Agriculture is the largest employer of labour in Africa with about 70 per cent of the continent’s population depending on it for a living. It accounted for about 23 per cent of the GDP in sub-Saharan Africa according to this report. Because it is a familiar and easy-to-enter industry, growth in the sector is said to be 11 times more effective in reducing poverty than growth in any other sector. The agriculture sector is expected to add more jobs than any other sector in countries such as Ethiopia, Malawi, Mozambique, Tanzania, Uganda, and Zambia.
Despite the importance of agriculture in Africa, its potential is underutilised. There is still a large case of food insecurity and hunger going on in the continent with about 160 million Africans still going to bed hungry daily. While farmers are willing to farm, there have been a lot of challenges such as lack of access to improved seedlings and fertilisers, lack of access to capital, and insecurity.
The last few years have seen a sharp rise in the number of Agritech startups in Africa. In 2018, there were a total of 82 Agritech startups operating in Africa with about 50 per cent of them launching within just the last two years. In 2020, Agritech startups alone raised $59.9 million in funding, 8 per cent of the total funding by tech startups.
Between 2016 and 2019, the African agritech sector grew by 44 per cent and has registered the highest number of agritech services in the developing world, with over 33 million smallholder farmers to date. If this growth persists, Africa is set to be an Agritech superpower. At the moment, Kenya, Ghana, and Nigeria are dominating in the Agritech sector, with South Africa quickly joining the race.
Agritech startups are focused on solving a diverse range of needs.
In Ghana, Agrocenta connects small farmers with a wider online market to trade while Nigeria’s ThriveAgric allows individuals to crowdfund to raise capital for farmers. While Twiga Foods is revolutionising the Kenyan food retail sector by directly connecting farmers with vendors, Corteva Agric is helping South African farmers protect their crops from pests. There’s also a startup in South Africa, Aerobotic, that uses aerial imagery and machine learning algorithms to optimize crop performance for farmers, and another in Nigeria, ColdHubs, which helps to reduce post-harvest losses by providing solar-powered walk-in cold rooms for farmers to store their produce.
All across the continent, farmers have started to feel the impact of these startups. Hello Tractor, a start-up that connects farmers with essential tools like tractors, has facilitated rentals for more than 500,000 farmers in 17 countries, helping them to increase productivity.
According to the founder of Hello Tractor, Jaheil Oliver, the start-up is aimed at reducing poverty. “I observed that farmers just don’t have access to tractors across emerging markets. Africa is the least mechanised region on earth,” he said. “As a result of that, the farmers plant late, they under-cultivate their land, and they lose income. They’re trapped in that cycle of poverty,” he said. Another startup, Digital Green has 1.2 million farmers across the continent learning the best farming practices.
The Nigerian Agric Space
In Nigeria, crowdfunding has become synonymous with agriculture, as there’s a growing number of agritech start-ups focused on solving one of the biggest problems farmers in the country face- access to capital. These start-ups leverage online platforms to help farmers raise money from the public. Popular ones like FarmCrowdy, FarmKart, Payfarmer all provide individuals with various options of investing in farms across the country for a period of time with interest.
This is especially useful as most farmers do not have the capacity to produce beyond the subsistence level. It is very difficult to get a loan in Nigeria, especially as a poor person, and the microfinance banks that claim to be targeted at poorer people are mostly exploitation machines that offer loans with unreasonably high-interest rates.
One farmer, Moroko in Keffi –who farms grains in Keffi, North Central Nigeria– is convinced that loans just further kill the farming business. According to him, he’d rather use whatever he has and farm, than take a loan.
“No matter how small, I will rather farm what I have for me and my children to eat. The companies will say they are giving you a loan but it is just like selling your soul to the devil. The amount you will pay back as interest alone can sometimes be more than the actual capital you collected, and they will keep disturbing you and embarrassing you.”
While agritech start-ups are beginning to fix some of these problems and have started making a change across the continent, begun to make a dent across the continent, there is still a lot more that needs to be done in order to increase productivity and profitability across the continent’s food sector. More start-ups need to emerge in other parts of the continent outside Nigeria, Ghana, and Kenya. Also, there needs to be a lot of favorable policies from the governments towards the growth of Agriculture in Africa. In Northeastern Nigeria for example, farmers have to pay tax and “harvest fees” before being able to access their farms.
There are still a lot of untapped agritech sub-sectors with very few startups playing in the space. The 2018 Agrinnovating for Africa report by Disrupt Africa showed that the majority of startups were e-commerce agri-focused platforms. There’s not a lot of activity in other areas like precision farming and soil management. Also, there’s a need for agritech solutions in areas like biotechnology, Robotics, and AI. Since agritech is relatively new in Africa, there’s a need for intense skills training for youths in areas such as vertical farming and hydroponics. To solve its food production problems, Africa needs to take agricultural development seriously and tech is a key element in making that happen. With over 60 per cent of the world’s arable land in Africa, and 54 per cent of Africans already relying on the agric sector for livelihood, there’s no other single sector that has the capacity and potential to lift millions out of poverty like agriculture.