Following the unravelling of plans to establish a jointly owned fertiliser manufacturing plant in East Africa, the race is now on as Kenya and Tanzania compete to invest in separate factories.
As Kenya seeks to bring on board an investor to build a manufacturing plant at an estimated cost of $350-million, Tanzania has joined the fray with intentions to establish its own factory to support an ambitious nationwide agriculture revolution, dubbed Kilimo Kwanza (Swahili for Farming First).

Following the failure of a joint venture involving all the five East Africa Community (EAC) member States, Tanzania proposed to partner with Uganda, but that also hit a snag owing to disagreement over the capital to be contributed by each party, the ownership structure and the plant’s location.

The State-owned Tanzania Petroleum Development Corporation (TPDC) has put out a tender inviting prospective investors to establish an ammonia/urea fertiliser plant in the Mtwara-Lindi region. The plant will use natural gas from Mnazi Bay.

“Prospective investors must provide information indicating that they are qualified to set up a fertiliser plant,” says the TPDC.

The move by the authorities in the East African nation came days after Norwegian fertiliser company Yara International announced that part of its long-term plan in Tanzania is to invest in a fertiliser manufacturing plant.

Yara Tanzania country director Pal Oystein Stormorken says that, after three years of operations in the country, the company is mulling the establishment of a manufacturing plant.

“We are thinking of a large-scale fertiliser plant not only to supply Tanzania but also to export to other East African countries and the rest of Africa,” he says.

Yara International says it is the world’s largest producer of ammonia, nitrate and complex fertiliser, commanding about 20% of the global ammonia trade.

Tanzania says it aims to secure stable fertiliser supply and cushion the country from volatile prices on the international market.

Three years ago, the Tanzania government launched the Kilimo Kwanza project to transform peasant farming into modern agriculture but the initiative has yet to bear significant fruit owing to numerous challenges, including a lack of access and high fertiliser prices.

Growth of the agriculture sector in Tanzania has been sluggish, averaging 4% a year, compared with an average gross domestic product growth rate of 6.5% a year. Over 75% of the country’s 46- million people depend on agriculture for their livelihoods.

Fertiliser demand in Tanzania currently stands at about 300 000 t/y and is expected to increase to 420 000 t/y by 2020 and to over 550 00 t/y by 2030. Farmers in the country use about 10 kg of fertiliser per hectare, way below the 45 kg/ha world average.

In Kenya, government has already carried out a feasibility study that showed that investing in a manufacturing plant would reduce the cost of fertiliser by between 30% and 40%. The country intends to set up a factory with a capacity of 350 000 t/y by 2015.

Fertiliser consumption in Kenya stands at less than 500 000 t/y, with farmers using 25 kg/ha. Government hopes to increase fertiliser use to 70 kg/ha in the next five years. Demand in Kenya is expected to rise to about 600 000 t/y by 2020 and 680 000 t/y by 2030.

Establishing two fertiliser plants in East Africa is expected to lead to an oversupply of the commodity. The decisions by individual nations to opt to invest in their own plants are contrary to the EAC Treaty. Article 105 of the treaty requires member States to cooperate in boosting food secu- rity and agricultural production within the bloc.