Industry Insights

Agtech in Africa: Bridging the Gap to Food Security with Digital Solutions

African agriculture, primarily dominated by smallholder farmers, faces several barriers ranging from credit access to market linkages, from input unavailability to outdated farming techniques. However, Agtech (Agricultural Technology) is emerging as a revolutionary force to address these barriers. By leveraging digital solutions, Agtech aims to enhance agricultural productivity, sustainability, and profitability for farmers.

The Necessity of Agtech in Africa

While most global farming regions have benefitted from agricultural technological advancements like fertilizers, seed hybrids, and mechanization, Africa remains a laggard, mostly due to regional fragmentation and infrastructure underinvestment. But the answer to Africa’s agricultural challenges may not lie in high-end tech innovations but in simple digital solutions that can connect farmers to essential services.

The Current Agtech Landscape

Even though Agtech startups in Africa grew exponentially between 2015-2020, they captured less than 1% of global venture capital. However, from 2021-2023, investments started pouring into Africa’s agricultural and food sector. The majority of this investment targets Agtech startups that focus on digitizing the agricultural value chain. These companies facilitate farmers’ access to markets, inputs, information, equipment, and credit, thereby setting the stage for a potential boom in Africa’s agricultural sector.

Diverse Business Models in Agtech
  1. Access to Finance and Inputs: Given that less than 4% of total commercial bank lending is directed towards agriculture in Africa, Agtech startups like Apollo Agriculture (Kenya) and ThriveAgric (Nigeria) offer innovative credit solutions, providing farmers with loans in the form of seeds, fertilizers, and other essentials. Additionally, companies like Pula (Kenya) introduce insurance products to protect farmers from unforeseen climatic changes.
  2. Market Access: Platforms like Twiga (Kenya) bridge the gap between farmers and vendors, ensuring a streamlined and efficient supply chain, enhancing profitability.
  3. Information Access: With the majority of African agriculture being rain-fed, timely and accurate weather forecasts are crucial. Esoko (Ghana) provides farmers with weather forecasts and early warnings. Meanwhile, in more commercialized markets, Aerobotics (South Africa) uses AI, drones, and other tech tools to provide insights into crop health and potential yield.
  4. Shared Assets: Mechanization is scarce in African agriculture. Platforms like Hello Tractor provide farmers with affordable access to tractors by connecting them with tractor owners.
The Future: AI and Big Data in African Agtech

The future of Agtech in Africa is not just digital but intelligent. The integration of Artificial Intelligence (AI) and Big Data holds the potential to reshape Agtech’s landscape in Africa. Companies like Atmo (US) and OCP (global fertilizer giant) are partnering with African institutions to leverage AI for better weather predictions and customized fertilizer solutions. Google AI Centre, in collaboration with FAO, is also developing AI models to anticipate locust infestations, a perennial problem in parts of Africa.

Moreover, initiatives like CGIAR’s Platform for Big Data in Agriculture aggregate vast amounts of agricultural data, and when combined with AI, can lead to groundbreaking solutions for Africa’s agriculture challenges.

Conclusion

Agtech is no longer an option but a necessity for Africa. With the continent’s population set to boom, food security will be paramount. By leveraging digital solutions, particularly AI and Big Data, Agtech can play a pivotal role in ensuring that Africa not only feeds itself but also emerges as a major player in the global agricultural scene.