The Board of Directors of the African Development Fund, the concessional window of the African Development Bank Group, has approved a $14.4 million loan to enhance food security in Zambia, a key supplier to countries in the region.
The financing is anchored in the African Development Bank Group’s African Emergency Food Production Facility. In Zambia, it will provide certified seeds and fertilizer to 45,000 emergent farmers, using innovation and ICT platforms via existing private sector-based distribution channels. Women and youths will receive 50%-subsidized seeds through an electronic platform that enhances transparency, accountability and sustainability. The project will promote proven climate-smart agricultural practices employed by the Bank’s Technologies for African Agricultural Transformation initiative (TAAT). Another outcome will be the implementation of agriculture and trade policy reforms.
Farmers are to receive 36,000 metric tons of fertilizer and 3,000 metric tons of improved seeds, as part of the expected outcomes. In addition, farm gate fertilizer prices will be reduced by 50%. Thirdly, a partial credit guarantee scheme will result in over 100,000 metric tons of fertilizer on the local market and stabilize prices. Over 90,000 hectares of maize and soya will be planted, with an incremental annual output of 265,000 metric tons valued at $43.72 million. This will reduce potential food imports by 200,000 metric tons. The average farm income will rise from $350 to $500 per year.
Like elsewhere on the continent, the Russia-Ukraine conflict has affected Zambia, with a spillover inflationary impact across various sectors. The average cost of the Basic Nutrition Basket increased from around $385.50 to over $510 between February and April 2022. Farm gate fertilizer prices averaged between $50.55 and $60.65 per 50kg bag in 2022 from an average of around $30.30 the previous season.
At the same time, the country anticipates a reduction in the staple grains output in 2022/23. Zambia produced 2.7 million metric tons of maize in 2022, around 600,000 metric tons less than in 2021. Furthermore, high demand from food-deficit neighbours may induce shortages.