7% 77.0%
3 Import duty – –
4 Value-added tax (VAT) – –
5 Customs processing fee 3.10 14.60
6 NHIL 7.60 36.60
7 EDIF 1.50 7.30
8 ECOWAS levy 1.50 7.30
9 GCNet 1.30 6.30
10 EXIM levy 2.30 11.00
11 African Union levy 0.60 2.90
12 IRS charges – –
13 Inspection fee (PPRSD) 3.10 14.60
C Total taxes, tariffs, and levies 21.00 100.80 5.6% 5.3%
14 Port dues per vessel 1.20 5.90
15 Plant quarantine 0.10 0.50
16 Stevedoring 34.00 163.20
17 Port dues per mt 4.00 19.20
D Total port charges 39.30 188.70 10.5% 9.9%
18 Shipping admin and handling charges 1.00 1.00
E Shipping charges 1.00 1.00 0.1% 0.1%
19 Documentation 0.10 0.50
20 Forwarder admin charges 1.00 4.80
21 Forwarder clearing charges 3.50 16.80
22 Other contingencies 0.50 2.20
F Total forwarder charges 5.10 23.80 1.3% 1.3%
G FOT cost Tema in bulk 371.40 1,793.30 100.0% 94.2%
23 Bagging operations per mt 12.00 57.60
24 Poly-sacks 10.80 51.80
H Bagging charges 22.80 109.40 5.8%
I Total FOT bagged at port 394.20 1,902.70 100.0%
Note: GHS to U.S. $ assumed exchange rate is GHS 4.8/U.S. $, three-month average, up to September 2018.

Table Notes
A FOB price is a four-month (June through September 2018) average international bulk price of urea,
at Baltic/Morocco/Black Sea in U.S. $/mt (Argus).
1 International freight was estimated based on Argus freight reports for the months of September 2018
between Baltic/Morocco/Black Sea-Tema in U.S. $/mt for a vessel between 15,000 to 30,000 mt.
2 Freight insurance is estimated at 0.6% of FOB value of the good plus shipping charges, according
to: http://www.priorityworldwide.com/resources/cargo_insurance_guidelines.aspx.
3-4 There is no import duty or VAT for single nutrient products, such as urea.
5 Customs processing fee.
6 National Health Insurance Levy (NHIL) is imposed on all imports at a rate of 2.5% of CIF.
7 Export Development and Investment Fund (EDIF) is a levy charged to all imports at a rate of 0.5%
of CIF.
8 The ECOWAS levy charge is imposed on all imports at a rate of 0.5% of CIF.
9 GCNet Services Limited is a duty on imports at a rate of 0.4% of FOB, to support a public-private
partnership investment in electronic infrastructure and development of an electronic “one-stop
shop/single window” to facilitate trade. This tax includes 15% VAT + 2.5% NHIL on the GCNet
0.4% of FOB for a GCNet effective tax rate of 0.47%.
10 EXIM levy is at a rate of 0.75% of CIF.
11 African Union levy is imposed at 0.2% of CIF.
12 Inspection fee charges are 1% of CIF.
14 Port charge per vessel is a flat charge of U.S. $6,103/vessel (estimated), which includes berth
occupancy, pilotage charges, towage, and mooring/unmooring.
15 Quarantine is another fixed charge based on product weight at a rate of 1% of CIF.
14 Stevedoring charges are labor charges estimated at $34/mt for unloading the vessel, according to the
Tema Port Customers Guide. This includes crane operation for dry bulk cargo, cargo handling, bulk
in-bag out (BIBO) operation, documentation, and shore handling.
16 Port charges per metric ton are estimated at $4/mt, according to the Tema Port Customers Guide.
18-22 Freight forwarder charges are self-descriptive.
23-24 Bagging operation at port is estimated considering equipment rental and poly-sacks only.
72% 7% 5% 10% 2% 6%
0 50 100 150 200 250 300 350 400 450

U.S. $/mt
FOB (bulk) CIF

Total taxes, tariffs and levies Total port charges
Total shipping and forwarding charges Bagging charges
Figure 12. FOT Cost of Importing Urea in Ghana (U.S. $/mt)
The cost increase for NPK compound fertilizer formulations (15-15-15 compound in this case)
relative to CIF is higher than for single nutrient fertilizers, considering that it has a 5% import
duty on CIF, increasing the cost by U.S. $99.80 FOT-Tema relative to CIF (or between
U.S. $10 and $14 relative to single nutrient products). Blended NPK 15-15-15 has a higher cost

since it is the result of blending imported single nutrient products and has the added cost of
blending. Table 6 shows the cost of procurement and importation of various fertilizer products
placed at a Greater Accra (GA) warehouse.
Table 6. Procurement and Importation Cost of Fertilizer at Greater Accra

Storage
NPK NPK NPK
15-15-15 15-15-15 23-10-5
Urea TSP MOP Kieserite Compound Blend Blend
Cost Items (U.S. $/mt)
A FOB 279.40 342.60 275.90 70.00 263.90 280.60 252.40
1 Vessel freight 24.00 21.00 28.00 21.00 36.00 23.70 23.10
2 Freight insurance 1.70 2.10 1.70 0.40 1.60 1.70 1.50
B CIF 305.10 365.70 305.60 91.40 301.50 306.00 277.00
3 Taxes, tariffs, and levies 17.90 21.50 17.90 5.30 32.70 18.00 16.30
4 Port charges per mt (Tema) 39.30 39.30 39.30 39.30 39.30 39.30 39.30
5 Forwarder/clearing charges 5.10 5.10 5.10 5.10 5.10 5.10 5.10
6 Shipping charges 1.00 1.00 1.00 1.00 1.00 1.00 1.00
7 Customs inspection and 3.10 3.70 3.10 0.90 3.00 3.10 2.80
processing fees
8 Blending 12.00 12.00
9 Bagging/bags 22.80 22.80 22.80 22.80
10 Transport charges to local 7.90 7.90 7.90 7.90 7.90 7.90 7.90
warehouse (GA)
11 Storage cost in the GA region 25.50 25.50 25.50 25.50 25.50 25.50 25.50
(3 months)
12 Importer financial/operational 61.70 68.40 58.80 24.80 63.10 59.90 55.80
cost of capital
13 Other importation cost 14.30 15.70 13.50 5.90 14.60 14.70 13.70
C Total cost U.S. $/mt at 503.60 553.70 477.70 207.10 516.50 515.20 479.10
Greater Accra (GA) storage
Cost per 50-kg bag in U.S. $ 25.20 25.80 25.80 24.00
Cost per 50-kg bag in GHS 120.90 124.00 123.70 115.00
Table Notes
Descriptions of rows 1 through 8 are the same as in Table 1.
9 Blending cost is estimated at U.S. $12/mt, according to interviewed importers and blenders.
10 Bags and bagging charges assume the operation takes place at port and include bagging equipment,
bags, and liner. NPK compound formulation is assumed to be procured already bagged, therefore having
no bagging charges, while NPK 15-15-15 is blended and bagged at a blending facility.
11 Transport charges are for moving the cargo within the GA area from port to importer main storage and
include loading and unloading.
12 Cost of storage/mt in the GA area is estimated at U.S. $8.5/mt/month, according to survey, for up to
three months.
13 Importers’ financial cost of capital is the annualized interest rate/opportunity cost of 24% (average of
22% to 25% range) on loan for up to six months/mt and includes 4% charges on Letter of Credit.
14 Other importer costs include importer operational cost, assumed to be 10% of procurement and
importation of fertilizer, for four months.
NPK blends are blended formulations based on the imported single nutrient fertilizer (urea, TSP, and MOP).
Fertilizer procurement and importation at the GA region storage increases by 35%, on average,
relative to the FOT-Tema cost, or an overall average cost increase of 65% relative to CIF across
all products considered in the analysis. The 35% cost increase is absorbed by the storage cost
in the GA region and by the financial cost of capital for procuring and importing fertilizer

placed at the GA region storage, contributing 13.4 and 13.3%, respectively, to the 35% cost
increase, with the 8.3% difference covering importer operational cost and local transportation
within the GA region. Figure 13 is a graphical representation of the cost of fertilizer delivered
at the GA storage, beyond FOB cost.
NPK 23-10-5 Blend 25% 9% 24% 17% 11% 14%
NPK 15-15-15 Blend 26% 9% 23%% 17% 11% 14%
NPK 15-15-15 Compound 27% 16% 9% 17% 11% 20%
MOP 29% 11% 9% 19% 13% 19%
TSP 32% 12% 10% 19% 12% 15%
Urea 28% 10% 19% 18% 11% 15%
U.S. $/mt 0 50 100 150 200 250

Financial cost Taxes and tariffs Operational costs
Port charges Storage cost Transportation costs
Figure 13. Cost Breakdown of GA Storage Beyond FOB Cost
Figure Notes
Port charges include port charges at destination port (Tema in this case) according to the port charges
schedule, bagging, and forwarder/inspection charges.
Transportation costs are the charges for moving/transporting the products from country of origin to retail
point, including international freight, freight insurance, domestic transport among different stages along the
supply chain, and truck loading/unloading.
Taxes and tariffs include official tariffs, taxes, and levies from procurement to retail.
Financial costs are the cumulative costs of working capital, including other financial charges or opportunity
costs of capital for importation, procurement, distribution, and retail.
Operational costs are known costs associated with the operation of supplying fertilizer, from procurement
and importation to retail.
According to results of the survey, cost of storage/mt in the GA area is estimated at U.S. $8.5/mt/month, for
up to three months.

4.2.2 Domestic Distribution Costs
Table 7 presents the estimated domestic distribution cost of various fertilizer products after
procurement and importation at the GA storage facilities. These estimates are non-weighted
averages across different regions in Ghana.
According to Table 7 and Figure 14, fertilizer supply experiences the largest cost increase
through the domestic distribution chain. Of the total domestic supply cost, about 40% is
absorbed by the cost of doing business at the wholesale/distributor and retail levels, which
includes profit margins and the commissions paid for the distribution of fertilizer; 39% is the
cost of financing working capital, 15% is absorbed by transportation cost, and 6% is absorbed
by storage.
Table 7. Average Domestic Distribution Cost of Fertilizer in Ghana Across All

Regions
NPK NPK NPK
15-15-15 15-15-15 23-10-5
Urea TSP MOP Compound Blend Blend
A Cost per mt of fertilizer in GA 503.60 553.70 477.70 516.50 515.20 479.10
storage facility
1 Transport charges to 28.00 28.00 28.00 28.00 28.00 28.00
regional/wholesale storage
2 Unloading truck at 2.10 2.10 2.10 2.10 2.10 2.10
3 Regional/wholesale storage cost 6.70 6.70 6.70 6.70 6.70 6.70
4 Other costs at wholesale 27.00 29.50 25.70 27.70 27.60 25.80
B Cost at regional/wholesale storage 567.40 620.00 540.20 581.00 579.60 541.70
5 Financial/opportunity cost of capital 36.90 40.30 35.10 37.80 37.70 35.20
at wholesale
6 Sales commission to wholesale 18.20 18.20 18.20 18.20 18.20 18.20
C Total fertilizer cost at regional 622.50 678.60 593.50 637.00 635.50 595.10
storage/distribution
distribution/retail store
8 Other costs at retail 33.40 36.30 32.00 32.70 35.60 32.60
9 Financial operational cost of capital 45.60 49.60 43.70 44.60 48.70 44.50
at retail
10 Sales commission to retailer 14.10 14.10 14.10 14.10 14.10 14.10
D Total cost U.S. $/mt at retail 724.20 787.10 691.80 736.90 742.40 694.80
Cost to farmers at retail point per 36.20 36.80 37.10 34.70
50-kg bag in U.S. $
Cost to farmers at retail point per 173.80 176.90 178.20 166.70
50-kg bag in GHS

Table Notes
1 Transport charges are the average transportation cost to warehouses in the different regions in Ghana
(Greater Accra, Lower and Upper Volta, Eastern, Western, Central, Ashanti, Brong-Ahafo, Northern,
Upper West, and Upper East), according to survey.
2 Lift-on/lift-off (Lo/Lo) is the cost of loading and unloading (load-off) at the regional warehouses.
3 Storage cost is the cost of storage at the regional/wholesale facilities.
4 Other costs at wholesale are assumed to be 15% of the fertilizer cost to cover operational expenses at
the regional/wholesale facilities.
5 Financial/opportunity cost of working capital is the cost of capital at a domestic bank (28% per year
average) for three months. Importers may provide one month or 30 days of free financing to selected
wholesalers.
6 Sales commission to wholesaler/distributor is GHS 4/50-kg bag sold or delivered to retailers, as allowed
by the MoFA-importer retail/market price negotiations.
7 Transport charges from distributor/wholesaler storage to retailer are at a rate of about GHS 1.75/50-kg
bag within a 100 km radius.
8 Other costs at retail are assumed to be 15% of the fertilizer cost to cover operational expenses at retail.
9 Financial/opportunity cost of working capital is the cost of capital at a domestic bank (28% per year
average) for three months. Wholesalers may offer one month or 30 days of free financing to selected
retailers, although this is not common.
10 Sales commission at retail is GHS 3/50-kg bag sold at retail to farmers, as allowed by the MoFA-
importer retail/market price negotiations.
Figure 14 is a graphical representation of the average cost breakdown of fertilizer from GA

storage to retail.
NPK 23-10-5 Blend 37% 42% 18% 3%
NPK 15-15-15 Blend 38% 42% 17% 3%
NPK 15-15-15
37% 42% 18% 3%
Compound
Fertilizer products
MOP 37% 42% 18% 3%
TSP 39% 42% 17% 3%
Urea 37% 42% 18% 3%
U.S. $/mt 0 50 100 150 200 250
Financial cost Operational costs Transportation costs Storage cost
Figure 14. Cost Breakdown of Distribution to Retail, Beyond GA Storage

Figure Notes
Transportation costs are the charges for moving/transporting the products from the country of origin to the
retail point, including international freight, freight insurance, domestic transport among different stages
along the supply chain, and truck loading/unloading.
Financial costs are the cumulative cost of working capital, including other financial charges or opportunity
costs of capital for importation, procurement, distribution, and retail.
Operational costs are known costs associated with the operation of supplying fertilizer, from procurement
and importation to retail.
Within the domestic distribution network, fertilizer products experience the largest cost
increase when delivered to the furthermost northern areas. These increases are due mainly to
higher financial, operational, and transportation costs of distributors and retailers. Operational
costs include higher sales commissions to wholesalers and retailers in an effort to incentivize
the delivery of products to remote areas within the northern regions. The high transportation
cost is justified based on the higher fuel cost and poor road conditions, especially in the
remote areas of the northern regions, leading to frequent equipment breakdown, repairs, and
spare parts costs. Furthermore, in the Tema-Tamale and other northern regional corridors,
there are multiple weight bridges and police checkpoints that cause additional delays, and
some of the latter may demand unofficial payments, contributing to the cost increase. Table 8
presents the estimated costs at retail in the different regions across Ghana.
Table 8. Cost of Fertilizer Delivery at Retail to All Regions in Ghana

NPK NPK NPK
15-15-15 15-15-15 23-10-5
Region Urea Compound Blend Blend
Cost per 50-kg bag U.S. $ GHS U.S. $ GHS U.S. $ GHS U.S. $ GHS
Greater Accra 36.70 176 35.90 172 39.20 188 35.70 171
Ashanti, Eastern, and Central 37.40 180 36.60 176 39.90 191 36.40 175
Western 37.20 179 36.40 175 39.70 190 36.20 174
Brong-Ahafo and Lower Volta 37.90 182 37.10 178 40.30 194 36.90 177
Upper Volta 37.30 179 36.50 175 39.80 191 36.40 175
Upper Northern 39.20 188 38.40 184 41.70 200 38.30 184
Upper West 39.20 188 38.40 184 41.70 200 38.30 184
Upper East 39.70 191 38.90 187 42.20 203 38.80 186
Source: Author estimations.
* NPK Blends are blended formulations based on the imported single nutrient fertilizer (urea, TSP, and MOP).

Finally, Figure 15 illustrates the cost breakdown of fertilizer from procurement to retail in
Ghana.
NPK 23-10-5 Blend 36% 6% 10% 3% 5% 19% 21%
NPK 15-15-15 10% 3% 4% 20%

38% 5% 20%,
Blend
NPK 15-15-15
37% 6% 12% 5% 5% 20% 16%
Compound
Fertilizer products
MOP 40% 6% 11% 3% 5% 20% 16%
TSP 44% 5% 9% 3% 4% 20% 15%
Urea 39% 5% 10% 3% 4% 20% 19%
USD/MT
0 100 200 300 400 500 600 700 800
FOB Port charges Transportation costs Taxes and tariffs Storage cost Financial cost Operational costs
Figure 15. Average Cost of Fertilizer in Ghana Across All Regions

(Non-Subsidized Costs)
4.2.3 Subsidized Fertilizer Cost Estimation

This section estimates fertilizer cost under the subsidy program. As previously explained, for
the purposes of the program, retail subsidized prices are determined by MoFA by means of
negotiation with importers.
The negotiated prices take into consideration the cost for importers to make fertilizer
available at least to regional warehouses, but they may not take into consideration all of the
transaction costs incurred by the domestic distribution network to make fertilizer available to
farmers when and where it is needed, considering that, presumably, there is no representation
from the domestic distribution network in the price negotiation.
This assertion is based on the fact that in the price negotiation, there is a predetermined
allocation in Ghana cedis that is expected to be shared by the different players along the
domestic supply chain beyond importation. This allocation may not be enough to cover all
transaction costs for domestic supply, especially the cost of capital and other operational
costs.
It is important to clarify that the presented cost estimation does not reflect the actual cost
used by MoFA to negotiate market prices to determine the subsidy rate with importers and
blenders to retail. This negotiation takes into consideration transportation costs along the
supply chain to retail and a predetermined margin, which is to be shared by wholesalers,
distributors, and retailers. These cost estimations do not take into consideration the cost of
financing (or opportunity cost of financing if own finance is used, which is typically the case
at distribution and retail) and the operational cost at each stage of the domestic supply chain.
According to importers and MoFA price negotiations, these costs are expected to be covered
by the predetermined margin allowance, which may not be enough for domestic suppliers to
cover all financial and operational costs.
Table 9 presents the cost estimation of supplying fertilizer under the subsidy program across
all regions, as negotiated by MoFA with importers and blenders, considering that not all

transaction costs incurred by the domestic distribution network to make fertilizer available to
farmers are factored into the MoFA-importers negotiated price.
Table 9. Average Domestic Distribution Cost of Fertilizer in Ghana Across All

Regions as Negotiated by MoFA
NPK NPK NPK
15-15-15 15-15-15 23-10-5
Urea TSP MOP Compound Blend Blend
A Cost per mt of fertilizer in GA 503.60 553.70 477.70 516.50 515.20 479.10
storage facility
2 Unloading truck at 2.10 2.10 2.10 2.10 2.10 2.10
3 Regional/wholesale storage cost 6.70 6.70 6.70 6.70 6.70 6.70
B Cost at distributor 540.40 590.50 514.50 553.30 552.00 515.90
4 Sales commission to wholesale 18.20 18.20 18.20 18.20 18.20 18.20
C Total fertilizer cost at regional 558.60 608.70 532.70 571.60 570.30 534.10
storage/distribution
5 Transport charges to retail store 8.50 8.50 8.50 8.50 8.50 8.50
6 Sales commission to retailer 14.10 14.10 14.10 14.10 14.10 14.10
D Total cost U.S. $/mt at retail 581.20 631.30 555.30 594.20 592.90 556.70
Cost to farmers at retail point per 29.10 31.60 27.80 29.70 29.60 27.80
50-kg bag in U.S. $
Cost to farmers at retail point per 139.50 151.50 133.30 142.60 142.30 133.60
50-kg bag in GHS
* NPK Blends are blended formulation based on the imported single nutrient fertilizer (urea, TSP, and MOP).
NPK 23-10-5 Blend 45% 7% 13% 4% 6% 10% 15%
NPK 15-15-15 Blend 47% 7% 12% 4%, 5% 10% 15%,
NPK 15-15-15
44% 7% 14% 6% 5% 11% 13%
Compound
MOP 50% 7% 14% 4% 6% 11% 9%

Fertilizer product
TSP 54% 6% 11% 4% 5% 11% 8%
Urea 48% 7% 12% 4% 6% 11% 13%
USD/T 0 100 200 300 400 500 600 700
FOB Port charges Transportation costs Taxes and tariffs Storage cost Financial cost Operational costs
Figure 16. Average Domestic Distribution Cost of Fertilizer Across All Regions
as Negotiated by MoFA Under the Subsidy Program
On average across all products and delivery regions in Ghana, the cost estimates used for price
negotiation between MoFA and importers are about 20% lower than the full market cost
estimates presented in this assessment, which also consider the opportunity cost of financing
and operational costs.

