Africa is set to become a global hub for agritech

African hands plant crops in field.

31 May 2021 Africa’s agricultural sector is set for exponential growth in the coming decade, research commissioned by Microsoft and compiled by Africa Practice reveals. With a projected value of USD1 trillion by 2030, the continent is poised to become the global centre of agritech solutions and has also seen rapid growth in e-agriculture solutions.

With agriculture sustaining 70 percent of Africa’s livelihoods, Microsoft believes that agriculture is a key sector in Africa. Developing agritech solutions to enable data-driven, precise and connected farming will help farmers across Africa optimise yields, boost farm productivity and increase their profitability. Leveraging our extensive partnerships and initiatives network, Microsoft, through its 4Afrika initiative, is committed to ensuring that all farming communities are equipped with the latest tools like AI, IoT and edge computing to improve productivity and sustainability across the sector.

Africa is fast becoming a global leader in the agritech space – between 2016 and 2019 the agritech sector grew by 44 percent year-on-year, and the continent has registered the highest number of agritech services in the developing world, reaching over 33 million smallholder farmers to date.

Agriculture already accounts for 14 percent of GDP in Africa and for 52 percent of the continent’s workforce. It’s expected that as the continent’s middle class rapidly grows, they will drive increased demand for fresh produce, while the implementation of the African Continental Free Trade Agreement (AfCFTA) could boost intra-African trade by 49 percent. Through increased investments in inputs, storage facilities and irrigation infrastructure, Africa is expected to increase its agricultural output by up to three times by 2030.

Covid-19 has made digital interaction critical

Smallholder farmers account for 80% of the farming community, and it’s predicted that up to 200 million smallholders will be registered for agritech solutions by 2030. Mobile connectivity is predicted to reach over 55 percent by 2030, compared with 45 percent currently, meaning that over 85 percent of smallholder farmers could have access to feature or smartphones and mobile solutions. This is critical, as many smallholder farmers live in remote areas, are hard to reach, and lack purchasing power on their own.

Agribusinesses provide tech services to these farmers, using digital tools to reach smallholders with extension services. With ongoing Covid-19 restrictions on movement, interacting with farmers digitally has become critical. Last year saw considerable growth across the continent in mobile money usage, e-commerce platforms, big data and e-extension services, all of which promise to drive further progress in agritech. Movement restrictions have seen more farmers and agribusinesses turning to e-commerce platforms, bolstering distribution chains.

Agritech solutions have a direct impact on the farmers they engage with. Twiga Foods links smallholder farmers in rural Kenya to informal retail vendors in cities. With Twiga’s mobile-based business-to-business food supply platform, vendors can order fresh produce from farmers across Kenya at competitive prices.

Another 4Afrika partner, NFrnds, brings the power of digital to subsistence and smallholder farmers in Africa and other emerging markets, via mobile. The platform provides vital information to users, and has nurtured a community of farmers who network with and support each other. It also provides access to financial services for market segments that are traditionally underserved by formal banking and insurance.

Climate change is prompting growth in sustainable agricultural practices

The adverse impacts of climate change have highlighted the need to adopt climate-friendly, sustainable agricultural practices, including effective tools to manage climate-related information, and ensuring that sustainable practices trickle down to smallholder farmers. There is a need for more robust and sustainable farming practices, which requires innovative technology solutions. Extension services for smallholder farmers is one way of providing relevant information and implementation strategies. The development of big data platforms is a means of informing farmers about agricultural best practices.  

SunCulture identified access to water as the biggest challenge for most farmers, so the first product they developed was a solar-powered pump combined with micro irrigation. Through precision agriculture, Microsoft is supporting SunCulture with an IoT platform and Azure machine learning tools for their solar-based system, which allows them to offer farmers personalised recommendations and solutions through their mobile phones. This helps them to be better, more productive farmers.

Richard Kiplagat, Group Director and MD East Africa for Africa Practice comments that, “Across Africa, agricultural transformation is well and truly underway. The opportunity for the sector to address some of the continent’s most pressing challenges – including food security, income inequality and livelihoods for our fast growing and youthful population – is immense. The big question is how to catalyze this momentum especially given the urgent need for a rapid post-Covid recovery. Our findings clearly show that agritech holds great promise as an effective tool to improve productivity, decision-making and access to markets. Africa Practice is excited about the results of the study and its potential to inform the growth of the agricultural sector on the continent.”

“Technology has the potential to change the face of farming, using smart tools and platforms for precision farming, predicting weather patterns, maximising the use of scarce water resources. By harnessing agri-tech, we can help solve the pressing issues around food security to meet the United Nations Sustainable Development Goal #2 of Zero Hunger, and enhance economic development in the process. We’re excited to work with our partners in building locally-relevant technology solutions that are mindful of the challenges local farmers face, offering solutions to farmers to deliver meaningful impact,” says Amrote Abdella, Regional Director, Microsoft 4Afrika.

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