Supporting Reforms to Ghana’s National Fertilizer Subsidy Program Yields Results

A team of representatives from EnGRAIS, GoG, and MoFA at the YARA fertilizer blending plant site in Tema, as part of the Ghana Fertilizer Value Chain Optimization Study activities.

Many West African countries are finding ways to make their national fertilizer subsidy programs work effectively and efficiently to support and improve national agriculture agendas across the region. The Government of Ghana (GoG)/Ministry of Food and Agriculture (MOFA) has been implementing a national fertilizer subsidy program to support its flagship Planting for Food and Jobs (PFJ) program to boost agricultural productivity and improve the living conditions of smallholder farmers across the country, but the government has been seeking further support to make the program “smart” to benefit, particularly, vulnerable rural populations.

The Feed the Future Enhancing Growth through Regional Agricultural Input Systems (EnGRAIS) project for West Africa has been working to improve and harmonize fertilizer policy and regulatory systems across West Africa, in accordance with guidelines of the Economic Community of West Africa States (ECOWAS). This included devoting key resources during 2018 and 2019 in Ghana to facilitate reforms in the PFJ fertilizer subsidy program. It was clear that Ghana was ready to move forward, and the IFDC’s experience has shown that piloting and succeeding with key reforms in one country can facilitate similar changes in the programs of other countries in the region.

Based on this, EnGRAIS has facilitated key reforms in the GoG’s flagship PFJ fertilizer subsidy program through use of EnGRAIS’s Regional Fertilizer Subsidy Program Guide (RFSPG), which describes the 13 smart subsidy principles and the 36 associated actions to design new or reform existing fertilizer subsidy programs. In addition, at the request of GoG/MoFA, EnGRAIS conducted the Ghana Fertilizer Value Chain Optimization Study (GFVCOS), which provided updated and much needed information on fertilizer development and the subsidy program.

“We have seen significant improvement on the ground, especially with the smart subsidy principles and related actions elaborated in the Regional Fertilizer Subsidy Program Guide developed by the IFDC/EnGRAIS, the content of which will soon become an ECOWAS Directive,” said Seth Osei-Akoto, Director of Crop Services, MoFA, in a letter of appreciation.

The GoG adopted key recommendations from the RFSPG and GFVCOS in its 2019 fertilizer subsidy program, including introducing more balanced, blended fertilizers; clear labeling; color coding and resizing bags to differentiate subsidized from non-subsidized fertilizers; paying suppliers more for improved quality; and sharing and discussing key information with suppliers and beneficiaries. EnGRAIS also has pushed for further reforms for the 2020 program, including beginning the transformation from a supply- to a demand-driven program that is fully receptive to farmer beneficiaries’ needs. EnGRAIS’s support to the GoG in reforming its 2019 subsidy program has resulted in accomplishments which have the potential to make more balanced fertilizers available, affordable, and accessible to farmers, and make private sector participation in the program more competitive. These reforms include:

  • Reduction of smuggling of illegal exports at the Ghana-Burkina Faso border by 60% (15,000 MT);
  • Increased participation of the private sector in improving the design and implementation of the subsidy program;
  • More timely calls for tenders, enabling the private sector to better plan and source appropriate fertilizers resulting in on-time delivery of fertilizers;
  • Progressive shift toward more balanced crop nutrition through the inclusion in the tender of crop- and site-specific balanced fertilizers containing secondary and micronutrients; and
  • Better pricing structure, paying a premium to private sector suppliers to produce and provide micronutrient-enriched fertilizers to farmers.

“We trust that by improving our subsidy program, we will improve the livelihoods of our farmers and adequately feed our population. Our success may also serve as a blueprint for our brothers and sisters of the ECOWAS region, who are facing similar challenges in designing and implementing efficient and effective subsidy programs,” said Osei-Akoto.

EnGRAIS’s goal of contributing to improved sustainable agricultural productivity and inclusive growth for West Africans, and the more specific objective of improving and harmonizing fertilizer policies across West Africa, offers the project the opportunity to collaborate with national governments in the ECOWAS region, including Ghana, to improve their subsidy programs for the benefit of millions of vulnerable poor populations, whose livelihoods depend on agricultural production and productivity.