Theoretically, there is enough margin to sustain the interest of participants in subsequent
programs. The implementation of the fertilizer subsidy program helps to counterbalance the
additional cost on fertilizers.7
4.2.4 Cost of Procuring Subsidized Fertilizer vs. Commercial Distribution
4.2.4.1 Current Cost Allocation Rules May Undermine the Local Distribution
Network
Simulation results show that the cost of importing and distributing non-subsidized fertilizer is
not the same as subsidized fertilizer. According to these estimations, the cost to farmers, or
the MoFA-importers negotiated retail price expected to be paid by farmers for non-subsidized
fertilizer, is lower than the estimated cost of supplying it and much lower to farmer
beneficiaries of the fertilizer subsidy program. This implies that the MoFA-importer
negotiated prices may not cover all of the costs incurred by traders along the domestic supply
chain.
subsidized NPK blend
NPK 15-15-15 Blend
subsidized NPK compound
NPK 15-15-15 Compound
Subsidized urea
Urea
- 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0
FOB Taxes and tariffs Port cost Storage cost

Transportation costs Financial cost Operational costs
Figure 17. Cost of Procuring Subsidized Fertilizers vs. Commercial Distribution
MoFA negotiates market prices to retail with importers and blenders to determine the subsidy
rate. This negotiation takes into consideration transportation costs along the supply chain to
retail and a predetermined margin, which is to be shared by wholesalers, distributors, and
retailers. These cost estimations do not take into consideration the cost of financing (or the
opportunity cost of financing if own finance is used, which is typically the case at distribution
and retail) and the operational cost at each stage of the domestic supply chain beyond GA
storage. According to reports from importer/MoFA price negotiations, these costs are expected
to be covered by the predetermined margin allowance of the negotiated prices, which may not
be enough for domestic suppliers to cover all financial and operational costs.
When comparing the cost of supplying fertilizer under open market conditions (i.e.,
considering all costs along the supply chain) with the cost of supplying it under the subsidy
program, the domestic cost under open market conditions was found to be higher than under
7
Mulholland, Sean. 07 July 2017. “Is 2017 a turning point for West African fertilizer demand?”
https://www.crugroup.com/knowledge-and-insights/spotlights/is-2017-a-turning-point-for-west-african-
fertilizer-demand/.

the subsidized market. Under open market conditions (Figure 17), FOB absorbs a smaller
proportion and domestic cost a larger proportion of the total cost at retail; however, under the
subsidy program, domestic cost absorbs a larger proportion, relative to open market conditions,
of the total cost at retail. That differential between the two cost estimations, according to
discussions with importers and government officials, is due to MoFA-importer negotiations,
which do not factor in all actual costs incurred by the players along the domestic supply chain,
but they allocate a fixed margin beyond cost at the GA facilities (in Ghana cedis) to be shared
among distributors/wholesalers and retailers.
The task of developing the distribution network down to the farmer has been left to the weak
existing distribution network, national investors, and small rural entrepreneurs who, in addition
to low profits, are facing adverse macroeconomic conditions like volatile exchange
rates/devaluations, high interest rates, lack of credit, and logistics infrastructural constraints. In
addition, higher competition at retail makes it harder for businesses to survive, considering the
narrow margin previously set by the importers and MoFA, which is expected to cover all the
retailer costs of storage, administrative costs, risks, and profits in compensation for their
entrepreneurial efforts. This margin is not an incentive for retailers to expand their business or
for new ones to enter the market.
4.2.4.2 FOB Price Increases May Stimulate the Local Blending Industry
Table 10 presents a simulation of the cost buildup at the GA storage facilities for blends, urea,
and 15-15-15 compound under two scenarios: (1) considering three-month average FOB prices
and (2) with an increase in FOB prices. Fertilizer prices in the international market are expected
to continue increasing in the foreseeable future.
Table 10. Impact of FOB Price Increases on GA Costs

Imported and Bagged in Ghana Blended and Bagged in Ghana
NPK NPK NPK NPK NPK NPK
Urea TSP MOP 15-15-15 15-15-15 23-10-5 25-10-10 20-10-10 17-10-10
(U.S. $/mt)
FOB (Jun-Aug av. 2018) 279 343 276 264 281 252 279 256 242
CIF 305 366 306 301 306 277 304 281 267
Cost Greater Accra 503 553 477 490 514 478 513 483 465
storage facility
Cost GHS per 50-kg bag 121 118 123 115 123 116 112
FOB (Oct 2018) 301 361 285 300 296 268 296 271 256
CIF 327 384 315 338 321 293 322 296 281
Cost Greater Accra 528 575 487 533 533 496 533 500 481
storage facility
Cost GHS per 50-kg bag 127 128 128 119 128 120 115
FOB cost variation 8% 5% 3% 14% 6% 6% 6% 6% 6%
GA storage cost variation 5% 4% 2% 9% 4% 4% 4% 4% 4%
Based on the simulations presented in Table 10, as fertilizer FOB prices increase, the cost of
NPK compounds and feedstock fertilizer product for blends will continue to increase as well;
however, the use of blends can serve as a buffer to prevent such cost increases from being
passed on to the domestic distribution network and to farmers.
Based on estimates presented in Table 10, using NPK 15-15-15 as benchmark, a 14% increase
in FOB price will result in a further cost increase of 9% at GA storage for a total cost increase
of 23%. However, this 23% increase at GA storage can be reduced to 10%, on average, with
blended fertilizer, depending on the formulation, which represents a reduction of 13% in cost
or savings of about U.S. $30/mt, on average, at GA storage, compared to NPK 15-15-15. If
part of these savings is passed on to the domestic distribution and retail network, this can result

in lower prices of fertilizer to farmers at retail points. This cost reduction, which would imply
an increase in consumption at the farm level, would benefit not only farmers and the agriculture
sector but all players along the supply chain, from importers to retailers, by increasing the
amount of fertilizer being moved in the market.
4.3 Some Options to Reduce Domestic Costs of Supplying

Fertilizers
From order to delivery to farmers, the entire procurement and importation process features a
number of inefficiencies that can be improved to save time and reduce cost buildups in the
fertilizer value chain.
4.3.1 Facilitating Delivery of Import Permits

To begin with, importers must apply for import waivers or permits, a process shrouded in
bureaucracy. The process features several iterations between the Minister of MoFA and the
Plant Protection and Regulatory Services Directorate (PPRSD) office in Pokuase, which can
take three to seven days.
To save time and enhance this process, since the PPRSD has the technical capability to approve
permits, they should be given the mandate to solely register and grant these permits
concurrently, creating a one-stop shop or an online solution.
4.3.2 Improving Port Operations

Improving their efficiency or allowing importers to choose which stevedoring or shore handlers
work on their vessels can help address any delays that may arise. The Ghana Ports and Harbours
Authority (GPHA) should mandate minimum criteria for the efficiency of the cranes and other
equipment used at the ports.
Though the GPHA, in partnership with private firms, is expanding the Tema port to a capacity
of 16 meters to allow bigger vessels to be berthed, this expansion will not benefit the fertilizer
vessels that will still have to use the existing berths for container vessels; this sometimes forces
the fertilizer vessels to incur demurrage costs ranging from $8,500-$11,000 per day. GPHA is
interested in engaging the fertilizer importers to build and expand dedicated berths for
fertilizers.
Finally, in order to reduce the amount of time vessels spend at the ports and, thus, the charges
they incur, GHPA, Ghana Revenue Authority, and Customs should ensure that the current
electronic systems are compatible, with a seamless interaction and interface to address issues
of network connectivity.
4.3.3 Transport
Best practice indicates that it takes two to three days to carry the products from the ports to the
importers’ warehouses. Sometimes, however, delays at the ports inadvertently delay the
transportation of goods to their intended locations. Clearly, if the inefficiencies at the ports are
resolved, then transporters are in a better position to guarantee on-time deliveries.
As demonstrated in Côte d’Ivoire, developing a rail network for fertilizer transportation from
the ports to high-consuming regions, such as Northern, Ashanti, and Brong-Ahafo, will reduce
haulage costs and ensure that farmers receive the products at the right time. This may also get
other companies interested in setting up blending facilities in the interior of the country. The

GoG can also develop waterway transportation using the Volta River to connect to strategic
locations.
4.3.4 Investing in Warehousing Capacities

The main players in the fertilizer market have warehouses to store the imported products once
they have been cleared from the ports. Some companies, such as Yara, Chemico, and OmniFert,
have a few warehouses located across the country to service their clients. These facilities are
heavily used during the peak season, which is February to August for food crops and June to
August for cocoa. Companies such as Global Haulage provide warehouses for rent across the
country to distributors, importers, and the GoG to store fertilizers for farmers until they are
needed.
To ensure that farmers get access to all types of fertilizers on time, the GoG can facilitate
investments in warehouses along the value chain and ensure that the fertilizer can be close to
the farms well before the planting season starts.
5. Developing the Fertilizer (Blending) Market

5.1 Potential Market Demand for Fertilizers
Fertilizer demand projections were estimated using an econometric model and crop nutrient
removal approach used by IFDC in previous studies.
This first approach using an econometric model is based on a linear lagged equation, which
makes a projection using a time series of fertilizer data beginning in the early 2000s. The model
makes a correction for the abnormal surge of apparent fertilizer consumption during 2017, due
to the concurrent implementation of two fertilizer subsidies. The time series used in the
estimation is a combination of FAO and AfricaFertilizer.org data.
Results of this estimation indicate that, under the current conditions and considering the
fertilizer subsidy under the PFJ Presidential Initiative, fertilizer consumption in Ghana is
expected to increase at a 6% average annual growth rate (AGR) to 450,000 mt by 2023. In the
longer term, and assuming the PFJ continues, fertilizer consumption and demand are expected
to continue increasing at a slower 5% AGR for the following five years to 542,200 mt by 2028.
The second approach using nutrient removal is used to estimate the potential quantities of
fertilizer required or demanded in Ghana to meet the countries’ agricultural production targets,
as stated in the Medium-Term Agriculture Sector Investment Plan (METASIP). This method
estimates fertilizer requirements based on nutrients removed by harvested crops, adjusted to
reflect fertilizer recovery efficiency. The approach also assumes good crop, soil, and fertilizer
management practices by farmers and assumes that fertilizer application is for maintaining,
rather than building, soil fertility levels.
Using the crop recovery efficiency factors of 50%, 35%, and 70% for N, P, and K, respectively,
results show that the amount of nutrients required for the targeted crops will total
approximately 104,800 mt, which is equivalent to almost 198,000 mt of urea, DAP, and MOP
combined. When all other crops are considered, these figures increase to 168,600 mt of
nutrients and 320,000 mt of fertilizer products.
The nutrient removal estimate, adjusted for fertilizer recovery efficiency, indicates that an
additional 198,000 mt of fertilizer is required to meet the agricultural production growth targets
of METASIP. When considering all other crops, the quantity of fertilizer products required to

achieve the METASIP production target increases by 320,000 mt, for a total need of
518,000 mt of additional fertilizer products.
When comparing the results of both the econometric and the nutrient removal approaches, it is
apparent that they both yield similar but slightly different results. The econometric model
estimates the total amount of fertilizer to be demanded and used in the next five to 10 years.
The nutrient removal approach estimates the additional fertilizer needed to achieve the
METASIP II agricultural production targets, which is to be added to the current amount of
fertilizer use for the current level of production. If we assume a three-year average (2014-2016
as per Table 1), the total amount of fertilizer products needed would be about 760,000 mt.
If we then compare these estimates to those provided by importers and the MoFA, they are
quite dissimilar. MoFA and the importers believe that fertilizer demand in Ghana should at
least double, or perhaps more than double, during the next five years, from a base of about
250,000 mt estimated current demand/consumption to 500,000-650,000 mt.
5.2 The Current Blend Market Situation

The current blend market is estimated at 100,000 mt per annum, representing an estimated 40%
of the total Ghanaian fertilizer market. Consumption of blended fertilizer is predominantly in
the cocoa-growing regions and plantation production areas.
Cocoa production consumes approximately 80,000 mt of blended fertilizer. It is mainly planted
by smallholder farmers in Western, Ashanti, Brong-Ahafo, Eastern, Central, and Volta regions
of Ghana. These farms comprise 80% of the blend market. The other 20%, representing 20,000
mt, is consumed by oil palm, rubber, cotton, and larger fruit and food crop plantations. The
plantation clients can be found mainly in Western, Eastern, Ashanti, Brong-Ahafo, and Volta,
and minimally in the Northern regions.

Table 11. Main Fertilizer Grades Used per Crop in Ghana
Crop Fertilizers Grades
Cocoa Yara Asaasewura PK 0-22-18 + 9CaO + 7S + 6MgO
Chemico Cocofeed PK 0-30-20;
Chemico Cocofeed Plus NPK 2-21-17+ 9.9Ca + 4.8Mg + 4S + 0.3Zn + 0.1B
LDC Cocoa Master NPK 1-21-19 + 9CaO + 6S + 6MgO + 1B
OmniFert Cocoa Aduane; AMG Cocoa Nti
Maize NPK 15-15-15; NPK 20-10-10 3S + 2MgO; NPK 25-10-10; NPK 21-10-10 +
2S
NPK 23-10-5 + 4MgO + 2Zn (Actyva); NPK 15-15-15 + 9.6S + 1B (or other
NPK depending on availability)
Urea, SoA in topdressing- 40-0-0 + 6S (Yara Amidas)
Rice NPK 15-15-15 basal; NPK 25-10-10
NPK 20-10-10 + 3S + 2MgO; NPK 15-15-15 + 9.6S + 1B (or other types of
NPK)
Urea and SoA in topdressing
Oil palm NPK 15-15-15 or NPK 15-9-20 + secondary nutrients; NPK 10-10-30+Mg+B
Oil palm NPK, MOP, single superphosphate (SSP), and some TSP in basal
IP
Groundnut SoA, SSP, MOP
Sorghum NPK 15-15-15 basal/urea and SoA topdressing
Soybean TSP, NPK 4-18-13 + 3S + 3MgO + 6CaO + 0.1B (Yara Legume)
Rubber Yara Winner 15-9-20 + micronutrients; NPK 11-11-21 + 2MgO + 0.2B
Cotton SSP and TSP in basal
Pineapple NPK 15-15-15 (or other NPK); urea and SOP
Mango NPK 15-15-15 (or other NPK); Nitrabor after fructification
5.3 Potential Market Demand for Blends

5.3.1 Potential Market Demand for Different Blends
The fertilizers selected, procured, and distributed for subsidy programs are often compounds
(e.g., NPK 15-15-15) lacking appropriate micronutrients and are not tailored to the appropriate
agroecological zone(s) (AEZ) or crop(s). Therefore, according to IFDC studies, they have
suboptimal impact on yields/productivity even if delivered to the intended beneficiaries and
applied correctly. Despite the GoG’s investments to encourage fertilizer use, Ghana’s yields
still fall far below expectations.
In discussions with stakeholders, it was clearly articulated that subsidies should be framed
within the context of soil fertility and getting the right nutrients to feed the crop. This highlights
the need for crop-specific fertilizer recommendations to reverse the effects of blanket
recommendations that result in persistent low yields, soil degradation, and low farmer
confidence.

Table 12. Current and Potential Blended Fertilizer Consumption
Food Plantations/
Crops Cocoa Private Total
Current amount of fertilizer consumed (mt) 150,000 80,000 20,000 250,000
Current percentage of blend market Negligible 80% 20% 100%
Current percentage of total fertilizer market 0% 32% 8% 40%
Potential fertilizer market consumption in 5 years 300,000 160,000 40,000 500,000
(mt)
Potential amount of blend market in 5 years (mt) 60,000 160,000 40,000 260,000
Potential percentage of blend market in 5 years 23% 62% 15% 100%
Percentage of total market 60% 32% 8% 100%
Source: Author’s estimates based on field discussions with blenders and key stakeholders.
5.3.2 Supplying Balanced Fertilizer Based on Ghanaian Soil Characteristics

For years, fertilizer recommendations have been the same for all farmers across the country:
two bags of NPK and one bag of urea or SoA. In the past few years, the Soil Research Institute
(SRI), Africa Soil Information Service (AfSIS), and IFDC have mapped and analyzed in
considerable detail over 5,700 combined soil samples taken from Northern, Upper West, Upper
East, and northern portions of Brong-Ahafo to determine the nutritional state of the soil. The
soils are generally acidic to slightly acidic, with very few cases where the soil pH is near
neutral, and with large portions deficient in P (< 10 mg/kg), S (< 6 mg/kg), Zn (< 1 mg/kg),
and B (< 1 mg/kg). On the other hand, most of the soils have high potassium levels.
Source: IFDC, 2017

Figure 18. Some Results of the Soil Analysis Conducted by IFDC in Northern
Ghana (2017)

SRI is working in partnership with Optimized Fertilizer Recommendations in Africa (OFRA),
AfSIS, and Savanna Agricultural Research Institute (SARI)-Decision Support System for
Agrotechnology Transfer (DSSAT), with funding from the Alliance for a Green Revolution in
Africa (AGRA), to harmonize and validate fertilizer recommendations and formulations. This
is based on five years of output using crop-based nutrient response functions; the use of soil,
weather, crop, and economic indicators; and on-farm demonstration trials. The aim is to
validate recommendations for four main crops being used for PFJ – maize, rice, soybean, and
cassava – in order to increase production of appropriate fertilizer blends and other soil
management technologies and practices.
These formulations are being tried and validated to improve the yield of the crops below:
• Maize should increase from 1.8 mt to 5 mt/ha;
• Rice from 2.2 mt to 6 mt/ha;
• Cassava from 12 mt to 40 mt/ha; and
• Soybean from 1 mt to 2.5 mt/ha.
Table 13. New Fertilizer Recommendations for Maize, Rice, Soybean, and
Cassava Based on Soil Nutrient Maps
Application Rate by Crop (kg/ha) Basal Topdress
Maize – target yield: 5 mt/ha
Blanket government: basal NPK 15-15-15, urea topdressing 250 125
Blanket government: basal NPK 15-15-15, SoA topdressing 250 150
Guinea savannah-specific: basal NPK 15-20-20+ 0.7Zn, urea topdressing 200 150
Forest/savannah transitional-specific: basal NPK 15-20-20+ 0.7Zn, urea 300 100
topdressing
Yara Actyva Basal + topdressing NPK 23-10-5 + 2MgO + 3S + 0.3Zn 250 250
Yara Actyva Basal + Yara Bela Sulfan (NPK 24-0-0 + 6S + 10.6CaO) 250 250
topdressing
Rice – target yield: 7 mt/ha
Lowland: basal NPK 15-15-15, urea topdressing 400 100
Upland: basal NPK 15-15-15, urea topdressing 300 100
Lowland: new basal, NPK 15-20-20 + 0.7Zn, urea topdressing 300 100
Upland: new basal, NPK 15-20-20 + 0.7Zn, urea topdressing 200 125
Lowland: Yara basal, NPK 15-15-15 + 2S split + Amidas (40N + 5.6S) 375 125
topdressing
Upland: Yara Actyva split NPK 23-10-5 + 2MgO + 3S + 0.3Zn + Amidas 375 125
40N + 5.6S topdressing
Soybeans – target yield: 3 mt/ha
No government blanket recommendation
New basal NPK 12-30-17 + 0.4Zn + 100 kg/ha TSP topdressing 200 100
Yara NPK 4-18-13 + 6CaO + 3MgO + 3S + 0.1B basal + Nitrabor 250 125
topdressing
Cassava – target yield: 40 mt/ha
Blanket government basal NPK 15-15-15, urea topdressing 200 150
New basal NPK 17-10-10 + 0.7Zn, urea topdressing 300 100
Yara NPK 10-10-30 + MgO 375 250
Source: Adapted from AGRA Assessment of Fertilizer Distribution Study, June 2018.

Although these new base formulations have adjusted the NPK concentrations according to crop
requirements by ensuring that the crops get at least 90-60-60 kg of NPK nutrients per hectare,
and adding appropriate levels of zinc (Zn), they may still be lacking in sulfur (S), boron (B)
and magnesium (Mg), given the deficiencies identified in the maps. SRI notes that although
the missing micronutrients are important, the current focus is to ensure the NPK has been
corrected, and the additional Zn micronutrient is added to ensure high impact; adding other
micronutrients would increase the cost to farmers.
These formulations were recently assessed by IFDC and the Africa Fertilizer and Agribusiness
Partnership (AFAP) as part of the AGRA-funded activity “Assessment of Fertilizer
Distribution and Opportunities for Developing Fertilizer Blends,” conducted in the first half of
2018 in 11 countries, including Ghana. Two key takeaways from the recent AGRA assessment
are:
1. Although it is advisable to have most nutrients applied in base fertilizer, it is imperative for
farmers to use topdressing to better time nitrogen application to nitrogen crop demand later
in the season; and
2. A critical element being neglected in many trials is B. The B concentration of soils is very
low, while most crops are responsive to B when applied at 0.5 kg/ha (as a blend) or 0.25
kg/ha B (as a granular or coated product).
5.3.3 Potential and Feasibility for Fertilizer Formulation Shifts

Despite the GoG’s keen interest in updating fertilizer formulations for crops and private sector
blenders in Ghana conducting various trials with SRI to have their micronutrient-enriched
products validated and registered, the current subsidy policy favors general NPK fertilizers.
This inadvertently creates a disincentive for farmers to pay more for multi-nutrient fertilizers.
Currently, there is little innovation in the blending market, with blenders only making slight
NPK adjustments and introducing Zn into formulations.
In early 2018, AGRA commissioned SRI to develop crop- and site-specific recommendations.
The Minister asked that these new fertilizer formulas be advertised. However, the scientists
requested time for validation to determine which nutrients will be needed for specific crops
before the recommendation could be transferred to the Ministry and blenders. MoFA hopes
that once SRI completes its validation and recommendations, it can regulate which kinds of
fertilizers should be formulated or imported into the country to meet crop needs. Importers and
blenders will have to provide the right types of fertilizers to align with the government policy.
At the time of interviews for this study in September 2018, SRI had harvested the fields in
Brong-Ahafo, was about to do the same in the Northern region, and were in the final field
evaluation stages with farmers before upscaling the recommendations to MoFA in preparation
for the next subsidy announcement.8
5.3.4 Developing Local Raw Materials to Produce Blends

Although there are limestone deposits in Ghana, they are predominantly used in the cement
industry. Currently, there are no investments for limestone to develop limestone granulation
for the fertilizer blending market in Ghana. Although soils that have been mapped in the
Northern, Upper East, Upper West, and northern portion of Brong-Ahafo regions show there
is extensive soil acidity, the fertilizer industry has opted to use dolomite to correct soil acidity.
8
LATEST NEWS: These new recommendations were fully incorporated in the “Pre-qualification of Fertilizer
Suppliers” notice issued by MoFA on November 7 for the 2019 “Planting for Food and Jobs” campaign.

