According to insight by one of the world’s top consulting firms, McKinsey & Company, the agricultural sector remains one of the most important sectors of the economy for many African countries. McKinsey sights that more than 60 percent of the population of sub-Saharan Africa is smallholder farmers, and as of 2019 about 23% of sub-Saharan Africa’s Gross Domestic Product (GDP) comes from agriculture.
Despite this Africa’s full agricultural potential remains untapped.
Dozy Mmobuosi, CEO Tingo International
It is clear that agriculture is of great significance to many countries in Africa but despite the importance, the budgetary allocation of most countries on the continent is still in the single-digits. This is in spite of a commitment by many heads of state and government within the African Union to increase budgetary allocation for food and agriculture to at least 10 percent in their combined efforts to eradicate hunger and poverty across the continent.
Almost two decades after the declaration, known as Maputo Declaration, only Malawi has hit the double digit target. According to a recent report by the United Nations’ Food and Agriculture Organisation, sub-Saharan African countries spent around 6 percent, on average, of their annual national budgets on food and agriculture.
While budgetary allocation is important to the industry, I believe that the continent needs to do more than simply increase the share of the national budget to make a real impact in the agriculture industry.
According to McKinsey, realizing Africa’s full agricultural potential will require significant investment. Sub-Saharan Africa will need eight times more fertilizer, six times more improved seed, at least $8 billion of investment in basic storage (not including cold-chain investments for horticulture or animal products), and as much as $65 billion in irrigation to fulfil its agricultural promise. Much investment will also be needed in basic infrastructure, such as roads, ports, and electricity, plus improvements in policies and regional trade flows.
However, there is the need to use modern economics and technology to fully realise the potential of agriculture in Africa. There are many bottle necks and leakage which means that value is being lost within the agricultural value chain. Technology has the potential to bring more value to farmers and every other player in the value chain.
Over the years, technology has played a significant role in bridging the gap between the farmers and their customers. Solving problems within the agricultural value chain will also lead to higher productivity, output and quality.
No African country is among the top exporting countries of agricultural products in the world despite the vast amounts of arable land and higher percentage of engagement. Looking at increasing exports will be vital as the need to intensify efforts towards boosting the economy of the sector on the continent.
Through Nwassa, African farmers are being empowered by connecting them to markets beyond their immediate environment, using simple technology.
Annually, global food losses and waste estimates include 30 percent for cereals, up to 50 percent for root crops, fruits and vegetables. I believe that addressing the challenges within the agricultural value chain can reduce this yearly wastes.
Having run a digital agricultural platform, I can say that infusing technology and modern economics will position the African agriculture sector as a force to be reckoned with on a global level in years to come.
Technology has the potential to reduce wastage of agricultural produce while also bringing more value to the players in the value chain, especially the farmers. Lower losses will drive farmers’ revenue and have a positive impact on supply, quality and price of produce for consumers.
With technology playing an important role in Africa’s agricultural space, an increase in budgetary allocation on the part of the government would come as an added advantage to further push for one of Africa’s most important sectors to reach its full potential.