The History and Impact of Agritech in Africa

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Agritech in Africa has come a long way. In the past ten years,  the continent’s agricultural sector experienced an increase in the level of innovation. Chief among these advancements are Agritech solutions, most especially in Sub-Saharan Africa (SSA).  

Today, Kenya, Nigeria, and Ghana are front-runners not just in the number of agritech models, but also in their diversity. But when did it all begin?  The history of agritech in SSA traces back to the early 2010s when the need for smarter, tech-driven farming approaches became more evident.

The Need for Agritech Solutions in Africa 

In Africa, agriculture is big business. The reasons are clear: the sector employs over two-thirds of the continent’s labour force and contributes between 30-40% of its GDP. It also supplies 60% of raw materials to a growing manufacturing sector and fuels industrialization. 

Still, for all this potential, inefficiencies have long held the sector back. Africa has been losing ground in the global agriculture market. For example, as of today, Thailand exports more food products than all SSA countries combined.

The reason for this poor productivity is not unconnected to the neglect of technology, which regions like Latin America and Asia embraced during the “Green Revolution.” Unfortunately, Africa missed out on this critical wave of innovation.

The urgency for change is undeniable. And so in 2014, the African Union (AU) Summit adopted the Malabo Declaration, with a commitment to make Africa food secure by 2025. The vision was to eliminate hunger and poverty, triple intra-regional agricultural trade, and improve resilience across communities. In reality, most member states are not on track to hit these targets.

Achieving this lofty aspirations of the declaration might exceed the year 2025 because the Agritech market in SSA is still in its early days. However, we can’t deny that it’s gaining momentum. And with it, the promise of food security is within reach.

Current State of Agritech in  Sub-Saharan Africa 

From the early 2000s, innovation in agribusiness models, coupled with the widespread adoption of mobile phones across the continent, has created the perfect environment for Agritech to thrive. 

At present, the agtech solutions in SSA include mobile-based advisory services, digital marketplaces, smart irrigation systems, and fintech for farmers. The result is increased farmers’ productivity with growing access to better markets and more efficient resource management. 

Countries of Focus

A detailed geographic assessment of the region by the International Finance Corporation (IFC) in 2021, identified over 200 Agtech models actively operating across seven key countries which include: Côte d’Ivoire, Ghana, Kenya, Nigeria, Senegal, Tanzania, and Uganda. 

Kenya leads the region as the largest Agritech market, securing over 70% of total market funding in 2021. The country has more than 100 Ag-techs in operation, including 61 based in Nairobi. 

Following closely, Nigeria captured 25% of total funding with 30 companies. Ghana, while not seeing the same influx of capital, still was on track with 28 Ag-techs and a growing number of funded startups. Meanwhile, Uganda and Tanzania, have less mature markets, but each have their share of activity—Uganda has 15 and Tanzania has 18 Ag-techs. (IFC, 2021). 

Threats to Agritech in Africa

Notwithstanding, several threats still face Agritech in SSA despite the growth in recent years. These challenges, if not addressed, could hinder its potential to transform agriculture in Africa. They include:

• Smallholder family farms, especially those led by women, remain largely disconnected from the mainstream economy, with low levels of productivity.

• Public sector investment in agriculture remains below what’s needed to drive accelerated growth.

• Challenges persist in connecting people across dispersed locations, making knowledge sharing and multi-stakeholder engagement difficult.

• Small family farms are often isolated from larger markets. 

• A lack of regulatory frameworks stifles the development of cross-border agritech initiatives.

• The need for a more efficient governance model to support these cross-border efforts.

• Finally, the shortage of skills and expertise in agritech poses a barrier to innovation and growth.

Agritech Opportunity In Africa 

It’s tempting to assume that Agritech could serve as an immediate solution for Africa’s agricultural challenges. But in truth, it’s far from a quick fix. What stands out, though, is that Africa’s diversity creates an incredibly ripe opportunity for agritech to make a meaningful impact across the continent.

As identified by the Agribusiness Group at Addleshaw Goddard, here are three major growth agritech opportunities in Africa: 

1. Farm Management Software

One huge growth sector in the agriculture industry globally is the use of technology-based farm management systems (Farm Management Software) that identify and manage variability in fields through observing, measuring, and responding to data. Real-time data can be collected by utilising aerial or GPS imagery which allows farmers to monitor fertiliser, water, and other agricultural inputs in specific areas of any given field.

For example, companies like Aerobotics in South Africa have developed advanced farm management software that integrates drone technology and AI. The platform enables farmers to monitor tree health, optimize irrigation, and enhance pest management, which streamlines operations from crop assessment to yield forecasting. 

Yet, with just a fraction of African farms utilizing such tools, the need for increased investment is glaring. It’s an open door for stakeholders looking to improve agricultural productivity on the continent.

2. Farm to Consumer Systems

Innovative solutions to agricultural challenges are emerging, particularly within the ‘mobile’ agriculture sector. A sizable number of investments are being made in farm-to-consumer networks that connect smallholders directly to markets.

For example, mobile technology solutions by  BabbanGona in Nigeria link smallholder farmers with suppliers and buyers, at the same time, it provides integrated solutions to increase crop productivity and income. However, the reach of these platforms remains limited. Therefore, expanding this model with more investment could multiply its impact. 

3. Supply Chain Efficiency and Wastage

Post Harvest Loss (PHL) is a big problem in Africa as more than one-third of farm produce doesn’t get to the final consumers due to lack of refrigeration, poor market access, and other related factors. Fruits and vegetables are hit the most with an estimated annual loss of 40 to 50 percent.

A proven way to combat this wastage is through efficient transportation and cold storage. However, the cold chain—pre-cooling, refrigerated storage, and transport—remains weak or non-existent in some countries.

On the bright side, companies like Kivu Cold in Kenya, ColdHubs in Nigeria, and FreezeLink in Ghana are all making strides in providing cold chain infrastructure (CCI) in their regions. But current CCI investment remains patchy. This gap in the market presents a prime opportunity for investors to step in and scale cold chain solution. 

Wrap Up

The history of Agritech in Africa is marked by slow adoption and limited infrastructure but the wheels are turning. In Sub-Saharan Africa, the mix of technology and farming has shown undeniable progress. Sure, there’s still a long road ahead, but the vision of food security is slowly coming into focus.

With innovations like smart irrigation, crop monitoring, livestock assessments, and more streamlined supply chains, there’s real potential for Africa to emerge as a global agriculture powerhouse in years to come.