A couple of the blenders have tried using the local limestone materials; however, they
concluded that they would not recommend using it for the blends due to its crystalline nature,
which changed the pH of the soil; it is hard, not easily soluble, and has poor granules that
segregate quickly, and the cost was high. The blenders and leading scientist at SRI
recommended using about 200 kg of dolomite (which contains calcium [Ca] and Mg), to be
applied as a nutrient, which will aid the soil in absorbing the primary nutrients.
5.4 Producing Blends in Ghana

5.4.1 Current Blending Facilities and Capacities
There are currently four functioning blending facilities in Ghana, all located in the outskirts of
Tema, with adequate storage capacities for both raw materials and finished products and good
access to power supply and the road network. Before the next planting season, there will be
two additional new blending sites, which will bring the total to six facilities9 with a total
blending capacity of close to 6,300 mt per day at peak season. Based on the 2017 estimated
consumption of 264,000 mt of NPK, all NPK fertilizers can be produced by the current
blending facilities within two months.
Table 14. Fertilizer Blending Capacity in Ghana

Installed Estimated % In Operation
Company Capacity Equipment Capacity Use Since
Chemico 1,000 mtpd10 2 EMT shamrock 10-20% 1976
Macrofertil 300 mtpd 1 EMT shamrock <20% 2017
OmniFert 500 mtpd 1 CMIC declining <30% Nov 2016
Yara (new site) 2,000 mtpd 1 EMT declining Estimated <20% Q4 2018
GloFert11 2,000 mtpd 1 EMT declining Unknown Q4 2018
AMG12 500 mtpd 1 Yargus declining Estimated <30% Q2 2019
Total 6,300 mtpd
All blending units installed can produce blends in small quantities, as low as 40 mt (one truck),
and can produce any type of soil- and crop-specific blend requirements the market may require
now and in the foreseeable future – especially with the newest blending lines, which are
designed to easily switch from one formula to the other and to incorporate any kind of
secondary or micronutrients.
Therefore, Ghanaian blenders are well-positioned to take advantage of the newly developed
soil maps and are capable to meet any future demands, even if those demands double in the
next five years.
5.4.2 Blending Unit Investment, Economic Benefit, and Profitability

In countries like Ghana with small farms and difficult logistics (roads, security, etc.), a few
larger plants are generally installed in or near the ports for logistics and economic reasons
(good examples outside Africa are Central America or Sri Lanka). The blending plants
9
The Yara blending site, which operated two shamrock lines, was closed and dismantled, and the new site is
functional.
10
mtpd – metric tons per day.
11
The GloFert site is uniquely located on Nsawam road, 40 km from Accra. All other blending sites are located
in or close to Tema.
12
Project is in its final stages.

produce quality products in larger quantities that are then distributed to inland distribution
centers close to the farmers to meet soil requirements. Agronomical and other farmer support
needs are supplied by the distribution centers, which let the production facility near the port
know what products are required. Final blends are then moved in bags via trucks to farm
centers.
Running at 20-30% of the name plate capacity is common, even in developed markets, such
as the United States or Brazil, or in mature markets like South Africa. Large blending units
should be able to store 30,000 mt or more in bulk, allowing for the flexibility to purchase raw
materials in the off season at substantial savings, as there are significant swings in fertilizer
prices. A successful blending unit should also be able to handle changes of blends, equipment
maintenance, plant stoppages due to various reasons, lack of storage space if transport is not
reliable, and many other issues that can and will affect production.
Standard costs for automated blending systems will run from U.S. $250,000 to
U.S. $800,000, depending on the size of the system and various options (bagging lines,
automation, quality of the building materials, etc.). Recent investments in Ghana are in the
range of U.S. $500,000 for such systems, with total investments in terms of capital
expenditure (CAPEX; land, building, and machines) conservatively over U.S. $4 million.
Typical costs for such blending units, based on an output of 50,000 mt per year, are U.S. $10-
1213 per ton for running the blending plant, and U.S. $2.5 per mt for unloading raw and
finished products. These costs include manpower (management, maintenance, and shifts),
forklifts, and insurance, but do not include warehouse, rental, or transport costs into or out of
the facility or bags and utilities (electricity or diesel if running on generators). It is estimated
that an annual minimum of 35,000 mt of blends will need to be produced for blending units
that manufacture 50-120 mt per hour to break even.
Being mainly a tender market, the fertilizer market in Ghana is not equally split between the
blending companies. Blending companies therefore need to have enough capacity to fulfil
tenders they might win, leading to more capacity per company required. If the market
becomes a normal and competitive market, the best companies can build up market share in a
normal competitive business and commit to long-term investments in technology (blender,
bagging) and also in technical advice and sales – and survive!
5.4.3 The Small Blending Plant Option

Smaller plants are more affordable if they are competing in the market, especially when soil
testing services are available, and policies promote crop- and soil-specific fertilizers. Such units
may bring in 50-kg standard bags, or 600-kg or 1000-kg large bags, and possibly bulk
containers as raw materials. They use existing warehouses that they are using for storing
fertilizers or a High-Density Poly (HDP) building (such a building has been in place in Mali
for over eight years and is in excellent condition).
Such units should be able to store around 2,000 mt of raw and 2,000 mt of finished product,
which would require about U.S. $2 million for inventories at peak production periods. If the
location does not require a building, equipment is in the range of U.S. $150,000 to
U.S. $250,000, with forklifts.
5.4.4 Deploying Additional Blending Units and/or Optimizing Current Blending

Capacity?
With six large blending units with installed blending capacity that can easily produce all types
of blends within the peak period (March to June), the common feeling among industry players
13
U.S. $12/mt was used in this study’s cost buildup estimates.

and equipment manufacturers is that adding any additional blending units is not currently an
economically viable idea and would lead to huge machine and staff redundancies for existing
blenders, resulting in losses for all.
The new blending lines that are coming into operation are state-of-the-art and will, without any
doubt, fulfill any specific requirements to produce customized blends for their customers,
whether large plantations, distributors, aggregators, or the GoG. Adding fertilizer quality
control and soil and plant testing capabilities as in-house or outsourced services will further
enhance their capabilities to respond to new market demand.
However, if the market is liberalized, more competitive, and geared toward the use of soil- and
crop-specific blends across the country, smaller units closer to food production centers will
have a competitive advantage over the Tema-based larger plants given the lower CAPEX
required and lower production costs. Given the number of small farms operating within a 100-
150 km radius of Brong-Ahafo (Techiman or Kumasi) and Tamale, these locations would
appear to be options for locations of smaller blending facilities to be further explored in the
medium term.
5.5 Needed Changes to Unlock the Potential of the Blend Market

With the progressive development of soil and nutrient maps in the country, Ghana is primed to
see the development of soil- and crop-specific fertilizer formulations. These maps provide
blenders with much of the information they require to develop blends that are not only adjusted
NPK formulations but contain micronutrients like S, B, Zn, and Mg in the right quantities to
suit different crops growing in various AEZs.
The development of the blends market rests on two primary activities: (i) changes in the GoG’s
subsidy program and (ii) education of farmers on the use and long-term benefits of fertilizer
blends.
5.5.1 Introducing Blends into the Subsidy Program

It is estimated that approximately 80% (121,000 mt for MoFA and 80,000 mt for COCOBOD)
of the fertilizer consumed in 2017 was subsidized, which indicates that the demand for fertilizer
in Ghana is defined by subsidies.
If the GoG mandates that these blends are to be used in the subsidy program or increases the
subsidy quota on these blends, farmers will be encouraged to use the appropriate fertilizers and
the private sector will have the market needed and the economies of scale to produce these
formulas at competitive rates. These recommendations were incorporated in the “Pre-
qualification of Fertilizer Suppliers” notice issued by MoFA on November 7, 2018, for the
2019 “Planting for Food and Jobs” campaign (see Section 7.3).
5.5.2 Investing in Education

This move from commodity fertilizers to blends should be done in tandem with a massive and
sustained education drive for farmers. By using demonstration plots, building the capacity of
extension officers, and instituting innovations like OCP’s school labs, farmers should be
educated on soil testing to discover their soil’s nutrition needs, blend recommendations, the
composition, color, and sizes of these blends, and how to apply these blends to ensure the best
results. Holding these live demonstrations will slowly build trust and farmer adoption of these
products, as well as sensitize farmers and agro-dealers on identifying quality blends.

There is a need to technically train blenders, extension agents, retailers, and regulators, as there
is a gap in both technical and management skills. More specifically, strengthening PPRSD is a
critical base needed for the sustainability of the sector. Working through the subsidy regime,
the GoG can create efficiency within the current system through the promotion and use of more
appropriate products, such as specific blends, instead of less appropriate compounds and
granular (manufactured in Nigeria) instead of prilled urea.
6. Fertilizer Value Chain Optimization

This section of the report provides a brief overview of the GoG’s FSP over the 2015-2018
period. Recommendations developed in this section are taking stock of previous analyses
(AGRA, 2016) and the Regional Subsidy Program Guidance developed in 2017 by IFDC under
the USAID West Africa Fertilizer Program, which seeks to improve the design and
implementation of subsidy programs in West Africa.
6.1 Background of the Ghana Fertilizer Subsidy Program

6.1.1 Since 2008: Reintroduction of Fertilizer Subsidy Programs
In July 2008, in an effort to increase productivity of Ghanaian farmers and modernize
agriculture, the GoG instituted a country‐wide subsidy on four types of fertilizer (NPK 15-15-
15, NPK 23-10-05, urea, and sulfate of ammonia). In 2008 and 2009, the subsidy was
implemented through a voucher system, and from 2010 through a waybill system. While the
voucher system targeted small‐scale farmers, the waybill system was made available for all
types of farms and farmers that could afford the subsidized price.
The total amount of subsidized fertilizers increased more than threefold from 43,200 mt in
2008 to 150,000 mt in 2011, at a cost equivalent to 10-13% of MoFA’s total budget in 2008
and 2009 (IFPRI, 2012). During the fifth year of the renewed FSP, the GoG added maize, rice,
and soybean seeds to the program. With the seed subsidy, the GoG was trying to promote the
use of certified seed to help with the development of the local seed industry (MoFA, 2013).
6.1.2 2016: Prioritizing Agriculture

The current government, in power since 2016, aims to modernize the agriculture sector, which
will lead to structural transformation of the national economy through food security,
employment opportunities, and reduced poverty.
The government is investing in two flagship projects: “Planting for Food and Jobs” and “One
District One Factory.” The government earmarked U.S. $113.5 million and U.S. $98.8 million
for 2016 and 2017, respectively, for these two programs. Investments in agriculture are guided
by METASIP II (2014-2017),14 which is the National Agriculture Investment Plan (NAIP) and
is currently under review.
6.1.3 2017: Planting for Food and Jobs Program

MoFA’s flagship program was introduced in 2017. The new program views subsidies through
an integrated value chain approach by offering seeds and fertilizers, as well as complementary
services in extension, marketing of outputs, and e-agriculture.
14
Medium Term Agricultural Sector Investment Plan (METASIP) II, 2014-2017, Ministry of Food and
Agriculture.

The program is expected to create an estimated 750,000 (direct and indirect) jobs and generate
additional farm income worth over GHS 1.3 billion (U.S. $267.5 million). The PFJ focuses on
three key commodity clusters identified as priority crops, namely (i) cereals (maize, rice, and
sorghum); (ii) legumes (soybean); and (iii) vegetables (tomato, onion, and pepper) because of
shorter gestation periods, adaptability to grow in all agro-ecological zones, and high propensity
for income generation and export revenue.
In 2017, the input arrangement and payment mode included the following: the government
would subsidize 50% of the cost of the inputs; the farmer would make a 25% down payment
before the supply and receipt of the inputs directly from the MoFA district; and the remaining
25% would be paid after harvest (end of season). The Agricultural Development Bank (ADB)
is engaged as the official bank to receive payments. ADB collaborates with rural banks,
especially in areas where ADB does not exist.
6.1.4 2018: Adjusting the Planting for Food and Jobs Program
In 2018, after a year of implementation, the government boasted that its flagship program was
a success, claiming that it had: 1) increased the use of improved seeds by strengthening the
local seed industry; and 2) increased output of the targeted crops/increased crop productivity.
It was reported that the PFJ campaign registered 201,000 farmers across the country. A total
of 2,160 university graduates and 1,070 youth were recruited to enhance extension delivery. In
addition, 121,000 mt out of a target of 233,356 mt of subsidized fertilizers (51%) and 4,455 mt
out of a target of 5,767 mt of subsidized seeds of maize, rice, sorghum, soybean, and vegetables
(77%) were distributed to beneficiary farmers.
However, there were significant challenges reported:
• Inadequate storage space for the receipt and storage of seeds and fertilizers at the regional
and district levels (rainfall failures in parts of Northern Savannah);
• Late delivery of inputs (seeds and fertilizers) in some regions;
• Inadequate domestic supply of improved seeds;
• Unavailable farmer database;
• Fall Armyworm invasion;
• Inadequate extension officers/personnel;
• Inadequate logistics – motorbikes, vehicles; and
• An estimated 3% repayment rate by the farmers of the remaining 25%.
Additionally, many farmers could not access the subsidized inputs in 2017 because GoG
logistical arrangements meant that farmers had to travel to the districts and banks to make
payments before getting seeds and fertilizers. This discouraged a lot of farmers from using
fertilizers since they had to travel very far from their farms and homes.
These challenges led MoFA to adjust the modality of the program for 2018 implementation.
The focus commodity clusters remained the same with the addition of groundnuts under the
legume cluster and cabbage, cucumber, lettuce, and carrots under the vegetable cluster, while
a new roots and tubers cluster was added with a focus on cassava.

Suppliers
E-Voucher
MoFA
Recommendations
for Selection
Banks of Farmers
E-Voucher
Reimbursement
Distribution Entities
Input Extension Community

Dealer Department Organization
Best
Management E-Voucher
Practices
Best
Management
Practices
E-Voucher
Farmer
Fertilizer
Suppliers
Source: AGRA Ghana.

Figure 19. 2018 Fertilizer Subsidy Model of the Planting for Food and Jobs
Program
6.2 The Fertilizer Subsidy Scheme

6.2.1 Determining Subsidy Allocation
To determine subsidy allocations, the Director of MoFA’s Directorate of Crop Services (DCS),
together with other stakeholders (advisors), meets to assess factors like previous fertilizer
supplied, current fertilizer needs of farmers, estimated demand of fertilizer for food crops, as
well as budgetary allocations for the program and MoFA. Based on these assessments and
projections of required food crops, they estimate the quantity of fertilizer required to make an
impact, and then set the subsidy quota.
DCS estimates that demand for the food crops sector is about 250,000 mt. However, given that
the GoG cannot subsidize the entire market, 180,000 mt of subsidized fertilizer was provided
in 2016 and 2017. The 2018 PFJ had a target allocation of 250,000 mt of inorganic fertilizers
and 20,000 mt of organic fertilizers.
6.2.2 Selecting Fertilizer Suppliers

DCS then works with the Procurement Unit to request proposals for consideration for
allocations from interested companies through advertisements in national daily newspapers.
Interested eligible tenderers may purchase the Plant and Fertilizer document on the submission
of a written application to the DCS upon payment of a non-refundable fee of GHS 1,000
(U.S. $171). The pre-qualification documents then must be delivered to DCS by an advertised
deadline date. Qualified companies are selected by an evaluation committee. The agreed upon
subsidy allocation is then shared among the companies selected.

6.2.3 Companies Involved in the Subsidy Program
Since the inception of the PFJ program, MoFA has developed a strong and growing partnership
with private fertilizer importing and distributing companies in the country.
During the 2015 FSP, only six companies were engaged and given allocations to supply a total
of 120,000 mt of NPK and 60,000 mt of urea. In 2016, the quota allocated remained at 180,000
mt, and the government selected the same suppliers in addition to Olam Ghana.
In 2017, the government requested 180,000 mt but later included an additional quota for PFJ,
bringing the total quota for 2017 to 232,000 mt. Given the larger quota, the government not
only increased the number of suppliers to 13 importers (including two organic fertilizer
suppliers, ACARP Ltd. and Yayra Glover Ltd.), but MoFA also negotiated and contracted
transporting companies to promote efficiency in the distribution channel.
According to 2018 MoFA documents, only 121,000 mt of fertilizers out of 232,000 mt (52%)
were supplied in 2017 under the two initiatives. The GoG’s decision to pay only 15% of the
total 2016 outstanding subsidized fertilizer debt resulted in the supply of only half of the target
to the program as a way of reducing risk. Some suppliers did not have the necessary funding
to import and supply large volumes since the GoG’s partial payment reduced their potential
capital reserves.
In 2018, to further deepen support for agriculture and meet increasing demand for fertilizer for
crop production based on the increased target of 500,000 farmers under PFJ, the subsidy was
increased to approximately 250,000 mt of fertilizer for farmers. To further emphasize
agribusiness development under the subsidy and ensure timely delivery of the increased
volume of subsidized fertilizer, the GoG increased the total number of participating companies
from 13 to 29 suppliers, signaling that stronger private sector participation is a major incentive
for fertilizer expansion in Ghana. The expansion allowed for the inclusion of many new
companies, each receiving 3,000 mt. A complete list of companies and their quotas can be
found in the annex.
However, this rapid expansion has its potential drawbacks, given that several companies that
received a quota did not have experience distributing fertilizer in Ghana, so there is a risk of
non-performance, which would impact effective implementation of the subsidy program.

300,000
250,000
200,000
150,000
100,000
50,000
0
2015 2016 2017 2018
Chemico Limited AMG Limited Afcott Ghana Limited
Yara Ghana Limited LDC (as MacroFertil in 2018) Iddisal Company Limited
ETC Agro Ghana Limited RMG ETG Ghana Limited
OmniFert Olam Ghana Limited Centroid
Garnoma Others ACARP
Figure 20. Fertilizer Subsidy Allocation in Ghana per Company (2015-2018)
6.2.4 Distributing Fertilizers to Farmers
6.2.4.1 Allocation by Region

Determining the subsidy allocation per region is done by referring to current demand from
farmers enrolling in the scheme while historical data of the fertilizer needs of each region is
used as a benchmark.
The three northern regions are typically the highest consumers of fertilizer while the Western
Region consumes the least. The three northern regions are therefore allocated about 45% of the
subsidy with the Northern Region receiving an estimated 20% (50,000 mt or 1 million bags of
fertilizer), which translates to 1 million coupons dispatched to the region to cover allocations.
In the event that a particular region reports shortages, the program reallocates fertilizer from
regions that have excess fertilizer to cover these shortages.
Table 15. Subsidized Fertilizer Consumption by Region for 2016-2017

Amount of Fertilizer Consumed (mt) % of % of Total
Region NPK Urea Total Subsidy Market
Northern 25,666 12,834 38,500 26% 15%
Brong-Ahafo 16,200 8,100 24,300 16% 10%
Ashanti 10.767 5,383 16,150 11% 6%
Eastern 10.267 5,133 15,400 10% 6%
Upper East 9,100 4,550 13,650 9% 6%
Central 8,500 4,250 12,750 9% 5%
Upper West 7,800 3,900 11,700 8% 5%
Volta 4,900 2,450 7,350 5% 3%
Greater Accra 4,200 2,100 6,300 4% 3%
Western 2,600 1,300 3,900 3% 2%
Total 100,000 50,000 150,000 100% 60%
Source: Adapted from MoFA regional consumption pattern in 2015.

6.2.4.2 Distribution Facilities for Subsidized Fertilizers
The fertilizer importers and their affiliate vendors serve as the distribution outlets for fertilizers
while selected individual member-companies of the Ghana Agro-Input Dealers Association
(GAIDA) serve as distributors of certified seed under the seed component of the program. The
role of bulk storage and transport service providers is muted because the government absorbs
port handling, loading, and transport costs as well as agents’ commissions and margins to arrive
at the approved prices under the current system.
6.2.4.3 Subsidy Beneficiaries

In 2018, PFJ targeted 500,000 farmers in all 216 districts and 10 regions in Ghana. The FSP
focuses on ensuring that smallholder farmers across the country secure resources needed to
improve their soils for higher crop yields. The groups and crops grown are verified before the
district director makes the final decision to supply the farmers.
Beneficiaries are generally smallholder farmers who own 2 ha (5 acres) of land or less, and the
program aims to have at least 40% female beneficiaries. However, the program also supports
outgrower schemes with nucleus farms.
Table 16. Target Beneficiaries for PFJ, 2017-2020

2017 2018 2019 2020
Eligible districts 216 216 216 216
Farmer-based organizations 10 650 1,350 2,000
Nucleus farmers 100 1,750 3,400 5,000
Direct clients 200,000 500,000 1,000,000 1,500,000
Households 202,860 562,400 1,123,500 1,682,000
Source: MoFA, 2017: Strategic Plan for Implementation of Planting for Food and Jobs Program.
6.2.4.4 The 2018 Subsidy Packages

The subsidy package comprises fertilizers, seeds, and free technical support in relation to
marketing, extension, and e-agriculture.
• Fertilizers: The program gave farmers a maximum of 15 bags each (10 bags of NPK and
five bags of urea, i.e., a maximum of 750 kg of fertilizers per farmer) at a 50% discount.
This is one of the highest subsidy rates in the sub-region, and the highest among Ghana’s
contiguous countries. The hope is that farmers will realize the benefits of using agro-inputs
and thereby increase their adoption of fertilizers, which in turn will stimulate the private
sector to provide the appropriate fertilizer at the right time, leading to an increase in on-
farm productivity and increased job creation.
• Seeds: The GoG subsidy program also offered seeds at 50% of the actual price, but when
farmers could not afford to obtain the coupons, the seeds were provided at 100% credit.
A rapid assessment at the agro-dealer level shows that under the program, farmers accessed an
average of six bags of fertilizer instead of 15. This is because the combined 15 bags cost a total
of GHS 995 or U.S. $205 (GHS 680 for 10 bags of NPK and GHS 315 for five bags of urea),
which is expensive for smallholder farmers. Some of the farmers kept the coupons, hoping to
access financing to purchase the rest of their allocation at a later date. Some farmers kept the
coupons to use for the following planting season (2019); this would allow farmers to redeem
the coupons as soon as the subsidy is announced and save them from having to travel to the
district again. Others sold the coupons, which is illegal.

