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Speeches & TranscriptsSeptember 21, 2022

Remarks by World Bank Group President David Malpass at the High-Level event on access to grains and fertilizers in Africa during UNGA 77

Thank you, Presidents Macron and Sall.

Good morning, everyone.

The global food, energy, and fertilizer crisis is taking a toll on developing countries. These sectors are closely interlinked.

Natural gas is used both as a feedstock and energy source in the production of ammonia, accounting for 70 to 80 percent of ammonia production costs. The rapid increase in gas prices has turned into an increase in fertilizer prices, with fertilizer prices tripling over the past two years. Last Friday, we released our Food Security Update – despite the recent stabilization of agriculture prices and the resumption of grain exports from the Black Sea, high food inflation and food security remain a critical concern.

The challenge is meeting the immediate demand for fertilizers to support next season’s crops. Current projections suggest that Africa’s unmet demand could reach four million metric tons this year, with West Africa facing the most acute challenges this growing season.

Action needs to be taken now to maintain food production by making fertilizers more accessible and affordable. There are three points here that I would like to emphasize.

The first is supporting efficient production and trade. We issued a joint statement together with FAO, IMF, WFP, and WTO this morning on food security, highlighting the importance of open trade, transparency, innovation and joint planning, and investing in food systems transformation. In April, we made up to $30 billion available over a period of 15 months to respond to the food security crisis. This financing includes efforts to encourage food and fertilizer production, enhance food systems, facilitate greater trade, and support vulnerable households and producers through social safety nets.

With many food support programs underway, good coordination is important to avoid fragmentation of aid efforts. 

We welcome the clarifications of relevant regulations provided by the EU on Monday to allow critical agricultural inputs such as fertilizers to move swiftly to countries in need. Preserving open trade is key to reducing price distortions that dilute incentives for efficient production.

Second, the financing needs of countries, manufacturers, traders, and importers must be addressed. In some cases, the financing needs for fertilizer buyers have tripled, amplifying the general scarcity of local commercial bank financing in many of these markets. Short-term credit facilities provided with the support of the IFC, and other international development agencies are helpful to address this problem.

Debt relief is a vital source of financing and especially valuable with interest rates rising. I met this morning with the President of Zambia to discuss the urgency of completing the Common Framework memorandum of understanding (MOU) by the official bilateral creditors and subsequent agreements with commercial creditors, preferably by the time of the IMF/WBG Annual Meetings next month.

Finally, fertilizer use must be made more efficient. This can be done by providing farmers appropriate incentives that do not encourage overuse. Nitrogen use efficiency, for example, ranges from 30 to 50 percent in general, while the recommended efficiency is 90 percent. Subsidies that encourage excessive use of fertilizers also encourage wastage. We must also invest in innovation to develop best practices that will help increase output per kilogram of fertilizer used. This includes investing in knowledge to ensure the best suited fertilizer and quantity are applied to specific crops.

The WBG plays an important role in these priorities. I look forward to working with all of you on these issues. Thank you.


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