Digital Solutions for
African Agriculture

Ms. Atsuko TODA, Director, Agriculture Finance & Rural Development
Ms. Olukemi AFUN-OGIDAN, Principal Agribusiness Officer

I.

Introduction
Understanding different country and agriculture sector
context and common agenda

MENTIMETER Question 1

A Rising Continent – Sustained Growth
Sustained economic growth in some countries (17 countries with growth rates above 5%in 2017) and sometimes outperforming the rest of the world (7 countries among the 20world’s fastest growing economies)
10864202008

20092010

2011

20122013

2014

2015

2016

2017

2018-2-4-6Asia and Pacific

AfricaLatin America and the Caribbean

Source: IMF, WEO, 2017

World

European Union

Rank
12345
678
910
1112
13
14
16
171920Country
Macao SAR

Ethiopia
Côte d'Ivoire
Nepal
MyanmarBangladesh

Djibouti
Cambodia
Lao P.D.R.
China, People's Rep. ofSenegal
GuineaIndia
Philippines

Tanzania
Turkmenistan

Burkina Faso
Vietnam

Real GDP
Growth Rate
13.4
8.5
7.6
7.5
7.2
7.1
7
6.9
6.9
6.8
6.8
6.7
6.7
6.6
6.5
6.5
6.4
6.3

Demographic Dividend of a Young Continent
40% of Africans are between the ageof 15-35 and classified as “Youth”

40%

Over 65% of Africa’s 1 Billion
population is under the age of 35

65%
50% are under 25years

50%

By 2050 there will be close to close to 2 billion youth

In the meantime, labor force in other parts of the world will decline

The Rise of the Middle Class Average income increased by about 30% over the past 10 years (ascompared to 20% of decrease between 1980 and 2000)
 By 2060, 43% of Africans will belong to the middle or upper classes,
implying considerably higher demand for goods and services

Source: Pwc, 2017

Source: Brookings 2016
8Agriculture in Africa – An Untapped Market
STATE OFAGRICULTURE IN
AFRICA

65%

51%

of the world’sof Africans are engaged inuncultivated arable land

agriculture

is in Africa

MEGATRENDS

IMPACT BY 2050

but contribute only one quarterof Africa's GDP

US$ 47 billion
was spent onfood imports
into Sub-Saharan Africa in 2017

POPULATION GROWTH &EXPANDING MIDDLE CLASSURBANIZATION &TECHNOLOGICAL CHANGESEVOLVING DIETARYPREFERENCES

2.5 billion

over 60%

By 2030, African foodmarket will be worthpeople living in Africa

increase in Africa’s fooddemand

US$ 1 trillion

AFDB. 2017. Betting on Africa to Feed the World; FAO. 2018. The Regional Outlook on Gender and Agrifood Systems; FAO. 2018. Food Outlook, Nov. 2018;
PNAS. 2016. Can Sub-Saharan Agriculture Feed Itself; ILRI. 2015. African Livestock Transformation, presented at AFDB Feeding Africa Conference Oct. 2015

6

Challenges in the Agriculture Value Chain
To sustainably feed a growing population, Africa must close the yield gap
and build a robust agribusiness sector
6Average Cereal Yields

North America +Europe43Asia

Latin Amer &Caribeans

2

1

Sub-Sahara Africa

0

1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015

Metric tons per ha

5Challenges in the Agriculture Value Chain (Cont’d)Agriculture
Value Chain

Input Supply

On Farm Production

Post Harvest &Agro-processing

Marketing &Consumption• Insufficient reach• Fragmented
Challenges

demand for inputs• Lack of credit forfarmers and agrodealers• Government
crowding out
private sectorof extension
services• Lack of
information onclimate data, input
needs, etc.
• Lack of access tofinance andmarkets• Landfragmentation,degraded soils• High post harvest
losses• Insufficientstorage facilities• Inconsistency inquality of produce• Poor processing &handlingtechniques• Lack of technicalknowhow toaccess markets• Lack of
information on
product origin &farmer practices• Almost nonexistent tracking
systems

8

II.

African Development Bank - FEED AFRICAAFDB’s “High 5” Priorities
1.

Power and Light Up Africa

2. Feed Africa

3. Industrialize Africa
4. Integrate Africa
5.

Improve Quality of Life of Africans

The “Feed Africa” StrategyFeed Africa Vision: To transform African agriculture into acompetitive and inclusive agribusiness sector that creates wealth,improves lives and secures the environment.