6.3 Costs of the Program and Prices
6.3.1 Funding of the 2018 PFJ and Beyond
Over the first five years of its implementation, the annual cost of the FSP to the GoG
continued to rise, from a total of GHS 20.65 million in 2008 to a maximum of GHS 117.4
million in 2012, declining to GHS 64 million in 2013. Because the GoG was unable to pay
the 2013 claims to importers, there was no subsidy program in 2014. The program resumed in
2015, but the GoG was only able to fund 50% of the targeted quantity of fertilizer for the year
at a total cost of GHS 45 million.
Table 17. Estimated Cost of Planting for Food and Jobs Program, 2017-2020
2017 2018 2019 2020
(GHS millions)
Seeds 34.4 188.7 335.2 349.80
Fertilizers 52.40 363.60 563.40 729.90
Extension services 47.00 76.90 76.90 76.90
Marketing of produce 0.50 7.90 0.90 0.90
E-Agriculture 4.40 6.20 10.60 15.20
Total in GHS millions 138.70 643.30 987.00 1,172.70
Total in U.S. $ millions @ 4.8 28.9 134.0 205.60 244.30
Given that agriculture is a primary focus of the GoG, the government introduced a 50% subsidy
in 2017 and 2018. However, this came at a significant cost, further straining GoG resources.
Nevertheless, from discussions with MoFA, it is clear that the GoG intends to continue to fund
a robust FSP because it is important to the smallholder farmers and the government’s agenda
to promote food security and create jobs.
Table 18. Projected Fertilizer Requirement for PFJ Program, 2018-2020

2018 2019 2020
Fertilizer (mt)
NPK 198,119 388,056 407,050
Urea 110,909 219,043 229,857
Organic fertilizer 11,813 24,938 26,250
Total 320,841 632,037 663,157
According to the MoFA strategy, the GoG plans to end the subsidy program when PFJ
reaches its target of a 30% adoption rate in using fertilizers and seeds. Currently, MoFA is
focused on eliminating abuses, smuggling, and other losses along the fertilizer value chain.
6.3.2 Pricing, Payment Scheme, and Timelines

Prices are proposed by the companies who apply for allocation. The average price is determined
based on: (i) world market prices for urea and NPK products; (ii) calculation of fertilizer cost
buildup along the value chain, from ports to delivery to farmers; (iii) profit margin of the supply

chain actors (importers, distributors, and retailers); (iv) leeway for late payments; and (v)
inflation.
Given it is the farthest distance from Accra, MoFA uses Tumu transportation prices as a
benchmark; thus they are commonly used by all bidders to ensure uniform fertilizer prices
across the country.
Table 19. Subsidized vs. Market Prices of Fertilizers from 2008 to 2018
Product 2008 2009 2010 2011 2012 2013 2015 2016 2017 2018
Market Price Urea 36 47 41 43 44 54 105 100 95 126
(GHS/50-kg bag) SoA 28 33 34 33 40 44 – – – –
NPK 38 43 44 42 42 51 115 125 115 136
Subsidized Price Urea 26 26 25 29 35 50 84 80 48 63
(GHS/50-kg bag) SoA 18 18 18 26 38 44 – – – –
NPK 26 26 27 30 39 41 89 85 58 68
% Subsidy Urea 28 45 39 33 20 7 20 20 50 50
SoA 36 45 47 21 5 0 – – – –
NPK 32 40 39 29 7 20 23 32 50 50
Source: Authors’ update, adapted from MoFA, 2016, Expert panel (2015), http://ghana.gov.gh/.
6.3.2.1 The Payment Scheme: The Coupon System

The government allocates specific fertilizer quantities to selected fertilizer companies. In 2018,
MoFA adopted the coupon system, whereby fertilizer coupons with unique serial numbers were
distributed to the districts through the Regional Departments of Agriculture (RDA). These
coupons contain information on the amount, product type, farmer name, issue date, etc.
All coupons were authenticated and stamped by the District Departments of Agriculture (DDA)
and specific quantities of coupons were given to each Agricultural Extension Agent to
distribute coupons to farmers within their catchment areas. The extension agents kept records
on the coupon issuance to farmers/beneficiaries. Farmers paid at agro-input shops/retail points
an amount in cash equal to the amount quoted on the coupon to purchase inputs (fertilizers or
seeds). Agro-input dealers kept records of coupons and lists of farmers who purchased inputs
from their outlets. At the end of each month, all sales outlets sent collected coupons to their
respective fertilizer companies. Finally, the fertilizer companies aggregated and submitted
coupons for auditing and to DCS-MoFA for processing and payment.

Figure 21. Sample of Subsidy Coupons
6.3.2.2 Payment Timelines and Delays

The GoG still delays in making payments to importers and suppliers, and this impacts the cost
of fertilizers. Importers have not received all their 2016 payments. The new GoG
commissioned a comprehensive audit into all debts it inherited from the previous government,
which took about five to six months to complete. At the end of the audit, the GoG decided to
pay only 15% of the total bills. The new GoG rolled out its 2017 subsidy program; although
the importers still participated in the program, some of them only supplied half of their quota
allocation to reduce their risk. As of the writing of this report, MoFA has made all payments
for all supplies made in 2017.
For 2018, suppliers are still submitting invoices for payments, which will be verified by MoFA
before payments are made. An allocation of GHS 600 million has been apportioned to fund the
PFJ program (fertilizers, seeds, extension, market, and e-extension).
6.3.2.3 Fertilizer Diversion and Smuggling

A major drawback of the 2018 PFJ subsidy program was that large quantities of subsidized
fertilizers did not reach the intended beneficiaries due in part to the inability of some selected
fertilizer suppliers to deliver them on time to farmers, but mainly due to diversion and
smuggling. President Nana Akufo Addo,15 MoFA, police forces, and civil society16 have
reported in local media many cases of fertilizers smuggled across borders in northern Ghana,
mainly to Burkina Faso.
Based on interviews with private sector players operating in Ghana, Burkina Faso, and Mali, it
is estimated that the volume of smuggled PFJ fertilizers in 2018 was about 50,000 mt, ranging
from a possible 20,000 mt low to a high of 80,000 mt. Based on a 50,000 mt estimate, the loss
to the GoG is estimated at U.S. $12 million for 2018 alone.
15
https://www.ghanaweb.com/GhanaHomePage/NewsArchive/We-ll-punish-saboteurs-of-Planting-for-Food-
Jobs-Nana-Addo-682321
16
https://www.ghanaweb.com/GhanaHomePage/business/NGO-raises-concern-about-subsidized-fertilizer-
smuggling-677763

6.4 Preparing for the 2019 Planting for Food and Jobs Campaign
On November 7, 2018, MoFA published its call for pre-qualification of the fertilizer suppliers
for the 2019 Planting for Food and Jobs Campaign in local newspapers (see Figure 22).
Fifty-four companies submitted their applications to DCS on November 27, 2018, offering to
supply various quantities and types of fertilizers in different regions of Ghana.
The total call amounted to the unprecedented volume of 393,000 mt, up from 253,000 mt in
2018 (+55%) but significantly below the 632,000 mt set in the 2017 Strategic Plan. This
includes eight various grades of NPK for 235,000 mt (60%), urea for 119,000 mt (30%), and
organic fertilizers for 39,000 mt (10%).
As stated in the announcement, “the fertilizers to be covered include NPK blends or compound
fertilizers which are suitable for [our] soil conditions, and urea,” following most of the fertilizer
recommendations elaborated and tested by CSIR/SRI. Indeed, five new fertilizer grades are
included under the 2019 PFJ call:
• NPK 15-20-20 for cereals
• NPK 25-10-10 for vegetables
• NPK 15-20-20 + 0.7 Zn for cereals
• NPK 12-30-17 + 0.4 Zn for soybean
• NPK 17-10-10 for cassava
The standard NPK 15-15-15, NPK 20-10-10, and NPK 23-10-05 are recommended on
vegetables and cereals. This call represents a first important step toward more crop- and region-
specific fertilizers. However, offering possibilities to suppliers to offer new formulas or “old”
ones might jeopardize this attempt, especially if the previous price negotiation mechanism
remains the same: lower nutrient analysis products (for example, NPK 20-10-10 vs. NPK 25-
10-10 for vegetables) and standard formulas that are easier to procure on the international
market (e.g., NPK 15-15-15) may be offered by fertilizer suppliers instead of higher quality,
more suitable ones.
It is also important to note that there are important carryover stocks along the supply chain,
from importers’ and blenders’ warehouses to distributors’ and retailers’ shops, but
unfortunately, they cannot be estimated, neither in total nor by region or product. The 2020
requirements, therefore, shall be significantly below the 393,000 mt called for by MoFA
(possibly below 300,000 mt).
IFDC recommends that a light and simple, declarative monitoring system is put in place in
2019, in collaboration with the private sector, to estimate at least on a quarterly basis key
metrics on fertilizer stocks available in the country (e.g., consolidated stocks in each of the
three AEZs for urea and NPKs altogether, plus estimates of feedstocks and bagged/finished
products available in importers’ and blenders’ warehouses in GA).

Figure 22. MoFA Announcement for Pre-Qualification of Fertilizer Suppliers for
the 2019 PFJ Campaign

7. Fertilizer Value Chain Optimization
7.1 Key Findings and Challenges in the Fertilizer Value Chain
As observed in most other West African countries, a major problem in the agriculture sector in
Ghana is inadequate contribution of fertilizer to sustainably increase crop productivity, despite
large public investments in support policies, namely subsidies, research, finance, and
infrastructure.
This is reflected through a wide array of constraints or bottlenecks in the fertilizer value chain
affecting the fertilizer product, delivery channels, and policy and regulatory environment that
limit the efficient supply and use of appropriate and quality fertilizers delivered at affordable
costs to farmers. The challenges in the fertilizer sub-sector mostly relate to inefficiencies in the
fertilizer value chain, summarized in Figure 23.
l Lack of access to appropriate financing l Poor inland transport l Lack of confidence in fertilizer
with favorable conditions infrastructure quality
l Fragmented, inefficient importation l Limited distributor competition l High cost of unsubsidized
l Poor port infrastructure or lengthy l Limited and expensive credit fertilizer
clearing process and/or stringent collateral l Limited credit for small farmers
l Limited importer competition l Inadequate warehouse facilities l Limited reach of subsidized
l Unavailability of fertilizer on timely basis l Inability to on-lend to agro-dealers fertilizer in adequate quantities
l Import decisions not based on effective on favorable terms l Inadequate farmer skills
farmer demand l Limited logistics for network l Inadequate extension service
l Lack of access to appropriate financing development support
Manufacture/ Blending/ Distribution/ Agro-Dealer Output

Farmer (Use)
Importation Processing Wholesaling (Retailing) Market
l Lack of economies of scale l Thin agro-dealer networks and weak penetration l Limited access to stable and
importing blends l Low fertilizer retail margins vs. other inputs competitive output markets,
especially for staple crops
l Local blending plants l Limited and expensive credit and/or high
operating under capacity collateral l Lack of farmer education to
access structured markets
l Unavailability of proven new l Inadequate working capital
(e.g. GCX, Buffer stock,
formulations for blending Inadequate shop spaces to store fertilizer
l warehouse receipt systems,
l Lack of farmer awareness of l Unavailability of fertilizer in sufficient quantity at school feeding, agro-
blends the right time in the planting cycle processors)
Figure 23. Challenges Faced by Actors in the Fertilizer Value Chain
Furthermore, the fertilizer value chain is too dependent on the subsidy program, the cost of
which represents a significant share of the budget for the agriculture sector. This makes it
difficult for the GoG to invest in other parts of the sector that could improve efficiency in this

value chain – productive and transport infrastructure, for example – while limiting
opportunities for the private sector to invest in non-subsidized segments of the market.
The national FSP, as it is structured and has performed to date, is among the main factors
impeding the sustainable development of the fertilizer value chain in Ghana. The FSP has
created a supply “push” condition while restraining the expansion of the national distribution
network and neglecting the demand “pull” side of fertilizer marketing.
Retail fertilizer prices in Ghana are relatively high (nearly twice FOB prices), largely because
of a lack of preference for fertilizer and high logistic and financial costs. However, Ghanaian
prices are the lowest in the region, equivalent to those in Nigeria, even though Nigeria is a
producer and Ghana is not.
Blending capacity in Ghana far exceeds current, short-term, and at least medium-term
quantitative and qualitative needs, and building/developing additional blending capacity now
would result in driving some of the current blenders out of business and eliminating workers’
jobs.
7.1.1 Limited Capacity to Enforce Regulatory and Policy Framework for

Product Quality Control
Ghana is in alignment with the regional fertilizer quality control regulatory system and has
ratified and published the ECOWAS regulation in its national gazette. The GoG has designated
PPRSD as the responsible technical directorate for registering fertilizer products, companies,
and retailers, issuing permits for importers, testing and laboratory inspection of fertilizer
products, and conducting field trials on the efficacy of “new” fertilizer products.
However, PPRSD is still under-staffed and under-equipped, resulting in poor enforcement of
the regulations. Once fertilizer is in-country or blends are produced locally, little or no testing
is performed at the blending plants, wholesale, or retail levels, which cannot ensure the quality
of fertilizers sold on the Ghanaian market, particularly in terms of their nutrient content, net
product weight and physical qualities.
This situation has resulted in the supply and use of fertilizers that were adulterated, short-
weighted, and had fewer nutrients than declared on the label by suppliers and farmers,
respectively. This lack of enforcement and inadequate training and sensitization on fertilizers
have led to a lack of confidence by farmers in the quality of fertilizer available in the market
and a negative public perception of inorganic fertilizer.
7.1.2 Low Margins Along the Domestic Distribution Channels

This study’s findings show that MoFA-negotiated prices with importers/suppliers under the
FSP do not factor in all the costs incurred by all value chain actors, as the actual cost of
financing (or opportunity cost of financing if own finance is used, which is typically the case
at distribution and retail) and the operational cost at each level of the domestic value chain
may not be taken into consideration.
As a consequence, the predetermined portion of the price to be shared among all the actors in
the domestic value chain may not be enough to cover all transaction costs, especially the cost
of capital and other operational costs. It is, on average, 20% below the price paid for non-
subsidized fertilizer.
Therefore, this lower cost is achieved at the expense of the domestic distribution and retail
network. Local distributors, wholesalers, and retailers are left with low, if any, margins, a
practice that provides a further disincentive for suppliers to invest in the weak inland
distribution network.

This practice has become a major factor limiting the expansion of the fertilizer distribution
network in Ghana, affecting all actors down to the farmer. It is the opposite of the intended
result – increasing the availability and use of good quality fertilizer for farmers by making it
more affordable and accessible to increase crop productivity and production.
7.1.3 Weak Distribution Networks Served by Agents With Limited Capacity and
Knowledge
Fertilizer distributors and agro-dealers face poor inland infrastructure, limited market
opportunities beyond the FSP, inadequate warehousing facilities, limited logistics, and
inadequate financing to extend their distribution networks closer to the farmer.
Agro-dealers are concentrated in urban or semi-urban areas with very few located in the rural
interior near smallholders’ farms. Between four and 10 agro-dealers serve an average of 10,000
farmers; this results in farmers traveling up to 50 km to access fertilizer, seeds, and other inputs
from the nearest retailer, raising the cost that farmers pay to use inputs.
Some also suffer from inadequate shops and warehousing facilities to store fertilizer at the
appropriate time and under the proper conditions. This results in quality fertilizer being
unavailable in sufficient quantities at the right time and place in the planting cycle.
7.1.4 Limited Incentives for Private Sector to Invest Beyond Government-

Sponsored Programs
The FSP provides incentives to import fertilizer required by the program, but importers may
or may not import additional quantities and formulations to supply unforeseen needs beyond
firm orders placed by large-scale and commercial farms. Usually, suppliers’ import decisions
are based on previous quantities imported and GoG tenders rather than on effective farmer
demand because of the lack of reliable data on fertilizer demand and limited commercial sales
opportunities.
Therefore, the actual quantity of fertilizer on the Ghanaian market is restrained. Despite the
incentive to import, importers and blenders have no incentive to develop a distribution network
of their own down to the farmer level, particularly in remote rural areas. This would require
further investment and perceived unnecessary risk given the limited level of profits and long-
term market development opportunities that can be generated from this activity.
7.1.5 High Financial Costs and Limited Access to Finance

In addition to these constraints, there are other structural limitations, including the high cost of
capital and limited availability of credit for investing in the expansion of the distribution
network. High interest rates (24-30%) are at least partially the result of the instability of the
local currency, the Ghanaian cedi, which has suffered consistent devaluation.
Importers lack access to appropriate financing with favorable conditions (credit guarantees,
collateral, etc.) and also face bureaucratic import waiver and permit processes, poor
infrastructure, and lengthy port clearing processes. Although the situation is improving, delays
in payment by the GoG (some 2016 bills are still outstanding) have added to the burden and to
financial costs that must be supported by fertilizer importers.
7.1.6 High Logistic Costs

High domestic logistic costs (transport, storage, and handling) restrain the fertilizer distribution
network as a consequence of limited and/or costly warehousing capacities and poor road

conditions, especially rural feeder roads. This increases the cost of distribution and can also
inhibit the expansion of the retail network to more remote rural areas.
Thus, farmers find it difficult to access fertilizer, since they must travel long distances to
acquire inputs. This is most critical in the northern regions where, despite these constraints, the
use of fertilizer has been increasing to produce cash crops.
7.1.7 Lack of Farmer Access to Reliable and Remunerative Markets

On the demand side, the main issues deterring the expansion of fertilizer consumption are
farmers’ and retailers’ lack of knowledge on proper fertilizer use and recommendations based
on crop and soil conditions, and farmers’ mistrust in the recommended quantity and quality
of fertilizer to be applied to their crops.
Lack of trust by farmers on the quality and truth-in-labeling of the recommended fertilizer is
based on their previous experiences/results in which they did not experience clear benefits of
fertilizer application, despite following recommendations from extension agents and fertilizer
suppliers’ technical teams; they have often seen only the disadvantages of increasing their
production costs by buying fertilizers.
There is a huge disconnect between farmers/producers and agro-processors (assured markets
for farmer produce), particularly for feedstock, due to lack of actionable market information
and weak business relationships. In addition, although structured markets exist, such as the
Ghana Commodity Exchange (GCX), Ghana School Feeding Programme (GSFP), and
National Buffer Stock (NAFCO), where farmers can sell their produce at profitable prices,
most farmers lack the necessary skills to trade in such markets.
7.2 Policy Implications and Recommendations (Medium to Long

Term)
To address issues and conclusions highlighted above, the most important policy measure is
rethinking and redesigning the FSP in the shorter term with the goal of ending it in the
longer term to allow for greater competition and effectiveness in fertilizer importation,
blending, and distribution.
If the GoG continues the FSP, it must allocate adequate funds in a timely manner and at
preferential rates for local investment in the fertilizer distribution network and to support
agriculture production activities. To make this measure more effective, the FSP must be
redesigned to be more inclusive of the distribution and retail network’s participation in price
determination to make margins more attractive for further investment in the distribution
system all the way to the farmer. It also needs to be built on farmer demand for appropriate,
balanced fertilizer.
7.2.1 Toward Smart Subsidies: Policy Reform Approach and Tool to Reform
the Current Subsidy Program
In West Africa, FSPs have failed in general to bring about expected increases in agricultural
productivity, overall food production, food security, and poverty reduction. The poor
performance of FSPs is largely because these programs are poorly designed and managed and
do not draw upon or include principles for smart subsidies.
In 2017, ECOWAS, under its new Regional Agricultural Investment Plan for Food Security
and Nutrition, called for the need to harmonize national input subsidy policies. IFDC, through
its USAID West Africa Fertilizer Program (WAFP), developed a Regional Guide for FSPs,
aimed at reforming current, ineffective programs into smart ones, improving their design,
implementation, and performance. Specific guidelines define principles and actions to ensure

programs can be “smart,” do not distort markets, allow balanced roles between the public and
private sector, and ensure better targeting, increased efficiency, and more sustainability.
7.2.1.1 Key Principles for Smart Subsidy Programs

The Regional Fertilizer Subsidy Program Guide lists 13 broad guiding principles that
characterize a “smart” subsidy program:
1. INCLUSIVE PARTICIPATION that promotes private sector development and
participation;
2. SPECIALIZATION, where roles of all participating actors are defined and assigned on the
basis of specialization and comparative advantage to achieve complementarity and exploit
potential synergies;
3. FAIR COMPETITION, which promotes competition between private suppliers in order to
drive down costs of delivering subsidized fertilizer and increase quality of services
provided to farmers;
4. EFFICIENCY (cost reduction, profitability, economies of scale, etc.) as the basis for
fertilizer promotion efforts;
5. BETTER TARGETING (EQUITY) using a mechanism/approach involving village
communities, local administration and authorities, and farmer organizations that ensures
the right beneficiaries (producers, areas, and crops) are properly identified and effectively
reached;
6. TRANSPARENCY in overall targeting and distribution system;
7. TIMELINESS through programs rigorously planned and implemented to avoid delays in
delivery of subsidized fertilizers at affordable costs and to reduce uncertainty and
unpredictability with subsidy programs;
8. APPROPRIATE AND QUALITY PRODUCTS that meet requirements established by the
relevant research recommendations and regional fertilizer regulations, respectively;
9. PROPER INCENTIVES through market-based measures that do not undermine incentives
to private sector investments;
10. COMPLEMENTARY INPUTS that promote fertilizer products as part of a wider strategy
that includes complementary inputs (and strengthening of markets);
11. EXIT STRATEGY devised to limit the time period of public intervention;
12. SUSTAINABILITY of gains in input use and crop yields as the goal when designing the
program, tied to other public investments to support current beneficiaries and product
suppliers; and
13. ACCOUNTABILITY to ensure that impacts of the use of public resources in the subsidy
program are objectively and rigorously assessed.
A list of 36 proposed actions on how to apply these principles can be found in the annex.
The recommendations below for Ghana FSPs have been organized to relate to one or more of
the above principles.
7.2.1.2 Key Metrics with Policy Scenarios

Recommendations have been packaged into two policy change scenarios to be contrasted with
the “no change–status quo” scenario as described below:
1. Status quo or continuation of current policy;
2. Limited reform of FSP with selected principles (applicable in short to medium term); or
3. Full reform of the FSP with all principles (applicable in medium to longer term).
Table 20 presents expected results in terms of fertilizer markets and crop productivity.

Table 20. Expected Results for Policy Scenarios
Scenario 1:
Ongoing Scenario 2: Scenario 3:
Reforms Limited Reforms Full Reforms
Components Variables CURRENT (2018) SHORT TERM LONG TERM
Costs FOT price vs. FOB 41% < 40% 35%
price
Retail price vs. 40-45% 35-40% 30-35%
FOT price
Consumption Total volume in 440,000 650,000 760,000
5 years
(in mt)
Types / Blanket fertilizer NPK 15-15-15
Formulas recommendations NPK 23-10-5
NPK 20-10-10
Crop- and AEZ- Balanced fertilizer Balanced fertilizers
specific fertilizer introduced: developed:
recommendations Maize: NPK 15-20-20 + 20+ fertilizer grades
0.7Zn or NPK 15-20-20 developed, including
Soybean: NPK 12-30-17 micronutrients (AEZ-,
+ 0.4Zn crop-, and soil-specific,
Rice: NPK 15-20-20 and soil
Cassava: NPK 17-10-10 amendment where
needed)
Balanced fertilizers 10% 50% 90%
%
Yields (mt/ha) [current average [mean yield new [target yields]
yields] formulas] Maize: 7 mt/ha
[adapted from Maize: 1.7 mt/ha Maize: 6 mt/ha forest Soybean: 3 mt/ha
Dr. Tetteh, CSIR] Rice: 2.2 mt/ha Savannah Rice: 7 mt/ha (lowlands)
Cassava: 12 mt/ha Maize: 4.5 mt/ha Guinea Cassava: 40 mt/ha
Savannah
Soybean: 1.5 mt/ha
Rice: 6.5 mt/ha
(lowlands)
Rice: 2.5 mt/ha (upland)
Cassava: 25 mt/ha
7.2.2 Promote Inclusive and Fair Participation of Key Business Actors in the
Subsidy Program
Recommendations below relate mainly to:
• Key Principle (KP) 1 – INCLUSIVE PARTICIPATION
• KP 3 – FAIR COMPETITION
• KP 6 – TRANSPARENCY
Inclusive participation should be applied to involve key stakeholders during the design of FSPs
(public-private partnership) and, more broadly, during the design of any programs or strategies
affecting the fertilizer sector. All major actors or stakeholders should be consulted during
design and implementation to document challenges that arise and their potential solutions as
the process evolves.

