Agritech industry in Africa

March 6, 2017

Agricultural technology commonly known as Agritech is the term that defines the early stages of the agriculture value chain, which continues all the way to the consumer from paddock to plate.The customer ultimately drives change by providing the demand for various types of food, the source of food, how food is delivered and limitation of wastage.Agritech is taking shape in Africa and according to a study conducted last year, the sector has the potential to give Africa well over $50 billion by 2025. That’s an astronomical growth if it will be realised. With investment projected to hit $5.5 billion this financial year, the emerging agritech sector is increasingly attracting attention from venture capitalists and tech-focused start-up companies.Faced with rural Africa’s improving telecommunications and internet, many of Africa’s best and brightest are being lured to launch their agritech businesses.Those involved locally believe it is an exciting time to be on the scene, encouraged by the governments drive towards adoption of technology and attention from local and international investors.A Nairobi based company is making remote water and livestock monitoring equipment in collaboration with a European firm. One of the directors of the European company told your blogger that with thousands of devices across Kenya, it has had to rely on old-fashioned radio communication technology to get data from the devices but they would rather be on a 3G or 4G network. Many of the company’s devices are in locations where connectivity is very difficult to achieve, so they’ve done that privately with technology that’s built into their units. But the most successful and the easiest path is when that connectivity is already there especially in Safaricom base stations.The director told me they don’t want to build that privately. That needs to be an investment that Kenya can make as a country.It’s no surprise that an increasing number of African startups are seeking to disrupt this sector. Their goal is to make farming more efficient, safer, and more reliable.

A South African company has launched system of precision farming, where data from sensors, aerial photography, and other data sources is combined to make predictions about when and what to plant.Ultimately, their goal is to use the farming data to construct smart insurance packages for farmers.In Nigeria, an Abuja based firm has launched a micro-financing model for farming. People can invest in a certain crop type and get a share after the harvest is sold. In Zambia, a local startup is working on launching a smart fish or shrimp feeding system for aquafarms that will include more aquafarming tools and a seed planting robot. In Tanzania, a local firm is helping plantation owners collect data from various sources from manual input from workers, weather, or aerial imagery and using it to monitor and control.In Ghana, a startup has created a custom monitoring system for chicken farms. I could go on and on but this point to a growth curve of agriculture technology in Africa.Improved connectedness across each link of this chain will enable farmers to be better able to provide a sufficient and sustainable food supply to meet customers’ needs.In Africa, agritech and food ecommerce are all important elements of the integrated value chain. Agritech specifically, though, operates almost exclusively in the initial input and production phases.From your blogger’s fact findings and through, it was clear that agritech directly contributes to a more productive, sustainable and customer focused industry. In South Africa, although the area is relatively immature in both development and adoption, there is great potential for agritech to be a new competitive advantage for South Africa as exporters and producers.In Kenya, agritech has contributed to more effective use of inputs on farm and reduces food wastage and there is a growing local and international investor community.In South Africa venture capital inflows into agritech were up threefold in 2016, and the report in my possession estimates that the opportunity for agritech’s impact in the private sector could be as high as US$10 billion between 2016 and 2025.African countries are trying to identify areas where they can make a difference.

Many people don’t associate agriculture with technology, but it is one area where Africa potentially has a great competitive advantage. And agriculture is a key driver of African employment and exports. Technology has always played an important role in increasing agricultural output. African countries have an extremely valuable opportunity to develop technologies that make a real difference to the economy’s bottom line, while also helping rural Africa realise the economic benefits of the digital technology revolution.The idea that Africa can become a supplier of quality food to the continent’s emerging middle classes is taking hold in Africa’s agricultural industry, and there is an increasing discussion about how best to realise this potential. Should such happen, then Africa will stop being a net importer of food.Africa will need to become a leader in agritech. In my engagements, I can confidently say that there’s great work startups, corporates and universities are already doing to develop the agritech sector in Africa and have been working closely with some of them.To achieve the targets, me thinks African countries need to establish independently-administered fund designed to make agritech more affordable to industry. Also they need to develop a marketplace for agritech products and establish a network of agritech hubs. If African regions like EAC, SADC and ECOWAS can establish joint research and development funds with agritech players then the industry will take off sooner rather than later. Such strategies should be included in national agritech strategy and provide direction to university and research bodies centred on the commercialisation of technology that encourage agile testing.More than half Africa’s food is imported yet the continent accounts for 60% of world’s arable land. Agritech has the potential to be a leading source of technological manufacturing, exporting high tech products to a global agricultural market in need of innovative solutions to meet exploding demand for food both in and outside Africa.

Contador Harrison