Côte d’Ivoire: 9% VAT on Fertilizer Inputs Reshapes Sector Dynamics

Market News – Sector Analysis

The fiscal reform introduced under Côte d’Ivoire’s 2026 Finance Law marks a significant development for the fertilizer sector. Since January 17, 2026, inputs used in fertilizer production, as well as related packaging materials, have been subject to a reduced Value Added Tax (VAT) rate of 9%, ending the previous exemption regime.

Although the standard VAT rate of 18% was initially envisaged, authorities opted for a reduced rate in order to mitigate the immediate impact on the sector. Nevertheless, this measure represents a structural shift in the taxation of agricultural inputs.

Reform in a Context of High Import Dependence

Côte d’Ivoire does not produce primary mineral fertilizers domestically. All raw materials are imported and subsequently blended locally by fertilizer mixing companies. In 2024 alone, the country imported over 570,000 metric tons of fertilizers, mainly composed of urea, potassium chloride (KCl), NPK formulations, and phosphates.

This structural dependence on international markets makes the sector particularly sensitive to global price fluctuations, logistics costs, exchange rate volatility, and now domestic taxation adjustments.

Potential Impact on Costs and Competitiveness

The introduction of VAT—even at a reduced rate—may gradually increase input costs for industrial operators and, by extension, exert upward pressure on retail fertilizer prices for farmers.

Fertilizer consumption in Côte d’Ivoire, estimated at approximately 43.8 kg per hectare, remains below the continental target of 50 kg per hectare set under the Abuja Declaration. Any increase in costs could therefore slow the country’s agricultural intensification efforts, particularly among smallholder farmers.

At the same time, national authorities have committed to tripling the production and distribution of certified fertilizers by 2034. Ensuring coherence between fiscal policy and agricultural productivity objectives will therefore be critical.

Balancing Fiscal Mobilization and Sector Support

The adoption of a reduced 9% VAT rate reflects an effort to ease the transition and prevent a sudden shock to the fertilizer value chain. However, the reform also raises broader questions regarding fiscal harmonization within the regional economic space.

While regional frameworks—particularly within UEMOA—have encouraged the reduction of customs duties and the facilitation of agricultural input trade, new domestic tax measures may create competitiveness gaps among neighboring countries.

Sector Perspective

Beyond the national context, the implications are regional. Safeguarding the fertilizer market requires sustained attention to:

• The affordability of inputs for farmers;
  
• The competitiveness of local blending operations;
  
• The coherence between fiscal reforms and regional agricultural integration objectives.
  

Maintaining this balance will be essential to ensure that fiscal adjustments do not undermine agricultural productivity targets or regional market stability.