7.2.2.1 Promoting a More Efficient Selection of Participating Companies
Participating companies supplying fertilizer under the FSP should be properly constituted
(fully registered and be able to show financial and bank statements over at least the last three
years), have an excellent reputation, and have verified capabilities to deliver fertilizers
efficiently through an adequate retail/agro-dealer network able to serve all FSP beneficiaries.
In particular:
• The companies must have a proven capacity to deliver granted allocations on time. New
companies, in particular, will need to be properly scrutinized to ensure that they meet the
set criteria for qualification and have the distribution capacity on the ground to deliver
fertilizer of the right quality to farmers at the right time and at the right place.
• In cases of poor performance, the current practice of reducing or reallocating volumes of
non-performing companies should be changed. Companies found to have provided false
information on their capabilities, distributor networks, and product quality, thus failing to
perform, should not only have their quotas reduced, but also should be completely barred
from participating in subsequent years until found to be credible. Such liability for false
information and non-performance should be explained in the application documents or
implementation modalities.
• A database of qualifying companies for the PFJ program should be established by MoFA;
key business information (derived from the company’s application) will be recorded, and
for those having been allocated any quota under the subsidy program, key performance
indicators will be tracked on an annual basis. The resulting information should be available
to all parties involved in the selection process, so that they can make well-informed
decisions.
7.2.2.2 Setting Prices and Redefining Profits and Margins

Currently, the subsidized, negotiated price of fertilizers under the FSP takes into consideration
transportation costs along the supply chain from import to retail and a predetermined margin
to be shared among wholesalers, distributors, and retailers. MoFA and importers should ensure
that the downstream supply chain actors (distributors and retailers) are represented during
subsidy price negotiations. In particular:
• MoFA should take into consideration the actual cost of financing at distribution and retail
operational cost at each stage of the domestic supply chain, thereby ensuring that all
stakeholders along the supply chain have economic incentives to invest in bringing inputs
closer to the farm gate while preserving the interests of GoG and farmers.
• The cost buildup section of this study and new Excel simulations developed during 2019
by Nitidæ for IFDC to estimate fertilizer costs along primary trade corridors in West Africa
can be further refined to allow Ghanaian stakeholders to update the actual costs and profits
along the supply chain ahead of each season and determine buying and selling prices for
the upcoming season in a more factual and transparent manner.
7.2.2.3 Improve Subsidy Program Timelines

• KP 4 – EFFICIENCY
• KP 7 – TIMELINESS
The GoG/MoFA must be commended for improving the timeline for the design, launch, and
implementation of the FSP over recent years. However, further improvements are possible:

• Conditions and calls for application for the following year’s subsidy program should be
announced earlier, ideally in September/October instead of the usual December/January.
Implementation of robust database and monitoring tools (see below) will facilitate such a
change, as feedback from the current cropping season and required data will be available
and consolidated in real time. Earlier announcements will allow importers and blenders to
source their raw materials more efficiently and at lower costs.
• Implementing e-tracking of the FSP should also allow GoG/MoFA to reduce if not
completely eliminate delays in paying fertilizer suppliers, removing a major business risk
for the private sector. This will encourage more competition and reduce financial costs.
7.2.2.4 Setting a Limit to the Subsidy Rate and Program Time Length
• KP 11 – EXIT STRATEGY
• KP 12 – SUSTAINABILITY
The exit strategy should define a clear timeline for the end of interventions and when/how
public interventions will be limited. The strategy should identify/embed approaches to
gradually move the FSP targeting from current to future beneficiaries (producers, areas, and
crops) in real need of the subsidy until the program is eventually completely phased out.
Reforming the FSP to lead eventually to a GoG exit will follow the principle of a gradual
approach as specified in the National Fertilizer Policy, which indicates that any reform shall
be gradual, within a timeframe agreed upon by all stakeholders.
• Implement short-term (2019-2020) reforms to the FSP (see detailed recommendations in
Section 7.3). The objectives include more efficient management of the program, reducing
smuggling, enforcing quality control enforcement, and developing a farmer database for
better targeting and for facilitating a shift from “subsidy fertilizer supply” or “push” to
“subsidy fertilizer demand” or “pull” implementation in the medium to long term.
• Revise in the medium term (2021-2022) the subsidy rate (currently 50%), which has
created an enabling environment for smuggling subsidized fertilizer products to
neighboring countries, especially since all of the contiguous countries have lower rates. If
subsidies are reduced to 20-25%, as recommended in the Regional Subsidy Program Guide,
the profit margins for attempted smuggling are lowered, minimizing the incentive to
smuggle the subsidized fertilizers. This is in line with the GoG’s effort to ensure that
Ghanaian farmers derive greater benefit from the program. Reducing the subsidy rate also
will make it easier for the GoG to exit the program when appropriate.
• Implement long-term (2021-2024) reforms, with the objectives to shift to a “demand-
driven” system, leading to graduation of farmers from the FSP, and to enter a fully
competitive private sector-led fertilizer market by the end of 2024.
7.2.3 Promoting a More Transparent and Collaborative Environment in the

Fertilizer Sector
• KP 1 – INCLUSIVE PARTICIPATION
• KP 2 – SPECIALIZATION
• KP 6 – TRANSPARENCY

• KP 9 – PROPER INCENTIVES
7.2.3.1 Encourage the Creation of a Ghana Fertilizer Platform for Enhanced

Public-Private Sector Dialogue
In June 2018, MoFA constituted an ad-hoc National Task Team (NTT) to coordinate the
development of the Five-Year Strategic Plan for the Ghana Fertilizer Expansion Program
(GFEP). The NTT consisted of representatives from the public and private sector, research
and development institutions, fertilizer industry players, specialized institutions, professional
farmer associations and input dealers, and development partners.
In view of the team’s diversity, specialization and expertise across the fertilizer value chain,
this NTT could form the core team of a National Fertilizer Platform (NFP) that would:
• Serve as a “think-tank” for matters related to the fertilizer industry in Ghana and link to the
National Fertilizer Council (NFC), the Ghana Fertilizer Advisory Committee (GFAC), and
the GFEP secretariat;
• Engage the GoG through policy advocacy for the creation of an enabling environment for
expanded fertilizer use; and
• Periodically organize public fora and discussions on balanced fertilization, farmer
sensitization, fertilizer subsidy management, fertilizer quality control regulations, etc.
Facing similar issues in a relatively similar agricultural and policy context, Kenya’s
experience in the matter should be explored, as public and private stakeholders formed
KeFERT17 in 2018 with the following objectives:
“The proposed Kenya Fertilizer Platform is a public-private mechanism composed of
key stakeholders involved in fertilizer access, quality, and use, whose purpose is to
resolve issues and enable dialogue, coordination, and information exchange. The
Fertilizer Platform is intended to facilitate action on key fertilizer issues through
multi-stakeholder dialogue and public-private task forces on an ongoing basis. A key
outcome of this platform is increased accessibility, affordability, and availability of
fertilizers to smallholder farmers as a result of a more competitive fertilizer sector.”
7.2.3.2 Encourage the Creation of the Fertilizer Industry Association of Ghana

While the Ghana Agri-Input Dealers Association (GAIDA) was established in the early
2000s to represent agro-dealers operating across the country, the upstream players of the
value chain (importers, blenders, manufacturers, and major distributors) are yet to organize
and speak with one voice in instances such as the National Fertilizer Council and/or the
Ghana Fertilizer Advisory Committee, both created under the Plants and Fertilizer Act 2010
(Act 803).
A national fertilizer industry association will allow the private sector (importers,
manufacturers, blenders, and large distributors) to contribute effectively, from a sound
institutional footing to the design, implementation, and monitoring of FSPs, the GFEP, and
related projects, programs, and policies.
While early discussions are already taking place among some of the fertilizer industry players
to form a national association (with the possible name Fertilizer Industry Association of
Ghana, FIAG), the West Africa Fertilizer Association18 (WAFA) could provide assistance
and guidance in this endeavor. The regional association endorsed its five-year strategic plan,
focusing on seven main areas of intervention (finance, quality, stewardship, availability,
trade, information, and dialogue) that are fully aligned with issues and challenges the private
17
See https://ifdc.org/kefert/ for more information.
18
See https://wafafertilizer.org/en/.

sector is facing in Ghana in 2019. Several key fertilizer players operating in Ghana are
already active members of WAFA (Omnifert, Macrofertil, Yara, OCP, and ETG to date).
7.2.4 Enforce Fertilizer Regulatory Framework and Increase Quality Control

Capabilities
• KP 8 – APPROPRIATE AND QUALITY PRODUCTS
Establishing the rule of law and policing in the rural sector is important to protect consumers,
producers, and merchants. It is important to recognize that quality control and truth-in-
labeling are critical for the proper development of a market, particularly when it is becoming
more diverse and dynamic, as is the case in Ghana. Measures or conditions put in place for
adopting and enforcing ECOWAS fertilizer regulations must be strengthened to ensure that
non-subsidized and subsidized fertilizers meet quality specifications (type, formulation,
weight, labeling, etc.).
The GoG should strengthen the testing capacity of PPRSD to ensure that quality and
appropriate fertilizers are being imported, blended, and distributed in Ghana. Since the GoG
hopes to promote blends, which can be the ideal market in the long term when there are
larger demands, it will be imperative that quality products are demanded from the importers,
local blenders, and local distributors.
In order to achieve that, GoG leadership should support the National Fertilizer Council
(NFC) to:
• Effectively enforce the fertilizer law and Key Roles of the NFC
regulations to ensure good quality fertilizers • Advise the Minister on policies for
are provided to farmers and protect private development of fertilizer manufacture,
sector investments against unethical practices inspection, sampling, analysis, and
marketing;
in the market. • Monitor the supply of fertilizer to ensure
• Provide adequate institutional, technical, and fertilizer security in the country;
financial support to the NFC and its members • Develop procedures for registration of
to accomplish its functions, as spelled out in fertilizers;
Section 95, Part III, of the Plants and • Define standards for fertilizers and
procedures for their registration;
Fertilizer Act 2010 (Act 803).
• Recommend to the Minister a list of
GoG leadership also should support the PPRSD fertilizer types for which marketing is
permitted for annual publication in the
to: commercial and industrial bulletin;
• Maintain adequate human and financial • Recommend to the Minister fees for the
resources to effectively and sustainably registration, inspection, and testing;
enforce fertilizer quality control policies and • Recommend to the Minister procedures for
regulations for fertilizers produced, imported, accreditation; and
and sold in Ghana in order to identify most • Perform other functions that are specified
under this act and that are assigned by the
quality issues. Minister
• Roll out standardized fertilizer testing
systems using spectral technology, a less expensive and more rapid technology than
traditional wet chemistry. PPRSD and private blenders have already agreed to pilot this
system in Ghana to test fertilizers while upgrading the current PPRSD fertilizer testing
laboratory for optimal operation. When a large and reliable database of calibration is built
to cover all fertilizer types and mixtures, spectral analysis will be preferred over and more

effective than the conventional methods of fertilizer analysis. This and corresponding setup
and operational budgets should be integrated into the five-year (2019-2023) GFEP
Strategic Plan.
• Strengthen the capacity of fertilizer inspectors and fertilizer analytical staff (public and
private laboratories) through in-service trainings and exchange visits (fertilizer inspection
techniques and procedures; inspections of fertilizer warehouses, blending facilities,
distribution and retail outlets; spot inspection and sampling of fertilizer products for
analysis; administrative actions and prosecution; fertilizer analytical methods and
procedures; use and maintenance of laboratory).
• Encourage self-regulation by the fertilizer industry (trainings and sensitization) and private
sector investments in soil testing, fertilizer quality control labs, and services (e.g., through
CropNuts, SGS, etc.).
7.2.5 Properly Target Beneficiaries (Farmers, Zones, and Crops)

• KP 5 – BETTER TARGETING (EQUITY)
• KP 13 – ACCOUNTABILITY
7.2.5.1 Register Farmers for Better Targeting and Monitoring

In the wake of the recent PFJ program, which has doubled the number of beneficiaries,
criteria for eligibility for the FSP need to be reexamined. Reliable agricultural census data
becomes more necessary, but also technically more feasible, with the rapid development of
more affordable and customized IT solutions. Use of a voucher system, together with other
ICT tools to reach proper targets, is a workable option, through private sector participation
and development of a biometric farmer database. The biometric farmer database and geo-
referencing of beneficiary farmers will help to better target beneficiary farmers of the FSP.
The following are necessary to ensure proper development:
• Prioritize the development of a comprehensive and robust farmer database for targeting
and developing demand-driven fertilizer use (and other complementary agro-inputs, such
as seeds), while building the underlying foundation and infrastructure needed to operate a
large-scale program (able to reach 1 million farmers by the 2020 cropping season).
• Develop concurrently a series of associated services, such as e-voucher management, e-
tracking of fertilizer flows and stocks, financial transactions, monitoring and impact
assessment tools, in order to build a complete and durable ecosystem. Roles of local and
global participating actors should be defined and assigned on the basis of specialization
and comparative advantage to achieve complementarity and exploit potential synergies
(e.g., IBM and MasterCard for database management, Edenred for e-voucher management,
mobile phone operators for last-mile financial transactions, etc.).
• Update and enrich the country-wide 2012 agro-dealer directory. The updated directory
should encompass the entire supply chain, from importers to retailers, and include essential
public and private associated services (government agencies, labs, etc.). Data collected to
update the directory will inform GoG/MoFA and key fertilizer stakeholders on the current
status and needs of the retail network (e.g., technical and business knowledge and skills,
size and location of storage facilities, and financial capacity) and will help in the design of
more efficient and demand-driven capacity building programs and interventions. The
directory will also facilitate the rapid and full implementation of e-registration and e-
surveillance of agro-dealers by PPRSD and provide another delivery channel for extension

and sensitization messages, as well as for business and marketing operations for other
private sector players.
7.2.5.2 Develop More Efficient Fertilizers for Balanced Soil and Crop Nutrition
After the initial introduction of blended fertilizers during the 2019 PFJ program, the GoG
should encourage MoFA, in partnership with CSIR-SRI, SARI, universities, regulators from
PPRSD, and the private sector, to test and recommend more fully balanced fertilizer formulas
and blends to cover the entire country and all cropping systems. Soil nutrient deficiency
mapping is important for “prescribing” and formulating the right types of fertilizers that meet
soil and crop nutrient needs. Blending is a cost-effective way to incorporate the deficient
nutrients and also customize formulas locally to respond to demand, thereby addressing the
issue of blanket fertilization.
The Soil testing, Mapping, Recommendations development, and Transfer to farmers
(SMaRT) approach for balanced fertilizer recommendations in Ghana will include the
following activities/steps:
• Sustain and coordinate current and proposed efforts related to mapping initiatives from
various promoters, often using different but complementary approaches and methodologies
(soil maps, soil fertility maps, crop suitability maps, and crop coverage);
• Expand soil sampling and soil analysis to cover the entire country: comprehensive chemical
soil analyses, including all major, secondary, and micronutrients and pH/soil acidity, shall
be conducted by a reference laboratory using standardized analytical methods;
• Map nutrient deficiencies/toxicities or soil constraints to guide fertilizer formulation;
• Develop and validate formulation of balanced fertilizers: based on the soil nutrient
deficiency maps, “best-bet” site- and crop-specific fertilizers will be developed and
validated using nutrient omission trials to evaluate yield benefit and economic contribution
of addition of a given nutrient; and
• Transfer new balanced fertilizers to farmers, involving all stakeholders in the balanced site-
and crop-specific fertilizers development process. They will be encouraged and facilitated
to support effective technology transfer through partnership with extension services,
development partners, and the fertilizer industry, thus stimulating farmer demand through
demonstration.
7.2.6 Invest in Knowledge and Research Capacity in the Fertilizer Sector

• KP 1 – INCLUSIVE PARTICIPATION
• KP 2 – SPECIALIZATION
• KP 8 – APPROPRIATE AND QUALITY PRODUCTS
Lack of knowledge is another barrier to increasing the use of agricultural inputs and to
agricultural and economic development. From technical knowledge to business management
to regulations, customized trainings for the fertilizer supply chain actors and supporting
institutions/organizations will increase their capacity to serve as private extension agents and
better serve farmers as end users of the fertilizer.
Targeting more specifically the fertilizer supply chain stakeholders, demand-driven training
programs should be developed and/or expanded to address sector-specific issues.
To enhance fertilizer industry research and development, the following should be provided:

• Technical/operational management study tours and exchange visits for fertilizer plant
engineers and managers of fertilizer production, blending, and organic fertilizers
companies;
• Refresher training and new training for soil scientists and technicians to analyze soil, plant,
and fertilizer material for deficiency mapping and fertilizer recommendations
development; and
• Technical training for private sector blenders and agronomists, extension agents,
researchers, and NGO and donor technical staff on soil analysis, balanced fertilizer
determination, production, distribution, and use.
Towards public regulatory services:
• In-service training, retraining, and/or exchange visits for PPRSD fertilizer inspectors and
Pesticide and Fertilizer Regulatory Division (PFRD) staff on post-registration inspections,
sampling, evaluation of physical properties, sample preparation, preparation of reports, and
testing of fertilizer; and
• In-service training, retraining and/or exchange visits for fertilizer analytical staff of PFRD
on use and maintenance of laboratory equipment, sample preparation, methods and
procedures for analysis, and preparation of reports.
To stimulate the fertilizer industry, service providers, and public services, the following should
be provided:
• Training for security agencies, regulatory bodies, customs, extension agents, importers,
manufacturers, blenders, and clearing agents on the regional ECOWAS and Ghana
Fertilizer laws and regulations; and
• Updates on any change affecting the fertilizer subsidy program mechanisms and rules.
To strengthen distributors, agro-dealers, and extension services, the following are needed:
• Training (of trainers) of agro-dealers in business management, product knowledge, safe
product usage, handling, storage, and crop husbandry practices. The program will build on
the successful trainings developed and delivered by GAIDA, AFAP, and/or CropLife. As
much as possible, training certificates should be required by PPRSD to deliver fertilizer
distribution licenses to agro-dealers;
• Experiential classroom and hands-on field training for farmers, extension agents, agro-
dealers, and village-based advisors on the use of balanced fertilizers and integrated soil
fertility management (ISFM); and
• On-farm (cascade) demonstrations and farmer field schools for smallholder farmers on
responsible fertilizer use, including the 4Rs (right source, right application rate, right time
of application and right placement of fertilizer), alongside mass communication campaigns
(see section 7.2.9.3 on communication).
7.2.7 Offer Financial Incentives by Easing Access to Finance

• KP 7 – TIMELINESS
Financial reform should aim to provide incentives for the further development of local financial
markets and infrastructure (local savings and loans institutions) and financial instruments
(special savings accounts and loans for agriculture, crop insurance instruments, etc.). The GoG

should provide financial incentives, coupled with proper technical assistance to support the
agriculture production activities and market access, to guarantee returns to farmers and the
banks’ lending portfolios.
Specifically, for fertilizer value chain actors, the GoG and its partners should:
• Facilitate access to existing, effective financing mechanisms for manufacturers, importers,
blenders, and agro-dealers,19 including short-term financing facilities in foreign exchange
for the payment for imported fertilizer or fertilizer ingredients, and working capital for
agro-dealers to purchase fertilizer from importers and blenders;
• Explore additional and innovative financing mechanisms from the African Development
Bank’s African Fertilizer Financing Mechanism (AFFM) and from other inclusive finance
initiatives, such as value chain and/or Hub-Agro Dealer financing (AFAP), that can benefit
actors throughout the fertilizer value chain;
• Reduce risks associated with the provision of and access to investment and working capital
by working with Ghana’s risk-sharing initiative (GIRSAL), and promotion of other
instruments, such as crop and weather insurance and microfinancing; and
• Ensure fast and traceable payments from customers to suppliers along the entire value
chain. If needed, guarantee funds can also help avoid late payment to importers/distributors
of the subsidized portions of the fertilizer prices. Use of mobile banking systems should be
promoted for last-mile transactions.
7.2.8 Reduce Logistics Costs by Investing in Infrastructure

• KP 12 – SUSTAINABILITY
The most important policy measures aimed at public and/or government-induced private
investments are those to eliminate the physical isolation of markets due to a lack of
infrastructure, including transportation and productive infrastructure.
7.2.8.1 Reduce Port and Logistic Costs for Fertilizers

While the Port of Tema is one the most efficient and inexpensive ports in West Africa, it
remains relatively congested and poorly connected to good roads and affordable storage
capacity despite recent major investments in new infrastructure (new berths and a container
terminal). Reduction of waiting time at sea and at quayside will reduce demurrage and
operational costs incurred by the importers and will have a direct impact on costs of raw
materials and finished products, while increasing timely availability of fertilizers to farmers
who depend heavily on rains. We recommend that the GoG:
• Negotiate with Port of Tema authorities to dedicate a berth that can handle appropriate-
sized vessels (30,000 tons) for fertilizer operations and, when necessary (peak season for
fertilizer imports is currently March-May), grant fertilizer shipments priority over other
commodities, as recommended by all African governments in the Abuja Declaration
(2006);
• Accelerate improvement of road conditions in Greater Accra and specifically around the
Port of Tema. This will allow for more efficient and faster transfers of fertilizers from Port
19
Based on “Vetting of Existing Financial Models Suitable for the Fertilizer Value Chain in ECOWAS Zone.”
Workshop proceedings on Financial Mechanisms for the Fertilizer Value Chain in West Africa. West Africa
Fertilizer Program, Accra, Ghana, September 2016.

