Economic Analyst Urges Timely Delivery of Farming Inputs for Positive Fiscal Impact
Economic expert Mr. Kelvin Chisanga has highlighted the crucial importance of ensuring the timely delivery of farming inputs to bolster Zambia’s fiscal performance in the coming year.
Despite challenges posed by climate change, Mr. Chisanga emphasized that addressing this issue should be a top priority and treated as a matter of critical urgency.
He revealed that Zambia’s annual fertilizer requirement is approximately 850,000 metric tons, with a total value of around USD 400 million. A significant portion of this amount, constituting 50% of the Ministry of Agriculture’s budget share, goes into the Farmer Input Support Program (FISP).
The introduction of an agriculture credit window aims to diversify participation under this scheme, allowing for a broader range of involvement from commercial banks.
Currently, Zambia has over 6 million small-scale farmers producing about 2 million metric tons, contributing to a total tonnage of 3.7 million metric tons when combined with other players in the sector. To achieve sustainable agricultural growth, the country needs to produce 5.6 million metric tons.
Given that maize is Zambia’s principal cash crop, and it demands a significant intake of fertilizer, the United Capital Fertilizer is poised to be the largest manufacturer, with an anticipated annual production capacity of about 2 million metric tons.
Mr. Chisanga highlighted the positive prospects for the domestic economy with irrigation development plans supported by the World Bank.
The agriculture sector is expected to experience a significant upturn as policymakers advocate for year-round farming activities. The uptake of fertilizers is deemed crucial in this value chain.
While half of the Ministry of Agriculture’s budget goes into the Farmer Input Support Program (FISP), there is a push to expand and rebrand it as the Comprehensive Agriculture Support Program (CASP).
However, Economist Chisanga pointed out loopholes in the system, such as subsidized fertilizers being sold back into the market, causing market distortions.
The analyst stressed the need to educate small-scale farmers to increase production tonnage, emphasizing that they should view farming as a business.
He further expressed concerns about the liquidity challenges faced by the Nitrogen Chemical of Zambia, estimating a need for USD 30 million for recapitalization.
Additionally, he highlighted the absence of a national fertilizer policy in Zambia, urging authorities to address this gap.
