African Potash Signs a Deal with Uganda

African Potash Signs a Deal with Uganda

African Potash, the exploration company focused on building a vertically integrated platform for the mining, production and distribution of fertilizer in Africa, confirmed yesterday (13 June) that it had signed a non-binding memorandum of understanding (MoU) with the government of Uganda to support the development of fertilizer industry in the country. Under the deal, African Potash will seek to help ensure the availability and effective distribution of fertilizers to Ugandan farmers.

The MoU is covered by the Common Market for Eastern and Southern Africa (COMESA), with whom African Potash already has a trading agreement. “Under the terms of the non-binding MoU, African Potash will endeavor, on a best efforts basis, to source 20,000 metric tones of fertilizers internationally and arrange delivery to Kampala, Uganda for purchase by the Government of Uganda,” the board of African Potash said in a statement. “African Potash will also conduct a feasibility study in order to assess the viability for the manufacture of fertilizers in Uganda using local materials,” the board added.

Depending on the results of that study, both parties may extend the current MoU by a further agreement for the development of a manufacturing facility for fertilizers in Uganda. African Potash said that the MoU is subject to the signing of definitive legally binding agreements, which will be announced separately. “There can be no guarantee that any such definitive agreements will be entered into or that any such fertilizer deliveries will be made,” the company’s board further explained.

Uganda has a population of about 37 million out of which about two-thirds are employed in the agricultural sector. The country’s primary export is coffee, representing a major portion of the sector’s GDP. There are currently numerous projects in the country led by state and non-state donors, targeting the productivity in the agricultural sector and market development in Uganda.