to Tema warehouses, using tippers for bulk product instead of cargos for fertilizer bagged
at quayside. Better roads will also allow operators to increase the discharge rates at the port
close to their maximum during peak seasons (up to 3,900 tons per day); and
• Accelerate current efforts to improve availability of large storage capacity (in bulk or bag)
at or around the Port of Tema and of logistics equipment and services (tippers, high capacity
cranes, electronic tracking, payment, and clearing systems).
7.2.8.2 Invest in Inland Road and Transportation Systems

The GoG should invest further in improving the current road conditions and in feeder roads
serving remote rural areas. These roads not only will help to bring fertilizer to the end user,
lower its cost, and increase productivity and production but also will allow farmers better
access to a local markets with the option to sell their production surpluses and increase their
income.
The main recommended transportation infrastructure investment involves repairing damaged
roads and constructing new roads, mainly feeder roads in rural areas, while exploring the
feasibility of implementing alternative transportation systems (railroad or waterways),
especially for the most remote rural areas in the northern regions, to reduce transportation
costs and give physical access to at least the nearest urban markets for their outputs and
productive inputs (e.g., fertilizer).
7.2.9 Improve the Business Environment in the Agriculture Sector

• KP 9 – COMPLEMENTARY INPUTS
7.2.9.1 Invest in Complementary Inputs

GoG should further invest in complementary inputs, such as seeds, soil, and water
management and conservation practices, and equipment that will allow and encourage better
use of complementary inputs, including improved seed varieties, proper mechanization
services, energy, etc.
Soil management involves improving soil structure by replenishing fertility and improving
organic matter and pH of the cultivated layer (possibly including liming programs), while
water management implies the conservation and management of rainforests (vegetation) and
their biodiversity as well as developing infrastructure for capturing rainwater to be used in
irrigation. Investing in this type of infrastructure will help in the efficient use of resources,
reduce the inherent risks of agriculture, and preserve the environment.
7.2.9.2 Develop Output Markets for Crops/Commodities

Farmers being able to sell their produce will encourage greater use of fertilizers to produce
more crops of the highest quality that meet local and international food safety and market
standards. Farmers also will have more income with which to buy inputs, such as fertilizer.
To this end, the FSP/PFJ should promote better agribusiness linkages and inclusive value
chain approaches in which all actors are integrated to expand the market for agricultural
produce and fertilizers. Priority should be given to:
• Enhancing farmers’ access to reliable and remunerative markets (including access to
customized market information, see below);

• Building farmers’ skills to effectively trade in structured markets and with private sector
off-takers and agro-processors (SMEs and large-scale operators; tripartite agreements with
fertilizer/agro-input suppliers);
• Facilitating farmer linkages to structured markets, such as the Ghana Commodity Exchange
(GCX), Ghana School Feeding Programme (GSFP), and the National Buffer Stock
(NAFCO); and
• Leveraging existing programs and incentives, such as the One District, One Farmers’
Market initiative, certification programs under the MoFA Green Label quality standards,
or Farmers’ Market aggregation centers.
7.2.9.3 Invest in Information and Communication

Lack of market information is often a major problem in remote rural areas. Most farmers in
these areas have no or very limited access to input and output market information. They also
tend to have limited technology and little knowledge on the use of inputs that would help
them to make better and more informed decisions on what to produce and how to produce it.
In the past decade, Ghana’s investments and policies have triggered the development of a
vibrant “ICT 4 Ag” (ICT for agriculture) sector. Boosted by mobile technologies, public
services, startups, and corporate services are providing technical and market information; this
should be expanded or leveraged to reach priority last-mile users and their local service
providers (agro-dealers, local/district public servants, and administration), with special
attention to youth.
In particular, in order to improve farmers’ perceptions and knowledge of fertilizer use:
• The GoG/MoFA should continue using mass communication programs (e.g., television,
radio, print media, interpersonal communication, road shows, social media, SMS
reminders, and household visits) for the general public and farmers to announce and inform
about the FSP’s launching and mechanisms, fertilizer products available and their use,
sensitization on risks of misuse and diversion, profitability of balanced fertilizers, etc.;
• The e-Agriculture platform, which was developed by the Extension Directorate of MoFA,
should be revamped and expanded to provide end users with more customized and demand-
driven messages related to fertilizer use, good agricultural practices, etc.;
• Private sector-led ICT tools and platforms (e.g., OCP’s school labs program, the Hubs and
Spokes and Distribution Partner models, Esoko, and mFarms) for managing and delivering
inputs and e-extension services at the community level should be encouraged and
promoted; and
• Advocacy campaigns should advocate for equitable access to productive inputs in the
fertilizer value chain for youth and women.
As far as fertilizer market information is concerned:
• The GoG/MoFA should enforce reporting requirements as defined in the Plants and
Fertilizer Act 2010 (Act 803) and monitor, at least on a quarterly basis, imports, exports,
production, sales, and estimated inventories of fertilizers;
• Regular monitoring, analysis, and publication of prices and market conditions for both
inputs and outputs on the local and international markets should be further developed and
made available to the various stakeholders along the value chain (e.g. SRID/Esoko market
information bulletins, AfricaFertilizer.org and Argus Africa reports, and similar
publications dedicated to fertilizer); and
• A detailed and regular (at least every three years) monitoring of fertilizer use by crop and
by type of fertilizer across the country will provide both the public and private sectors with
essential information on the level of adoption of new fertilizers to measure impact of
fertilizer use on crop production and farm revenues, design more targeted and efficient

business and product development strategies, and better estimate demand forecasts in the
short- and mid-terms.
Table 21 illustrates the alignment of the proposed recommendations with the smart subsidy
principles.
Table 21. Proposed Recommendations and Smart Subsidy Principles

Time
Key Recommendations Key Principles
Frame
Promote Inclusive and Fair Participation of Key
Business Actors in the Subsidy Program
§ Promote a more transparent selection of Short-term KP 1 – inclusive
participating companies, with results-based participation
performance contracts KP 3 – fair competition
§ Set prices and redefine profits and margins, using KP 6 – transparency
appropriate cost buildup and price structure analyses KP 7 – timeliness
§ Improve subsidy program’s timelines KP 11 – exit strategy
§ Set a lower limit for subsidy rate and program length, Short- to KP 12 – sustainability
or at least subsidies for particular populations medium-term
Promote a more transparent and collaborative
environment in the fertilizer sector
§ Encourage the creation of a Ghana Fertilizer Short- to KP 1 – inclusive
Platform for comprehensive and continuing public- medium-term participation
private sector dialogue KP 2 – specialization
§ Encourage the creation of the Fertilizer Industry KP 3 – fair competition
Association of Ghana KP 4 – efficiency
KP 6 – transparency
Enforce Fertilizer Regulatory Framework and Increase
Quality Control Capabilities
Support to the National Fertilizer Council and PPRSD Medium- KP 3 – fair competition
to: term KP 4 – efficiency
§ Enforce fertilizer quality control and policies KP 8 – appropriate and
§ Roll out standardized fertilizer testing systems quality products
§ Encourage self-regulation/quality promotion by the
fertilizer industry
-
Properly Target Beneficiaries (Farmers, Zones, and
Crops)
Register farmers for better targeting and monitoring: Short- to KP 4 – efficiency
§ Develop a comprehensive database of farmers medium-term KP 5 – better targeting
§ Develop concurrently a series of associated services (equity)
§ Update agro-dealer database KP 13 – accountability
-
Develop more efficient fertilizers for balanced soil and Medium- KP 1 – inclusive
crop nutrition: term participation
§ Sustain and coordinate current and proposed efforts KP 2 – specialization
§ Expand soil sampling and soil analysis KP 3 – fair competition
§ Develop and validate formulation of balanced
KP 8 – appropriate and
fertilizers
quality products
§ Transfer new, balanced fertilizers to farmers
-
Invest in Knowledge and Research Capacity in the
Fertilizer Sector with Demand-Driven Training
Programs

Time
Key Recommendations Key Principles
Frame
§ Enhance fertilizer industry research and Medium- KP 1 – inclusive
development term participation
§ Strengthen public regulatory services KP 2 – specialization
§ Strengthen distributors, agro-dealers, and extension KP 3 – fair competition
services KP 8 – appropriate and
§ Stimulate fertilizer industry, service providers, and quality products
public services
Offer Financial Incentives by Easing Access to Finance
§ Ease access to finance with development of risk Medium- KP 4 – efficiency
management instruments, loan guarantee programs, term KP 7 – timeliness
etc. KP 9 – proper incentives
§ Timely planning and implementation of program to
avoid/reduce delays
§ Management of interest rates
Reduce Domestic Logistics Costs
Reduce port and logistics costs for fertilizers by Long-term KP 4 – efficiency
investing in: KP 12 – sustainability
§ Dedicated berth at port of Tema for larger shipments
§ Road infrastructure in Tema/Greater Accra
§ Storage and warehousing capacity in key locations
§ Inland road and transportation systems
Improve the Business Environment in the Agriculture
Sector
§ Invest in complementary inputs Long-term KP 4 – efficiency
§ Develop output markets for crops/commodities KP 9 – proper incentives
§ Invest in information and communication KP 9 – complementary
inputs
7.3 Specific Recommendations for the 2019 PFJ Campaign

(Short-Term)
Following the public release of the call for application for the 2019 PFJ campaign on
November 7 and a presentation of early findings on November 12, 2018, of this study to MoFA,
other relevant elements of the GoG, private fertilizer suppliers, and technical and financial
partners, IFDC/EnGRAIS embarked on a two-week extensive consultation process with key
fertilizer suppliers and experts to design a series of recommendations for immediate action to
improve the efficacy and efficiency of the 2019 FSP. The main objectives of the
recommendations were to:
• Significantly reduce the magnitude of smuggling and diversion of GoG-subsidized
fertilizers during the current planting season;
• Ensure timely delivery of quality fertilizer by the industry and use by targeted beneficiaries;
and
• Ensure successful adoption by the farmers of the new crop- and site-specific formulas to
be provided by the FSP that will lay the foundation for a successful and complete shift from
blanket to balanced fertilizers in subsequent years, under the new GFEP.
These recommendations were developed to be:

• Easy to implement within a very short timeframe, since they required immediate decisions
and public announcements to allow fertilizer suppliers to adjust their procurement
processes and must be in place when the agricultural season began in the Southern regions
(March);
• Endorsed and owned by the GoG, the farmers, and the industry, with minimal cost and
risk and with maximum positive impact for all stakeholders involved; and
• Contributing to the longer term (re)vision of GoG/MoFA strategy and plans and aligned
with the smart subsidy guiding principles defined above.
7.3.1 Eight Measures Proposed for the PFJ 2019 Campaign

A series of eight recommendations were developed and presented for consideration and
discussion with GoG/MoFA representatives on December 3, 2018:
1. Labeling: Combine ECOWAS labeling rules and PFJ standards;
2. Bagging: Use 25-kg bags for PFJ subsidized fertilizers, at least in selected regions;
3. Coloring: Use colored bags for all PFJ subsidized fertilizers;
4. Pricing: Offer the same subsidized price for all NPK fertilizers for farmers, but pay
suppliers a premium for the most appropriate and/or best formulas based on agronomic and
economic efficiency;
5. Allocation: Give preference to fertilizer suppliers with demonstrated strengths (financial,
technical, logistics, and network);
6. Quality control: Conduct quality control checks at port, blending plant, and warehouse
levels;
7. Export permits: Allow the Ghanaian fertilizer industry to directly supply fertilizer demand
in Burkina Faso based on commercial demand and thus curtail the demand for smuggled
fertilizer; and
8. Information: Communicate PFJ 2019 measures to governments of neighboring countries,
the Ghanaian fertilizer industry, and farmers.
Table 22 provides more details on the proposed recommendations, their expected benefits and
risks, feasibility, and estimated costs.

Table 22. Eight Measures to Improve the Efficiency of the 2019 PFJ Program
Problems Actions Benefits Risks/Limits Feasibility Costs*
1 • Smuggling • Apply ECOWAS • More difficult to copy and sell original • No risks • Immediate • Very
• Quality control labelling rules for bags bags outside the country identified • Easy to limited
• Limited trust in new of subsidized fertilizers • Easy for farmers to identify to which crop implement (borne by
products by farmers • Add PFJ-specific marks it should be applied (already suppliers)
• Regional rules not as required • Help promote adoption of crop-specific partially • About
enforced blends by small-scale farmers done) U.S. $0.50
• Provide incentives/non-tariff barriers to per bag
local suppliers/blenders over
international traders
• Demonstrate commitment of MoFA and
Ghanaian suppliers to implement the
ECOWAS rules
2 • Smuggling • Use 25-kg bags, at least • Immediate identification of subsidized • Costlier to bag • Immediate • About
• Reaching the last in some regions prone to fertilizers and handle along • Easy to U.S. $1 per
mile smuggling (north) • Easier to move to the last mile and make the distribution implement if bag
• available to small-scale farmers chain announced
• May better serve women and the smallest • Can incite early enough
farms farmers to use to allow
• Costlier to smuggle less than suppliers to
recommended order 25-kg
rates bags
3 • Smuggling • Use specific-colored • Easy for farmers to identify PFJ products • No risks • Easy to • Very
• Quality control bags for subsidized • Provide disincentive for smugglers to sell identified implement limited if
• Limited knowledge fertilizers outside Ghana (immediately identifies combined
of small-scale • Note: Coloring actual them as smugglers) and for potential with #1
farmers on new PRODUCTS (at least buyers to pay a near-market price, and #2
products urea used straight and therefore limiting profits • About
in blends) was U.S. $0.50
considered too difficult per bag
to implement this year

4 • All NPKs are offered • Encourage suppliers to • Allow MoFA to select products based on • More complex at • Easy to • Costs can
and sold at the same offer different pricing economic and/or agronomic efficiency distribution/ implement at be
price for different grades (based on SRI results) voucher procurement estimated
• No premium or and subsidize the most • Allow private suppliers to optimize their management level based on
incentive to supply appropriate fertilizers, price offer based on their technical levels actual
best/most effective even if at a higher cost capacity (blend) and offers
blends for MoFA procurement/sourcing options
• Educate farmers and stakeholders on the
real cost and value as well as differences
between various blends
5 • Some companies • Select fertilizer supplier • Minimize risk from non-performing • Could limit the • Easy to • No
(mainly small) could transparently according suppliers, hence risk of farmers not number of implement at additional
not deliver fertilizers to their verified receiving fertilizers small/medium procurement direct costs
and services capacities • Facilitate monitoring of the performance local (MoFA)
• Disincentives for • Monitor/evaluate their of selected companies companies – but level
serious suppliers to performance more • Increased quality of associated services they will not
invest in the long- closely during necessarily be
term previous/upcoming cut out
campaigns
6 • Quality control of • Deploy spectral • Allow standardized basic but good level • Requires • Relatively • In the
new PFJ blends is analysis systems (e.g., of quality control at critical levels of the immediate action easy to range of
required CropNuts Labs) to supply chain to have a implement U.S. $1
certify PFJ 2019 • Batch markings will allow for further working system million to
fertilizer batches at port, investigation in the case of adulteration in place for the initiate
blending units, and and smuggling (traceability) upcoming season • Initial high
importer warehouses • Build confidence of stakeholders (4-5 month cost with
(upstream first) in Ghanaian fertilizer delivery time) long-term
quality and capacity to move toward benefit!
balanced fertilizers
• Set the stage for a full quality control
system in place for the 2020 FSP

7 • Difficulties • Facilitate delivery of • Allow supply of fertilizers to Burkinabe • No risks • Easy • No cost
obtaining export export permits for non- farmers based on market demand identified • Immediate
permits limit subsidized fertilizers to • Reduce demand for illegal supplies of
Ghanaian fertilizer registered and reputable subsidized fertilizers by Burkinabe
players supplying companies farmers
Burkina Faso, hence • Restore competitiveness of Ghanaian
encouraging suppliers in the region
smuggling of • Better control of authorized exports of
fertilizers fertilizers to Burkina Faso and other
countries
8 • Price/subsidy rate • Inform other • Ensure that Ghana and neighbors • No risks • Easy to • No
higher than for governments and (Burkina Faso, Mali, and Togo) are each identified implement significant
neighboring fertilizer suppliers in the aware of their respective [subsidy] • Immediate costs
countries, region about PFJ programs ahead of the planting season (can be done
encouraging program, • If possible, take joint action and with WAFA
smuggling implementation plans, coordinate better with police forces and and
• Late distribution of etc. other Ghanaian public agencies ECOWAS at
coupons • Aggressively publicize • Ensure that farmers claim their coupons the regional
2019 PFJ rules and early enough to allow suppliers to serve level)
availability of coupons them on time
to Ghanaian farmers and
stakeholders

Out of the eight proposed measures, five are considered high-priority measures for immediate
implementation, as summarized in Table 23.
Table 23. Priority Measures Recommended for PFJ 2019

Estimated Alignment Buy-In Potential Priority
Cost for with by the Impact on Measures
Proposed GoG and ECOWAS Fertilizer PFJ 2019 for PFJ
Measures Feasibility MoFA Guidelines Industry Campaign 2019
1 Labeling Easy Low High High High High
2 25-kg bags Easy Medium Medium Medium Medium Medium
3 Colored bags Easy Low N/A High High High
4 Pricing Medium Medium N/A Medium Medium Medium
5 Allocation Medium Nil High High High High
6 Quality Medium High High High High High
control
7 Export Easy Nil High High Medium Medium
permits
8 Information Easy Low High High High High
7.3.2 How MoFA Intends to Implement the Measures?

All eight measures were well received by MoFA, and all were at least partially implemented
during 2019:
• Labeling (product composition, weight [50/25 kg], manufacturer’s contact, guaranteed
analysis, source of nutrient in blends as required by ECOWAS, PFRD No., PFJ on the back
of the sack, PFJ logo on the front of the bag) and coloring (2-3 inch yellow band at the
base of sacks) will be mandatory on all PFJ fertilizer bags [measures #1 and #3];
• Differentiated buying prices was introduced this year, with higher buying prices accepted
to purchase fertilizers of higher quality (e.g., NPK 15-20-20 +/- Zn vs. NPK 15-15-15 or
NPK 20-10-10, whether blends or compounds) and for new blends procured in smaller
quantities (e.g., NPK 15-20-20 + 0.7 Zn for cereals, NPK 12-30-17 + 0.4 Zn for soybean,
NPK 17-10-10 for cassava). The selling prices to farmers, however, remained the same for
all types of subsidized NPKs [measure #2];
• MoFA immediately requested technical and financial offers to equip PPRSD with spectral
analytical capabilities to ensure controls at ports, blending plants, and warehouses,
provided that funding is secured [measure #6];
• Export permits were granted if conditions were fulfilled by exporter [measure #7]; and
• Sharing information and sensitization: Suppliers were prepared to share information
with MoFA and also help MoFA to sensitize farmers on blends; the Minister should call
for a high-level roundtable with his counterparts [measure #8].
Concerning measure #2, MoFA suggested that 25-kg bags would be mandatory for PFJ
subsidized fertilizers for the three northern regions only, where most of smuggling is thought
to occur. MoFA also initially suggested that, in these three regions, MoFA local
representatives at district level should be in charge of distributing fertilizers directly to the
farmers. In IFDC’s opinion, this would have had a very adverse effect on the industry and the
GoG could not be as effective at implementing these distributions as the private sector. By
IFDC’s count, there are (about) 52 districts in the three northern regions (Northern, Upper
East, and Upper West), and if MoFA has an office in each district, this would constitute a
maximum of 52 outlets. The main fertilizer suppliers have over 250 direct and indirect agro-

dealers distributing fertilizer, or five times more outlets available in these same districts. This
means that, in terms of accessibility, the industry is better placed to handle the distribution to
farmers. In addition, it is not practical to expect all farmers to travel to widely spaced MoFA
offices and transport heavy loads of fertilizers back, when private outlets are much closer to
them. Finally, as stated earlier, GoG officials have acknowledged that some of their own
representatives facilitate or are even actively engaged in smuggling. Direct distributions by
the GoG/MoFA would only exacerbate this problem, giving potential smugglers easy access
to the products.
As per ECOWAS guidelines, GoG/MoFA should avoid being a “competitor” in the inputs
value chain and allow the private sector to distribute and develop that space while engaging
with and regulating them to provide the necessary checks (stocks, coupons, quality
management, and regulation) to ensure timely and efficient operations in the three northern
regions or anywhere else.
Therefore, IFDC strongly recommended that MoFA partner with reliable, reputable, and
willing fertilizer suppliers to supply and distribute subsidized fertilizers in 25-kg bags in the
three northern regions. In line with the proposed measure #5, we recommend that, at least in
these three regions, MoFA allocate fertilizer quotas to a limited number of suppliers that
operate with a known and established network of agro-dealers and collaborate with them on
specific measures to ensure a smooth delivery mechanism and monitoring system that will
contribute to an effective reduction of smuggling to neighboring countries.
7.3.3 Preparing for the 2020 PFJ Campaign (Medium-Term)

In addition to the proposed measures above, IFDC also recommends further actions be
undertaken during the 2019 campaign in order to prepare for more in-depth and comprehensive
optimization of the 2020 subsidy program:
1. Monitor suppliers’ efficiency and performance under the PFJ/FSP in order to propose a
more transparent and informed selection process for suppliers in 2020;
2. Monitor acceptability and the economic and agronomic return on investments in new
fertilizer recommendations and formulas by farmers that will help in designing a tailored
sensitization program and in adjusting fertilizer recommendations as appropriate;
3. [Re]assess distribution and retailing network pattern and capabilities, in order to design
technical and financial capacity building programs for fertilizer suppliers and users (public-
private partnership mode);
4. Conduct an in-depth study of fertilizer use and demand by crop, in order to obtain a
detailed estimation of real and commercial demand for different types/specific fertilizers;
5. Build a farmers’ database based upon PFJ/FSP 2019 beneficiaries, in order to prepare to
transition from the current “push” (supply-driven) to a “pull” (demand-driven) program,
and from subsidizing fertilizers to subsidizing farmers beginning in 2020;
6. Encourage the fertilizer industry to create a national fertilizer association in order to
promote inclusive participation of fertilizer suppliers, importers, blenders, and main
distributors in consultations and decision-making regarding design and implementation of
the FSP and further optimization of the fertilizer value chain; and
7. Transform the current National Task Force initiated by the GoG into a National Fertilizer
Platform20 that would be responsible for coordinating the design and implementation of
the GFEP and Ghana’s subsequent fertilizer and soil health strategy and development
programs.
20
Options to set up such a platform can be learned from the Kenyan experience and its KeFERT platform. See
https://ifdc.org/kefert/ for more information.

