Hardly any merchant ships are passing through the Strait of Hormuz amid the blockade that has been going on for more than two months. Africa is bearing the full brunt of the conflict in the Middle East, with canceled flights, long lines at petrol stations and barren fields across the continent.
The fertilizer industry has also been deeply affected by the crisis, without access to a significant portion of its global supply chain.
Any resumption of free maritime traffic through this strategically important strait – as was the case before the US-Israeli attacks on Iran earlier this year – is still a long way off; And even then, it will take several months for the market to stabilize and production lines and logistics to return to normal.
It is understandable that African institutions and governments are currently operating in a state of crisis, and there is no end in sight to the blockade. Some are also looking for ways to prevent more serious consequences, such as the risk of famine or national bankruptcy.
Willy Nyamitwe, Burundi’s African Union (AU) ambassador and current chair of the Standing Committee of Ambassadors, told DW that the AU is “monitoring the situation around the Strait of Hormuz very closely because it affects a number of strategic objects that are essential for African economies.”
Since many African countries are already heavily in debt, the possibility of inflation-induced depreciation of national currencies as a result of the Iran war could worsen the situation.
“The situation is critical,” said Anja Beretta, director of the Africa economic program at the German Konrad Adenauer Foundation in Nairobi, Kenya.
“Especially when it comes to fertilizers, we were already facing a similar situation in 2022 when Russia launched a war of aggression against Ukraine; after all, Russia and Belarus were the two most important fertilizer producers.”
Beretta told DW that fears that there would be famine in parts of Africa did not materialize. He said that at the time, African countries had responded with a flexible approach, for example by providing financial assistance through the African Development Bank.
emergency response to fuel shortage
The current crisis of fossil fuel shortages has already paralyzed many parts of the continent.
In Ethiopia, diesel is now preferred for public transport, leaving private customers without petrol; In Juba, the capital of South Sudan, rolling blackouts are being used to reduce the output of the country’s oil-fired power plant.
The Gambia has begun subsidizing the fuel, with more than €5.8 million (about $6.8 million) in tax revenues, while Zimbabwe has turned to blending fossil fuels with ethanol.
Africa’s aviation industry is also being hit hard by the global kerosene shortage, disrupting flight operations across the continent.
Shortages of chemical fertilizers and steep price increases during the Hormuz crisis have received less attention, but are nevertheless equally important.
Before Iran began, about half of the sulfur used in phosphate fertilizers globally passed through the Strait of Hormuz. The proportion of chemical precursors urea and ammonia was also high.
South African Grain Producers Association, Grain SAreported that ammonia prices in April were already 75% higher than a year earlier. Urea was also said to be about 60% more expensive.
efficient short term solutions
National emergency protocols for shortages of diesel, petrol and kerosene have been in place in many countries since the start of the Iran war. However, similar solutions for fertilizers have yet to fully materialize.
An initiative led by UN Secretary-General Antonio Guterres, which called on the warring parties to allow the transit of fertilizers to developing countries through the strait, has not yet been implemented.
The model for this idea is the Black Sea Grain Initiative, which enabled the safe export of Ukrainian grain from July 2022 to July 2023 with Russia’s approval to prevent food shortages.
There is another quick-fix solution that has also proven effective in times of crisis: African importers could pool their fertilizer purchasing efforts – in the same way that the EU leveraged its market power to ensure rapid and affordable supplies of COVID-19 vaccines.
Beretta believes this is a realistic option that would also be easy to implement: “We’re not talking about technical capabilities or financing; African countries just have to say, ‘Let’s do this together now.'”
Even if a comprehensive solution to this end through the AU fails, regional communities such as the West African ECOWAS or the East African Community may still achieve success in this area.
Based on their agricultural surface footprint, countries in sub-Saharan Africa already use very little fertilizer: according to data from the Food and Agriculture Organization of the United Nations (FAO) and the World Bank, farms in the region use an average of 20.5 kg of fertilizer per hectare, compared to a global average of less than 144 kg.
it world bank The data, however, is for 2021, before the start of the war in Ukraine, and will likely be adjusted somewhat over the past five years.
If fertilizer use in Africa falls even further, there is a risk that yields of staple foods such as maize, rice and wheat will be reduced, leading to food inflation. Africa therefore needs urgent fertilizer supplies, as the next planting season has already started in most places.
Long-term solutions are not completely out of reach
To be less vulnerable to external threats such as wars in Ukraine and Iran in the long run, the safest strategy would be to increase domestic fertilizer production capacities.
The current major players in the region are Morocco and Egypt, both of which have large phosphate reserves but are also dependent on sulfur imported from the Gulf states for production.
Nigerian Dangote Group intends to expand production, and plans to open new urea plants in Nigeria and Ethiopia.
Beretta believes the best approach is to produce and distribute fertilizers on a large industrial scale to a few select locations throughout Africa.
“Not every country has ideal conditions to set up its own fertilizer production. This is where regional supply chains play a very important role; you need to identify three or four countries in a region where conditions are such that fertilizer production can be set up, and then they start supplying the entire region,” he said.
low trade barriers
This is where the African Continental Free Trade Area (AfCFTA) will come in handy – because when products are not stopped at national borders for customs duties, the potential for private investors to step in increases significantly.
Although the AfCFTA is in force since 2021, various barriers under its provisions continue to hinder the smooth cross-border movement of goods.
“AfCFTA is a central part of the solution,” said AU Ambassador Nyamitwe. “At the African Union, we believe that through accelerated implementation of the AfCFTA, African states can create more resilient regional value chains in critical sectors such as agriculture, energy, health and manufacturing.”
This article was translated from German.