The African Fertilizer Industry Development Association (AFIDA) expresses deep concern regarding the proposed introduction of an 18% Value Added Tax (VAT) on fertilizers in Côte d’Ivoire’s 2026 Finance Law. This policy represents a significant departure from decades of sound agricultural policy and threatens to undermine food security, farmer livelihoods, and regional agricultural development.
Background
As outlined in Article 6 of the proposed fiscal annex, the Government of Côte d’Ivoire plans to eliminate VAT exemptions on fertilizers, applying the standard 18% rate to inputs used in fertilizer manufacturing and packaging. This measure is presented as part of broader efforts to rationalize tax exemptions in compliance with EU provisions.
However, the fertilizer sector is fundamentally different from other exempt categories. Fertilizers are strategic inputs essential for food security, poverty reduction, and sustainable agricultural development—not discretionary goods that can absorb tax increases without severe consequences.
Why This Policy Can Be Problematic
1. Undermines Food Security Commitments
Côte d’Ivoire’s current fertilizer use (37-44 kg/ha/year) already falls below the African Union’s minimum threshold of 50 kg/ha established at the 2006 Abuja Fertilizer Summit. Introducing an 18% VAT would drive usage even lower, directly contradicting national and regional commitments to agricultural intensification and food security.
2. Imposes Crushing Burden on Vulnerable Farmers
With 60% of cocoa farmers and 90% of all farmers in the lowest income decile, this tax could effectively reduce agricultural productivity. Farmers can face additional annual costs, with individual farm input costs rising per hectare.
3. Creates Regional Inconsistency
Côte d’Ivoire would become the sole ECOWAS country imposing VAT on fertilizers, violating the spirit of the Lomé Declaration (2023) and ECOWAS Common External Tariff agreements. All 11 neighboring countries maintain 0% VAT rates specifically to protect farmer access and regional food security.
4. Threatens Supply Chain Stability
Based on 2022 price sensitivity data, the proposed VAT could reduce fertilizer imports by 194,235 tons—39% of normal supply volumes. This would create shortages during critical planting seasons and compromise agricultural campaigns across all major value chains.
5. Accelerates Environmental Degradation
Without affordable fertilizers, farmers will resort to extensive farming practices, clearing additional forest land to compensate for lower yields. This directly contradicts Côte d’Ivoire’s environmental commitments and agricultural sustainability goals.
Economic Analysis
The fiscal logic of this policy is fundamentally flawed:
- Projected government revenue: Minimal and declining as consumption drops
- Lost customs revenue: 2.1 billion CFA francs from reduced imports
- Withdrawn agricultural investment: 94 billion CFA francs in a single season
- Production losses: 1.5-2.9 million tons of cereal equivalent annually
The policy would generate marginal tax revenue while causing massive economic damage to the agricultural sector and rural economy.
AFIDA’s Recommendations
Primary Recommendation: Maintain the existing VAT exemption on fertilizers as a strategic input essential for food security and rural development.
What’s at Stake
This policy decision will determine whether Côte d’Ivoire continues its trajectory toward agricultural modernization and food security, or retreats into policies that reduce productivity, increase poverty, and isolate the country from regional agricultural development frameworks.
Fertilizers are not luxury goods. They are fundamental inputs for feeding nations, reducing poverty, and building sustainable agricultural systems. They deserve policy treatment that reflects this reality.
Call to Action
We urge the Government of Côte d’Ivoire, members of Parliament, agricultural stakeholders, and development partners to:
- Recognize fertilizers as strategic inputs requiring special fiscal treatment
- Maintain existing VAT exemptions in the 2026 Finance Law
- Engage in meaningful consultation with agricultural sector stakeholders
- Align national policy with regional commitments and international best practices
The agricultural community, representing millions of farmers and their families, is watching this decision closely. We stand ready to engage constructively with policymakers to find solutions that strengthen fiscal policy without compromising food security.