8. Annex
Reference Documents/Bibliography
• AfricaFertilizer.org: https://africafertilizer.org/ghana/ pages
• AGRA. 2018. “Assessment of Fertilizer Distribution and Opportunities for Developing
Fertilizer Blends in Ghana.”
• Argus Bulletins on Nitrogen, Phosphate, Potash and NPK. Various issues. July – September
2018.
• ECOWAS/Government of Ghana. 2017. “ECOWAS Common External Tariff and Other
Schedules, Ghana.”
• FAO. 2005. “Fertilizer use by crop in Ghana.”
• Feed the Future Ghana Agriculture Policy Support Project (APSP). 2018. “Assessment of
Implementation of Planting for Food and Jobs (PFJ) Programme: Lessons and Ways
Forward.”
• Fuentes, P. 2017. “Transitioning from Government Control to a Larger Private Sector
Participation in the Ghanaian Fertilizer Market”. USAID-Feed the Future.
• Fuentes, P. 2015. “Literature Review on Supply Chain Analysis and Proposed Analytical
Framework for Fertilizer Cost Build-Up Studies in SSA.” IFDC.
• Ghana Ports and Harbours Authority. 2018. “Port Tariffs: Seaports of Ghana.”
• IFDC. 2017. “Improving the Design and Implementation of Fertilizer Subsidy Programs
in West Africa: Proposed Guidelines for Smart Subsidy Programs.”
• IFDC. 2016. “Fertilizer Cost Build up in Ghana Technical Report.” USAID-Feed the
Future.
• IFDC. 2015. “Ghana Fertilizer Market Assessment.”
• MoFA/SRID. 2018. “Agriculture in Ghana, Facts and Figures.”
• Port of Tema. Customer Guide to Tema Port Tariffs. www.ghanaports.gov.gh
• Quiñones, Esteban J., and Xinshen Diao. 2011. “Assessing Crop Production and Input Use
Patterns in Ghana – What Can We Learn From the Ghana Living Standards Survey
(GLSS5)?” Development, Strategy and Governance Division, IFPRI, Ghana Strategy
Support Program (GSSP) Working Paper No. 0024.

Methodology
Methodology for the Cost Buildup Study
To achieve the objectives of this study, the information and data collection process consisted
of surveying as many players and actors as possible along the fertilizer supply chain, from
importation to retail. During these surveys, we collected quantitative data and qualitative
information to corroborate the supply chain structure and its associated cost at each link of
the identified chain, taking into consideration importers, banks/financial institutions,
blenders, government agencies (Customs, Ministry of Agriculture, and others involved in
fertilizer supply through government programs), transporters, distributors, retailers, farmers
and farmers; organizations/cooperatives, researchers or research organizations; among other
relevant actors identified during the assessment.
To the extent possible, marketing margins were estimated as the differential between the cost
of delivery and sale prices at each stage of the supply chain. It is important to emphasize that
the purpose of the surveys was to identify not only tangible but also intangible costs;
therefore, the physical and other limitations faced by fertilizer supply chain players are not
allowing them to reduce costs and therefore reach higher operational efficiency, consequently
constraining their business development and expansion.
Part of the effort under this activity was to focus on identifying and visiting major
agricultural zones in Ghana where fertilizer is used to capture the diversity of production
zones and gather as much complementary information as possible to assist in explaining the
identified cost structure, e.g., condition of roads, road stops/weighbridges, storage facilities,
customs delay and costs, issues facing distributors, retailers, and farmers, etc.
Considering the small number of importer and blenders, the consulting team was able to visit
and interview most of them, in addition to government agencies (MoFA, Customs, the Port
Authority) and visit the port. In general, private importers and blenders were willing to
collaborate, responding to general questions and providing general information regarding the
market, subsidy program, and at times firm specific issues, but some were not able or willing
to provide data on the market and they were less inclined to provide information on their
business specifics. In addition, although their number is larger, a small number of distributors
and agro-dealers were surveyed in regions with a high concentration of agro-dealers, i.e., the
Ashanti and northern regions.
Some key considerations as a premise for the study:
• It is important to recognize that in Ghana, there is more than one fertilizer distribution
system, differentiated as private and public-private distribution systems, depending on the
level of government involvement in the supply chain through the fertilizer subsidy
programs and the different crops/agricultural activities (e.g., for cereals, cash/export crops
like cocoa, commercial crops like palm oil, and other food crops subsidized by the
government).
• Under these considerations, the costs of supplying fertilizer are differentiated mainly by
the distances of delivery, which defines the cost of transportation and the number of layers
involved in the supply chain that can determine the level and cost of financing at each stage
of the supply chain. Government involvement through the subsidy program can also
influence the cost of supplying fertilizer to farmers. For example, there will be a difference
between supplying fertilizer under the Ministry of Finance (MoF)/COCOBOD program for
cocoa, the MoFA subsidy program for food crops, and the supply of fertilizer to large
commercial plantations (i.e., palm oil and rubber), although importers and suppliers might
be the same for all types of deliveries.
• Regardless of the crop activity and government involvement, the focus of this study is on
the value chain for food and cash crops grown by smallholder farmers. The reason for

this focus is that they are the segment of the farming population in Ghana who are still
using negligible amounts of fertilizer per hectare of cropped area with low yields; therefore,
this is the segment from which growth in fertilizer use and consumption is expected to
emanate, which will lead to market growth and expansion, higher yield, and rural economic
growth. In addition, this is the segment of the population in which the government
programs, such as the PFJ presidential initiative, are focused on also.
Methodology for the Blending Section

In carrying out this study, the information and data collection process consisted of semi-
formal interviews of key stakeholders that influence the Ghanaian fertilizer value chain –
from importation to distribution/delivery to farmers. The interviews were conducted with
representatives the following organizations – OmniFert, GloFert, Yara, Chemico, Macrofertil
AMG, RMG, the Crops Directorate of MoFA, MoFA PPRSD, Global Haulage, Ghana Ports
and Harbours Authority, GRA Ghana Customs, Freight Forwarders, Peasant Farmers
Association of Ghana (PFAG), Ghana Agri-Input Dealers Association, AGRA, and IFPRI.
We also reviewed documents relating to the Ghana fertilizer value chain and subsidy by
AGRA and IFPRI. We reviewed assessments on development of fertilizer blends in Ghana by
IFDC and AFAP, as well as fertilizer recommendations and validations by CSIR-SRI. The
last two initiatives are funded by AGRA.
Methodology for the Subsidy Optimization Section

This section of the report provides a brief overview of the fertilizer subsidy program run by
the government over the 2015-2018 period.
The evaluation adopted an inclusive approach of obtaining and analyzing information from
all segments of the subsidy chain. Field visits were conducted to assess facilities used by the
various subsidized fertilizer distributors and learn first-hand their experience with the
program. Relevant stakeholders from both the public and private sectors were interviewed.
Data was also obtained from the participants for analysis. Challenges from all the sector
actors were collected, and their recommendations toward improving the program were all
noted.
Recommendations developed in this section take stock of previous analyses (AGRA, 2016)
and of the Regional Guide for Subsidy Programs developed in 2017 by IFDC under the
USAID West Africa Fertilizer Program that seek to improve the design and implementation
of subsidy programs in West Africa.

Essential Agricultural Statistics
Table 24. Cultivated Areas and Average Yields of Some Major Crops in Ghana
(2010-2015)
2010 2011 2012 2013 2014 2015
Area Yield Area Yield Area Yield Area Yield Area Yield Area Yield
Crop (x1000 ha) (mt/ha) (x1000 ha) (mt/ha) (x1000 ha) (mt/ha) (x1000 ha) (mt/ha) (x1000 ha) (mt/ha) (x1000 ha) (mt/ha)
Maize 992.0 1.9 1,023.0 1.6 1,042.0 1.9 1,023.0 1.7 1,018.9 1.7 880.0 1.9
Millet 177.0 1.2 179.0 1.0 172.0 1.0 161.0 1.0 162.3 1.0 162.0 1.0
Rice 197.5 2.3 197.5 2.4 189.5 2.5 215.9 2.6 224.5 2.7 233.0 4.7
Sorghum 253.0 1.3 243.0 1.2 231.0 1.2 226.0 1.1 226.9 1.1 228.0 1.2
Cereals 1,619.5 1,642.5 1,634.5 1,625.9 1,632.6 1,503.0
Cassava 875.0 15.4 889.0 16.0 869.0 16.7 875.0 18.3 888.6 18.6 917.0 18.8
Cocoyam 205.0 6.6 204.0 6.4 196.0 6.5 194.0 6.5 200.4 6.5 200.0 6.5
Plantain 328.0 10.8 336.0 10.8 337.0 10.6 340.0 10.8 356.6 10.6 363.0 10.9
Yam 385.0 15.5 204.0 28.7 426.0 15.6 422.0 16.8 428.0 16.6 430.0 17.0
Starchy staples 1,793.0 1,633.0 1,828.0 1,841.0 1,873.6 1,910.0
Groundnuts 353.4 1.5 356.8 1.3 345.2 1.4 328.9 1.2 334.3 1.3 336.0 1.2
Cowpea 167.0 1.3 182.3 1.3 168.8 1.3 162.0 1.2 165.7 1.2 163.0 1.2
Soybean 76.2 1.9 97.6 1.7 85.2 1.8 84.8 1.6 86.9 1.6 86.0 1.7
Legumes 596.6 636.6 599.2 575.7 586.9 585.0
Cocoa 1,600.2 1,600.3 1,600.8 1,650.8 0.5 1,683.8 532.3 1,717.4 555.2
Coffee 0.4 0.4 0.4 0.5 1.6 0.5 0.5
Rubber 25.5 25.8 26.0 26.8 0.8 27.4 27.9
Cashew 77.0 82.0 86.5 89.0 0.5 90.8 92.6
Oil palm 367.1 381.8 397.1 409.1 349.0 425.6
Coconut 25.2 25.3 25.3 26.1 26.6 27.2
Tree crops 2,095.4 2,115.6 2,136.1 2,202.3 2,291.1
Fruits 40.7 41.7 42.8 44.1 45.8
Vegetables 77.0 78.9 80.7 83.2 84.8 86.5
Source: Statistics, Research and Info. Directorate (SRID), Ministry of Food and Agriculture,-March 2017.
Table 25. Ghana 2017 Fertilizer Statistics Summary

Total Domestic Non-Fertilizer Agricultural Apparent
HS Code Product Imports Exports Availability Use Imports Consumption
3105200000 NPK 213,887 3,500 210,387 213,887 210,387
3102100000 Urea 88,510 88,510 251 88,259 88,259
3102210000 Ammonium sulfate 43,865 43,865 0 43,865 43,865
3101000000 Organic fertilizers 37,643 75 37,568 37,643 37,568
3103101000 TSP 26,766 26,766 26,766 26,766
3104200000 MOP 24,245 24,245 10 24,235 24,235
3104900000 Other K 3,301 3,301 0 3,301 3,301
3105300000 DAP 1,493 1,493 1,493 1,493
3102600000 Calcium nitrate 1,322 1,322 0 1,322 1,322
2530200000 Kieserite 1,064 1,064 1,064 1,064
3103900000 Other P 1,008 1,008 1,008 1,008
3105400000 MAP 608 608 608 608
3104300000 SOP 340 340 5 335 335
2510000000 Phosphate rock 203 203 203 203
2834210000 Potassium nitrate 125 125 125 125
2833210000 Magnesium sulfate 50 50 50 50
3105510000 NP compounds 40 40 40 40
3105900000 NPK unknown 17 17 1 16 16
3105600000 PK compounds 11 11 0 11 11
3102900000 Other N 5 5 5 5
3105700000 NK compounds 0 0 0 0
3102300000 Ammonium nitrate 73,056 73,056 73,056 0 0
3102500000 Sodium nitrate 330 330 330 0 0
3102800000 UAN 303 303 303 0 0
Totals 518,193 3,575 514,618 73,957 444,236 440,661

Detailed Structure of Fertilizer Distribution in Ghana
Currently, there are about 10 major importers and between 35 and 50 major distributors
that participate in the importation and distribution of subsidized fertilizer in Ghana, although
the government allocates import quotas among 29 businesses under the subsidy program. To
overcome the constraints associated with the relatively small fertilizer market in Ghana and
the small allocations among some of the businesses, some have entered strategic alliances for
joint importation to achieve economies of scale and reduce costs of procurement and
importation.
The main parastatal agricultural organization in Ghana is COCOBOD, which is the state-
run umbrella organization under the Ministry of Finance that covers more than 90% of
farmers involved in the production of cocoa. Cocoa production is concentrated in the central
region of Ashanti, the western part of the Brong-Ahafo region, and the northern part of the
Western region. Cocoa production is handled by thousands of small producers who also
produce staple food crops, such as maize. COCOBOD also has traditionally directly imported
their fertilizer used in the cocoa production; however, to improve efficiency and as part of the
government attempt to not interfere or disrupt private sector activities, COCOBOD has also
turned over fertilizer importation to the major importers in country. This fertilizer is
distributed to cocoa producers through the board’s own distribution network, located in the
cocoa-farming districts of the producing regions, under a unique system paid by their own
production and exports.
Plantations are large private operations to produce industrialized crops like palm oil, rubber,
fruits (banana, pineapple, mango), tobacco, and sugarcane. Plantations have typically been
involved in their own import and distribution of fertilizer for their own operation and provide
it to a selective group of large independent producers that work with the industry under
contractual agreement, which involves inputs supply and management with guaranteed output
price. Farmers not eligible to receive services and fertilizer from the plantation operation
must purchase it in the local market at the prevailing market price. Most recently, given the
large demand for financial resources, time, and logistics coordination involved, many of these
organizations have transferred most of the fertilizer imports operations to the main in-country
importers.
Wholesalers are located in most of the 10 regions in the country, with the major ones being
in the larger regional capitals, mainly Kumasi and Tamale, which are considered the main
distribution hubs for the northern and central regions (other than the Greater Accra region,
which is the national hub where the importers’ main operations are located). A large amount
of fertilizer distribution, estimated at a 75% of imports, takes place in Kumasi given its
central location, which explains in part the major concentration of distributors and retailers in
the Ashanti and Brong-Ahafo regions. Most distributors are independent businesses that work
with their own capital or under a bank line of credit. In a few cases, the most prominent also
work with credit from the importers. Very seldom, wholesalers provide credit to retailers, and
some may even have their own agronomist who makes farm visits, serving as extension and
sales agents in support of their own business operation and their associated retail network in
the rural area. Most distributor operations are a combination of wholesale and retail
businesses located in the major business centers around the country.
Retailers are small input and fertilizer shops typically located in most of the 158 districts in
the country. They sell their products directly to farmers in the typical 50-kg bags or in smaller
quantities, according to farmers’ needs. They are located within the peri-urban areas of towns
and villages to provide easy access to producers, still in most cases at a considerable distance
from the cropping farm area. There are more than 3,000 retail shops spread throughout the
country, with the highest concentration in the central regions of Brong-Ahafo and Ashanti,
where there is also a major concentration of farmers involved in the production of food crops,

mainly maize and cocoa. Retailers as well as farmers rely almost entirely on their own
finance, and in very rare cases, retailers may receive credit from the wholesaler. The
imported fertilizer follows all or just one of the three differentiated distribution channels
according to the end user: (i) the plantations and commercial/industrialized crops, (ii)
parastatal agricultural organizations, such as COCOBOD, and (iii) small farmers/producers
of staple food crops.
ECOWAS Customs Harmonized System Codes, Tariffs, and Taxes Applicable to

Fertilizers
Table 26. ECOWAS Customs Harmonized System Codes, Tariffs, and Taxes
Applicable to Fertilizers
CET
Heading TSN Commodity Description SU ID VAT IE
31.01 3101.00.00.00 Animal or vegetable fertilisers, whether or not kg 0 0
mixed together or chemically treated; fertilisers
produced by mixing or chemical treatment of
animal or vegetable products.
31.02 Mineral or chemical fertilisers, nitrogenous.
3102.10.00.00 • Urea, whether or not in aqueous solution kg 0 0
• Ammonium sulphate; double salts and mixtures of
ammonium sulphate and ammonium nitrate:
3102.21.00.00 o Ammonium sulphate kg 0 0
3102.29.00.00 o Other kg 0 0
3102.30.00.00 • Ammonium nitrate, whether or not in aqueous kg 0 0
solution
3102.40.00.00 • Mixtures of ammonium nitrate with calcium kg 0 0
carbonate or other inorganic non-fertilising
substances
3102.50.00.00 • Sodium nitrate kg 0 0
3102.60.00.00 • Double salts and mixtures of calcium nitrate and kg 0 0
ammonium nitrate
3102.80.00.00 • Mixtures of urea and ammonium nitrate in aqueous kg 0 0
or ammoniacal solution
3102.90.00.00 • Other, including mixtures not specified in the kg 0 0
foregoing subheadings
31.03 Mineral or chemical fertilisers, phosphatic
• Superphosphates:
3103.11.00.00 o Containing by weight 35% or more of kg 0 0
diphosphorus pentaoxide (P2O5)
3103.19.00.00 o Other kg 0 0
3103.90.00.00 • Other kg 0 0
31.04 Mineral or chemical fertilisers, potassic
3104.20.00.00 • Potassium chloride kg 0 0
3104.30.00.00 • Potassium sulphate kg 0 0
3104.90.00.00 • Other kg 0 0
31.05 Mineral or chemical fertilisers containing two or
three of the fertilising elements nitrogen,
phosphorus and potassium; other fertilisers;
goods of this Chapter in tablets or similar forms
or in packages of a gross weight not exceeding
10 kg
3105.10.00.00 • Goods of this Chapter in tablets or similar forms or kg 0 0
in packages of a gross weight not exceeding 10 kg

CET
Heading TSN Commodity Description SU ID VAT IE
3105.20.00.00 • Mineral or chemical fertilisers containing the three kg 0 0
fertilising elements nitrogen, phosphorus and
potassium
3105.30.00.00 • Diammonium hydrogenorthophosphate kg 0 0
(diammonium phosphate)
3105.40.00.00 • Ammonium dihydrogenorthophosphate kg 0 0
0 (monoammonium phosphate) and mixtures thereof
with diammonium hydrogenorthophosphate
(diammonium phosphate)
• Other mineral or chemical fertilisers containing the
two fertilising elements nitrogen and phosphorus:
3105.51.00.00 o Containing nitrates and phosphates kg 5 0
3105.59.00.00 o Other kg 5 0
3105.60.00.00 • Mineral or chemical fertilisers Containing the two kg 5 0
fertilising elements phosphorus and potassium
3105.90.00.00 • Other kg 5 0
Source: “ECOWAS Common External Tariff and Other Schedules, Ghana.” 2017
Import Process Flow

1. Importer registers his business and/or products with regulatory agencies online.
2. Importer obtains a unique consignment reference (UCR) number online.
3. Importer fills and submits import declaration form (IDF) online. IDF fee is paid
electronically via Ghana’s trading hub portal using mobile money card (Visa: Gh-Link) or
online banking.
4. Importer obtains required import licenses, permit, and certificate prior the arrival of goods.
Tariff controlling agency manager determines tariffs based on the Harmonized System
(HS) codes. Fees and charges may be paid using existing modes of payment or
electronically, as with the IDF fee payment.
5. Shipping lines, or their authorized representative, submit a manifest electronically prior to
arrival of goods. The manifest is shared in real time with the Ghana Ports and Harbours
Authority (GPHA)21 and all relevant systems/agencies. Amendments are carried out
online. Manifest is reconciled with the Customs Classifications and Valuation Report
(CCVR) declaration. Penalties may be paid using existing modes of payment or
electronically, as with the IDF fee and tariffs payments.
6. Importer applies for the CCVR online with electronic signature. Licenses, permits, and
certificates of regulatory agencies are mandatory for the CCVR application.
7. A risk clearance system determines selectivity of transactions for customs clearance.
Compliant Transactions are granted automatic customs clearance without scanning or
physical examination. Non-compliant transactions are subject to scanning and further joint
inspection.
8. CCVR is issued electronically and transmitted to all relevant agencies/systems.
9. Importer submits Bill of Entry online after transmission of CCVR, in which goods are
declared for bonded warehouse if applicable. The application is made online via the
bonded warehouse module, complemented by an inventory and bond management system.
Duties and fees may be paid using existing modes of payment or electronically via Ghana’s
trading hub portal using the same system as the IDF fee and tariffs payments.
21
GPHA: https://www.ghanaports.gov.gh/

10. The Ghana Revenue Authority (GRA)22/Customs releases consignment online.
11. Importer/agent submits a request electronically to the shipping lines for delivery of the
consignment with the original electronic Bill of Lading. Importer presents the paper Bill
of Lading to the shipping line to confirm title of goods.
12. Shipping lines issue an invoice to the importer for payment (invoice covers freight,
container deposit, demurrage, and administrative charges as necessary). Importers/agent
pays invoice value using the same system as the IDF and other fee payments.
13. After payment, the shipping line issues the Delivery Order to the terminal and the
consignees.
14. Importer makes a request to GPHA/Terminal/Inland Container Depot (ICD) to take
delivery of the consignment.
15. GPHA/Terminal/ICD assesses shipping line release status and ability to provide service
by required date. GPHA/Terminal/ICD generates an invoice.
16. Importer/agent makes payments to GPHA using the same system as the IDF and other fee
payments. Receiving bank will send the electronic payment receipt to
GPHA/Terminal/ICD.
17. GPHA/Terminal/ICD receives the payment. For compliant transactions, the cargo is
positioned for delivery and an SMS/email is sent to the importer/agent for pickup.
• Alternatively:
§ Goods of non-compliant transactions are scanned. If no anomalies found, the goods
are released. Otherwise, the goods are subjected to further joint inspection.
§ Consignment is jointly inspected by all required agencies based on HS codes.
§ If testing is required, testing will be conducted by a nominated testing agency based
on agency-agreed Service Level Agreements, on behalf of all with result shared
electronically.
§ If anomalies are found, compliance directives are issued.
§ Consignment is seized whenever compliance directives are not met and product
maybe properly disposed. In the case of fertilizer, an authorization for disposal is
requested by the MoFA, which may determine alternative uses of disposal.
18. GPHA/Terminal/ICD issues a delivery time, and an electronic notification is sent to
importer/ agent.
19. GPHA/Terminal/ICD generates e-waybill and sends copy to accompany cargo, which is
gated out at Exit Gate.
Movement of Cargo to ICD
§ Shipping line prepares and submits Import Container List (ICL) to GPHA for approval.
§ Shipping line creates Cargo Movement Report (CMR) on Ghana Integrated Cargo
Clearance System (GICCS) platform.
§ Customs validates CMR after acceptance by ICD. In case supplementary ICL is
required to be treated, the same process of submission and approval is followed as in
the main.
§ Import containers are loaded on ICD trucks from MPS/Terminal 1 en route to ICD
through Western Gate.
§ Customs and GPHA Security at Western Gate confirm the status of containers being
transferred on GICCS and validate same with trucks and driver ID.
§ ICD receives containers into stack and upload status on GCNet platform.
Source: https://www.ghanaports.gov.gh/Files/TEMAPORT/PaperlessRoadMap.pdf
22
GRA : http://www.gra.gov.gh/

Estimated Fertilizer Use by Crop (1990-1999)
Growth
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990-94 1995-99
%
NPK 1,275 n.a. 4,350 3,000 3,912 2,790 1,761 5,769 3,917 961 12,537 15,198
Urea 2,010 n.a. 0 0 0 425 95 185 50 0 2,010 755
MOP 0 n.a. 200 1,000 1,250 1,700 2,250 2,725 1,548 3,253 2,450 11,476
Oil palm 3,285 n.a. 4,550 4,000 5,162 4,915 4,106 8,679 5,515 4,214 16,997 27,429 5
Share 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.2 0.1 0.2
NPK 638 n.a. 2,175 1,500 1,956 1,395 881 2,885 1,959 480 6,269 7,599
AS 2,500 n.a. 11,500 7,600 8,500 9,000 5,320 10,700 13,265 4,800 30,100 43,085
Urea 16,080 n.a. 0 0 0 3,400 760 1,480 400 0 16,080 6,040
Other NPK 17,000 n.a. 3,000 0 0 0 2,830 17,850 8,800 400 20,000 29,880
Cotton 36,218 n.a. 16,675 9,100 10,456 13,795 9,791 32,915 24,424 5,680 72,449 86,604 2
Share 0.8 0.6 0.5 0.4 0.5 0.5 0.6 0.6 0.3 0.6 0.5
NPK 1,488 n.a. 5,075 3,500 4,564 3,255 2,055 6,731 4,572 1,121 14,627 17,731
KNO 0 n.a. 0 560 20 2,190 900 1,083 3,597 5,531 580 13,301
Urea 2,010 n.a. 0 0 0 425 95 185 50 0 2,010 755
Tobacco 3,498 n.a. 5,075 4,060 4,584 5,870 3,050 7,999 8,219 6,652 17,217 31,787 6
Share 0.1 0.2 0.2 0.2 0.2 0.2 0.1 0.2 0.3 0.2 0.2
NPK 850 n.a. 2,900 2,000 2,608 1,860 1,174 3,846 2,612 640 8,358 10,132
MOP 0 n.a. 200 1,000 1,250 1,700 2,250 2,725 1,548 3,253 2,450 11,476
Pineapple 850 n.a. 3,100 3,000 3,858 3,560 3,424 6,571 4,159 3,893 10,808 21,608 7
Share 0.0 0.1 0.2 0.2 0.1 0.2 0.1 0.1 0.2 0.1 0.1
Total 43,850 29,400 20,160 24,060 28,140 20,370 56,164 42,317 20,439 23,494 33,485 4
Source: MoFA, Crops Services, and Wienco.

Nutrient Removal Factors to Estimate Fertilizer Requirements
Nutrient Removal Incremental
Incremental (kg/mt of production) Nutrient
Crops Crop Removal
(METASIP target Production (¢000 mt
crops are bold) (¢000 mt) N P2O5 K2O nutrient)
Cassava 4,978 1.15 0.39 1.50 15.08
Maize 601 14.16 6.19 3.59 14.39
Yam 1,996 2.88 1.47 7.20 23.07
Rice 126 12.30 5.81 4.84 2.89
Total (METASIP) 55.43
Cocoyam 668 1.15 0.39 1.50 2.02
Sweet potato 234 5.20 2.30 10.00 4.09
Plantain 936 2.08 0.78 5.99 8.28
Millet 61 19.18 7.22 4.39 1.88
Sorghum 134 16.59 6.77 4.14 3.68
Soybean 16 59.03 13.84 16.69 1.43
Groundnut 128 39.64 7.48 6.27 6.83
Tomato (rainfed) 380 1.25 0.50 2.85 1.75
Tomato (irrigated) 408 1.25 0.50 2.85 1.87
Cashew nuts 9 28.00 7.40 6.44 0.38
Cotton 9 24.61 10.77 14.61 0.45
Coffee 1 40.00 5.00 52.00 0.10
Bananas 13 2.95 0.75 12.54 0.21
Sugarcane 57 1.00 0.63 1.75 0.19
Tobacco 1 28.00 5.00 52.00 0.08
Beans, green 9 37.15 10.56 16.31 0.58
Other crops 33.84
Total (all crops) 89.27
Data source: MoFA and authors’ calculations using removal factors from research stations.

2017 Fertilizer Subsidy Model of the Planting for Food and Jobs Program
Implementation Structure
Private Sector Government Agencies
Form D National
Importer Internal Audit
Secretariat
Waybill Monthly Report
Form B & C Finance
Distributor Regional Office
Directorate
Invoice Monthly Report
Form A
Retailer District Office
Daily Record Sheet
Farmers’
Passbook
Farmer
Source: MoFA, 2017

Fertilizer Allocations by Fertilizer Suppliers Under the PFJ Program (2015-2018)
Urea
Company 2015 2016 2017 2018 NPK 2018 2018
Chemico Limited 40,000 50,000 30,000 40,000 26,667 13,333
AMG Limited 20,000 40,000 45,000 50,000 33,333 16,667
Afcott Ghana Limited 20,000 40,000 35,000 36,000 24,000 12,000
Yara Ghana Limited 60,000 10,000 10,000 13,000 8,667 4,333
LDC (as Macrofertil in 2018) 20,000 10,000 10,000 8,000 5,333 2,667
Iddisal Company Limited 10,000 10,000 15,000 10,000 5,000
ETC Agro Ghana Limited 10,000 5,000 13,000 8,667 4,333
RMG 10,000 13,000 8,667 4,333
ETG Ghana Limited 20,000
OmniFert 15,000 3,000 2,000 1,000
Olam Ghana Limited 10,000
Centroid 5,000 5,000 3,333 1,667
Garnoma 5,000 3,000 2,000 1,000
Adwenkese 3,000 2,000 1,000
Agrovolex 3,000 2,000 1,000
Beft Agro 3,000 2,000 1,000
Chemplan 3,000 2,000 1,000
Chobi 3,000 2,000 1,000
Colvin Services 3,000 2,000 1,000
Demeter 3,000 2,000 1,000
Dizengoff 3,000 2,000 1,000
GloFert 3,000 2,000 1,000
Lumba Prod. 3,000 2,000 1,000
MC AGRO 3,000 2,000 1,000
Mes-Bre 3,000 2,000 1,000
Nanam Vent. 3,000 2,000 1,000
Nbula 3,000 2,000 1,000
Oklaw 3,000 2,000 1,000
Prime Pacific 3,000 2,000 1,000
Sidalco 3,000 2,000 1,000
Sub-total fertilizers 180,000 180,000 180,000 253,000 168,667 84,333
ACARP 7,000
Yayra Glover Ltd. 3,000
Sub-total organic fertilizers – – 10,000 – – –
Total fertilizers 180,000 180,000 190,000 253,000 168,667 84,333
Source: Adapted from MoFA.
300,000
250,000
200,000
Organic
150,000
Urea
100,000
NPK
50,000
-
2015 2016 2017 2018
Figure 24. Fertilizer Subsidy Allocations per Type (2015-2018)

Packages Provided in 2018 to Farmers per Crop at 50% Subsidy
Fertilizers Unit Cost Quantity Cost Cost
(50-kg bags) (GHS) (bags/ha) (GHS/ha) (U.S. $/ha)
NPK 68 5 340 74
Urea 63 3 158 34
SoA 40 3 100 22
5 bags NPK + 3 bags urea/ha 498 108
Fertilizer packages
5 bags NPK + 3 bags SoA/ha 440 96
Seeds of Field Crops Unit Cost Quantity Cost Cost

(1 kg) (GHS) (kg/ha) (GHS/ha) (U.S. $/ha)
Maize (OPV) 4 11.25 180 39
Maize (hybrid) 10 11.25 450 98
Rice 3.5 10 140 30
Soybean 5.5 11.25 248 54
Sorghum 2.5 11.25 113 24
Groundnut 5.5 11.25 248 54
Cassava 7.3 25 730 159
Vegetable Seeds Unit Cost Quantity Cost Cost

(100 g sachet) (GHS) (sachet/2 ha) (GHS/ha) (U.S. $/ha)
Tomato 29 188 110 24
Pepper 35 75 53 11
Onion 29 1,500 870 189
Cabbage 19 375 143 31
Carrot 22 450 198 43
Cucumber 24 300 144 31
Lettuce 19 425 162 35
Cost of Packages Cost Cost

Provided to Farmers (GHS/ha) (U.S. $/ha)
Pepper seed + NPK + urea 550 120
Lowest cost
Pepper seed + NPK + SoA 493 107
Onion seed + NPK + urea 1,368 297
Highest cost
Cassava cuttings + NPK + urea 1,310 285
Source: Adapted from MoFA.

Key Principles and Proposed Actions to Design Smart Fertilizer Subsidy
Programs
Below are 13 broad guiding principles to follow and 36 proposed actions on how to apply
them.
1 – INCLUSIVE PARTICIPATION
Promote private sector development and participation.
1. Involve key stakeholders during the design of subsidy programs (public-
private partnership).
2. Consult with all major actors or stakeholders during implementation to
document challenges that arise and their potential solutions as the process
evolves.
3. Promote private sector participation by making it easy to register as a business
and building their capacity.
2 – SPECIALIZATION
Roles of all participating actors should be defined and assigned on the basis of specialization
and comparative advantage to achieve complementarity and exploit potential synergies.
4. Focus Government interventions on the sovereign roles of the State related to
creating an enabling environment, setting relevant policy and regulatory
frameworks, and coordinating program implementation.
5. Establish regular consultation forums with countries with common land
borders to avoid adverse effects resulting from subsidy program
implementation (e.g., subsidized fertilizer sold across borders for profit due to
differences in prices resulting from different subsidy rates).
6. Leave production, importation, and distribution of fertilizers to the private
sector.
3 – FAIR COMPETITION
Promote competition between private suppliers in order to drive down costs of delivering
subsidized fertilizer and increase quality of services provided to farmers.
7. Establish fair, objective, and transparent selection system (tender).
8. Eliminate any barriers to entry into market by new fertilizer businesses.
9. Design a tender selection process that incentivizes the development of West
African suppliers (subregional, national and local) in a sustainable manner.
4 – EFFICIENCY
Use economic efficiency (cost reduction, profitability, economies of scale, etc.) as the basis
for fertilizer promotion efforts.
10. Favor market-based solutions that do not undermine incentives for private
investment.
In application of Article 1 (defining fertilizer “distributor” and “licensing”)
and Articles 11, 12, 13, and 14 (relative to functions of fertilizer producer,
importer, and distributor) of ECOWAS Regulation C/REG.13/12/12.
11. Encourage linking delivery of subsidized fertilizers with the more efficient
fertilizer and other input delivery systems associated with cash crops (cotton,
cocoa, oil palm, coffee, etc.), so that (i) cash crop producers also receive
fertilizer/inputs for their food crops and do not use those intended for cash
crops and (ii) other nearby subsidy beneficiaries receive fertilizers at the
lowest cost, ensuring higher productivity for all crops.
12. Establish results/performance-based and yearly assessed multi-year contracts
with selected suppliers to ensure timely fertilizer production, importation, and
distribution at affordable costs.
5 – BETTER TARGETING (EQUITY)

In pursuit of equity, improve targeting by using a mechanism/approach involving village
communities, local administration and authorities, and farmer organizations that ensures right
beneficiaries (producers, areas, and crops) are properly identified and effectively reached.
13. Give priority to/target farmers not using fertilizers but potentially profitable
(low credit but good fertilizer response), vulnerable producers and promising
supply chains, especially for food crops. Reliable agricultural census data may
be necessary.
14. Avoid/minimize displacement of commercial sales (crowding out) by
subsidized fertilizers that distort fertilizer markets. Avoid areas with already
established commercial private sector channels.
15. Avoid providing subsidy to areas with low fertilizer response rates; such areas
require research and extension on relevant technologies more than subsidies.
16. Use of voucher systems and other ICT tools to reach proper targets is a
workable option, through private sector participation.
6 – TRANSPARENCY
Ensure transparency in overall targeting and distribution system.
17. Monitor field distribution of subsidized product with the involvement of
village communities, local administration, representatives of target farmers;
compared to the current mainly manual systems, many new ICT-based ones
can more easily and better track field delivery of products to targeted
producers, if properly implemented and adapted.
7 – TIMELINESS
Rigorously plan and implement program early enough to avoid delays in timely delivery of
subsidized fertilizers at affordable costs, to reduce uncertainty and unpredictability with
subsidy programs.
18. Plan ahead the full program based on the crop calendar, and not on political
considerations, as is often the case, and respect and enforce deadlines from
program design to implementation. The early adoption of a national budget,
including that of agriculture, is a favorable step.
19. Publish information on subsidy timing, amounts of fertilizers and subsidy rates
to be adopted well ahead of the season; publish delivery dates and time in
advance of the season.
20. Clearly state and announce tender process and rules early enough, especially
announcement of subsidy well before planting time.
8 – APPROPRIATE AND QUALITY PRODUCTS
The formulations and quality of subsidized fertilizer should meet requirements established by
the relevant research recommendations and regional fertilizer regulations, respectively.
21. Ensure that the most updated fertilizer recommendations by crop and
agroecological zone exist for areas where the program will operate and that
the existing fertilizer private sector can produce/procure appropriate
formulations before tendering for fertilizers to be furnished by the program.
Support for the development of soil fertility and fertilizer recommendation
maps is necessary to determine these formulations.
22. Put in place conditions for adopting and enforcing ECOWAS fertilizer
regulations so that subsidized fertilizers meet quality (types, formulations,
weight, labeling, etc.) specifications.
23. Encourage balanced nutrition including micronutrients as reflected in the
products that are imported and/or blended for subsidy.
9 – PROPER INCENTIVES

Favor market-based measures that do not undermine incentives to private sector investments.
For example, delayed payment to suppliers affects (i) private sector investment in markets,
(ii) farmer participation in fertilizer markets and hence (iii) yields and area planted.
24. Consider options, including guarantee funds, to avoid late payment to
importers/distributors of the subsidized portions of the fertilizer prices.
25. Establish an “escrow” account where funds are set aside before the season to
be used strictly to pay importers and distributors in a timely manner; these
funds should be protected from withdrawal other than for the intended
purpose.
26. Use IT to better track allocated fertilizer to ensure it goes to intended
beneficiaries, for real-time verification, reconciliation, and reporting of sales
by distributors so that payment can made on time to suppliers.
10 – COMPLEMENTARY INPUTS
Promote fertilizer product as part of a wider strategy that includes complementary inputs (and
strengthening of markets).
27. Associate fertilizer with appropriate complementary inputs (seeds, equipment,
irrigation, integrated soil fertility management [ISFM], etc.) in a package to be
promoted, along with provision of proper information and training.
11 – EXIT
Devise a clear exit strategy to limit the time period of public interventions.
28. Embed a clear time- and objective-bound exit strategy that gradually moves
the program from current to future beneficiaries (producers, areas, crops) in
real need for subsidy until the program is completely phased out, since public
funds are limited and have competing needs.
12 – SUSTAINABILITY
To emphasize sustainability of gains in input use and crop yields as the goal when designing
the program, tie it to other public investments to support current beneficiaries and product
suppliers.
29. Link program to public investments that:
i. ensure access to other yield-enhancing inputs to research and advisory
services that maximize the efficiency and profitability of fertilizer use;
ii. encourage savings schemes and remove barriers to access
finance/loans by input dealers; and
iii. improve physical infrastructure (irrigation, transport, storage,
processing, and marketing) that increases the profitability of fertilizer
distribution and use and adds value to farm produce.
30. Fund program with domestic resources to improve efficiency and encourage
phasing out and eliminating unneeded subsidy programs.
31. Encourage increased participation of the private sector in subsidy programs
for sustainability of system.
32. Ensure that government provides regulatory and quality control oversight.
33. Encourage development of regional (ECOWAS) market for both produce and
inputs.
13 – ACCOUNTABILITY
Impacts of the use of public resources in the subsidy program should be objectively and
rigorously studied and established.
34. Establish regularly updated farmer/crop databases from reliable agricultural
censuses and continuous farm surveys.
35. Monitor program for reliable and accessible data on the basis of specific
indicator variables.

36. Conduct evaluations of entire program after each season to gather lessons
learned for improvement; possibly establish an independent technical
committee involving the public and private sector and the civil society to carry
out the impact assessment studies. This will assess performance/impacts
against measurable benchmarks (productivity, adoption, private sector
involvement, efficiency, etc.). M&E or cost-benefit analysis will reveal the
true costs of subsidy and deter over-invoicing on procurement, transport etc.
This exercise may lead to encourage private sector participation especially if
public funds are limited or constrained.
Source: IFDC, 2017

List of Companies/Institutions Met/Interviewed
No. Company / Individuals Location
1 OmniFert (Plant) Tema
2 GloFert (Head Office) East Legon
3 MoFA (Subsidy Program) MoFA
4 OmniFert (Head Office) Labone
5 Dangbe West Mango Farmers Association Ayikuma
6 Lawyer Farms (Mango) Somanya
7 Albe Farms (Pineapple) Nsawam
8 Macrofertil Tema
9 AMG Dzorwulu
10 Yara Ghana Airport Residential
11 PPRSD Airport
12 Chemico Tema
13 Global Haulage Achimota
14 Peasant Farmers Association of Ghana Kotobabi
15 Customs Tema Port
16 Agromonti Ltd. Madina, Accra
17 RMG Airport Residential
18 IFPRI CSIR Campus
19 GAIDA vice chairman Tamale
20 Badu Kaakyire (CEO) Kaakyire Agrochemicals Ltd.
21 Addai Frimpong (Accountant) Kaakyire Agrochemicals Ltd.
22 Kofi Sefa (CEO) Sefa and Jane Agrochemicals Ltd.
23 Alhaji Madasivu Amidu Gawal Agrochemicals Ltd.
24 Alhaji Baba Gonja (Leader) Amanten Farmer Based
Organization
25 Mr. Amaniampong Kyeiwaah Agro. Co. Ltd.
26 Asante Fabio Agrochemicals & fertilizer retailer
27 Dr. Dartey (Rice Researcher and Seed CSIR-CRI
Producer)
28 Emmanuel Boateng Yara Ghana – Mampong
29 James Kese (CEO) Jackess Agrochemicals Co. Ltd.

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Ghana Fertilizer Value Chain

Revised August 2019

3. FERTILIZER TRADE AND CONSUMPTION IN GHANA ........................................................ 10

4. FERTILIZER PROCUREMENT PROCESSES AND COST BUILDUP IN GHANA ...................... 20

5. DEVELOPING THE FERTILIZER (BLENDING) MARKET..................................................... 34

6. FERTILIZER VALUE CHAIN OPTIMIZATION ..................................................................... 43

Ghana Fertilizer Value Chain Optimization Study i

7. FERTILIZER VALUE CHAIN OPTIMIZATION ..................................................................... 54

Ghana Fertilizer Value Chain Optimization Study ii

Ghana Fertilizer Value Chain Optimization Study iii

Ghana Fertilizer Value Chain Optimization Study iv

CSIR Council for Scientific and Industrial Research

Ghana Fertilizer Value Chain Optimization Study v

Ghana Fertilizer Value Chain Optimization Study vi

Ghana Fertilizer Value Chain Optimization Study vii

Ghana Fertilizer Value Chain Optimization Study viii

Ghana Fertilizer Value Chain Optimization Study ix

3. Fertilizer Trade and Consumption in Ghana

Ghana Fertilizer Value Chain Optimization Study 10

Figure 1. Strong Growth of Major Fertilizer Markets in Sub-Saharan Africa

Ghana Fertilizer Value Chain Optimization Study 11

MOP (Israe l - FOB bulk)

Ghana Fertilizer Value Chain Optimization Study 12

Ghana Fertilizer Value Chain Optimization Study 13

3.2 Fertilizer Trade and Consumption in Ghana

Ghana Fertilizer Value Chain Optimization Study 14

Ghana Fertilizer Value Chain Optimization Study 15

Source: AfricaFertilizer.org, 2018

40,000 40% China

Figure 7. Country of Origin of Fertilizers Imported in 2017 and Breakdown by

Ghana Fertilizer Value Chain Optimization Study 16

3.2.2 Improvement in Timing of Imports

Figure 8. Ghana Fertilizer Monthly Cumulative Imports (2013-2017)

Ghana Fertilizer Value Chain Optimization Study 17

Figure 9. Crop Calendar for Food Crops

3.2.3 Structure of Fertilizer Distribution in Ghana

International Fertilizer Suppliers

Importers (with blending units )

Yara Chemico AMG AFCOT OmniFert MacroFertil Others

20% 10% 60%

Out-Growers/Small-Scale Farmers Small-Scale Farmers

Figure 10. Illustration of the Fertilizer Distribution in Ghana

Ghana Fertilizer Value Chain Optimization Study 18

Table 3. Main Fertilizer Importers in 2017

3.3 Fertilizer Consumption per Crop

Table 4. Estimated Distribution of Fertilizer Sales by Regions (1997-2001)

Ghana Fertilizer Value Chain Optimization Study 19

Figure 11. Estimated Fertilizer Use by Crop and by Product

4. Fertilizer Procurement Processes and Cost Buildup in

Ghana Fertilizer Value Chain Optimization Study 20

4.1.2 Duties and VAT

4.2 Fertilizer Supply Cost Buildup

4.2.1 Costs of Importing Fertilizers through the Port of Tema

Ghana Fertilizer Value Chain Optimization Study 21

Ghana Fertilizer Value Chain Optimization Study 22

0 50 100 150 200 250 300 350 400 450

FOB (bulk) CIF

Figure 12. FOT Cost of Importing Urea in Ghana (U.S. $/mt)

Ghana Fertilizer Value Chain Optimization Study 23