A Focused Approach on Integrated Commodity Value Chains
The Bank and its partners will pursue an agenda to transform a selection of key agriculturalcommodities and agro-ecological zones
Wheat in North Africa

Sorghum, millet,
cowpea, and livestock
across the Sahel

Maize, soybean,
livestock, and poultry
across the Guinea
Savannah

Rice in West Africa

Cassava in humid and sub-humid zones

Tree crops (inc.
cocoa, coffee,
cashew, and oilpalm), horticulture
and fish farming
across all of Africa

Agricultural commodity value chains and agro-ecological zones targeted by the Feed Africa

In particular, Feed
Africa will take acommodityfocused integrated
approach –simultaneously
addressing multiple
bottlenecks acrossentire prioritized
agriculturalcommodity valuechains and within
related agroecological zones

III. Introducing Digitalization’s Rise in Africa

THE RISE OF DIGITIZATION IN AFRICA
The entry point for digitization in Africa has been through the telecommunications
sector and the rise in increasing internet connectivity and mobile phone uptake overthe last decade

Forbes https://www.forbes.com/sites/tobyshapshak/2015/09/02/african-internet-capacity-growth-continues-to-outstrip-the-world-2/#7aafaf2f568e
GSMA. The Mobile Economy Africa 2016

Between 2010 – 2015, Africa had the fastest
14
growth of mobile phone subscribers

THE RISE OF DIGITIZATION IN AFRICA (CONT’D)

300 million
additional people to come online by2025

Internet connection in Africa outpaced the rest of worldfrom 2011 - 2015

FACTORS BEHIND THE TREND
Scarce diffusion on fixed line networks
Entry of key international mobile service providers
Increasing affordability of new devices and a growing market for second-hand devices
GSM Association: The Mobile Economy Sub-Saharan Africa 2018

Though Africa remains weak on ICT performancecompared to rest of world…
ICT Development Index by world regions and African countries (from highest score 8.9 to lowest score 1.0)
8.0

7.5
5.9

5.0

4.8
2.8

4.8

African countries

5.0

4.6

4.6
3.1

Avrg. Avrg. Avrg. Avrg. Avrg.
Mauritius SouthUS & Europe Americas Asia Africa
AfricaCanadaPacific
Global Ranking (on 1767292countries)

ICT Development Index combines 11indicators in three categories

4.8Tunisia Morocco

99

100

2.9

2.9

2.7

2.6

1.9

1.8

1.7

1.6

1.0

Egypt Botswana

Côte Zimbabwe Kenya
d’Ivoire

Senegal Nigeria

Angola Tanzania Ethiopia Congo,
DREritrea

103

131

142

160

176

105

136

138

143

• ICT access (e.g. fixed telephone & cellular subscriptions)• ICT use (e.g. % of individuals using internet)• ICT skills (e.g. tertiary gross development ratio)

Source: International Telecommunication Union (ITU) - ICT Development Index 2017 ; BCG analysis

165

170

171

…ICT adoption is booming in Africa….
Mobile-cellular telephone subscriptions (M)Active mobile-broadband subscriptions (M)+20% p.a.
708+51% p.a.

759

181

366

87
2005

1420102015

2017

Households with a computer (%)

2010

92005

164

52010

2015

2017

+25% p.a.

1015
Source: ITU

2015

Individuals using the Internet (M)+9% p.a.

4253

2017

2005

213

54

2010

2015

2017

….and is already moving fast in some service sectors,
such as mobile money – MENTI QUESTION 2
Mobile money services are developing quickly
on the continent...
Number of live mobile money services... and are already well adopted
Percent of respondents who have a mobile money accountAfrica Consumer Sentiment Survey 201598%

Urban consumers

64%

56%

47%
2015
Africa

28%
17%

17%

3+ mobile money services
2 mobile money services
1 mobile money services

Source: Sagaci Research 2015, BCG Africa Consumer Sentiment survey February to April 2015 GSMA
Note: Survey reached 11,127 total consumers., of which 8,977 were lived in urban areas.

AngolaDRC

Ghana

Ivory CoastKenya

South Africa

AFRICA’S DIGITAL AGRICULTURE LANDSCAPEICT outreach and technological innovation is on the rise

As at 2018, there are at least 390 ICT and digital solutions actively operating in the African agriculture space
Reaching an estimated 33.1 million smallholder farmers
33.1M
13%

Number of ICT4Ag Solutions
currently operating in Africa

390

14%
27%

314

Estimated number (in millions) of smallholder
farmers using ICT4Ag solutions

220

163

35%

112
66
422012

2013

2014

Dalberg Analysis, CTA Digitalization for Agriculture Report – Africa,
2019

2015

2016

2017

2018

Advisoryservices

Marketlinkage

Financial
Inclusion

SupplyChain Mgt

Total19UPTAKE OF DIGITAL AG SOLUTIONSEast Africa accounts for thelargest number of known
active ICT4Ag users:

20.9 million
users

West Africa has

3.7 million
known active ICT4Ag users

Kenya alone has the highest
agritech intensity in Africa

Nigeria has the largest
number of tech hubs inW.Africa

30% of agtech startups

55 hubs

operate in Kenya

Central Africa is least
penetrated with only

599,000
known active ICT4Ag users>50 Tech Hubs
10–49 Tech Hubs

South Africa has thelargest number of techhubs on the continentSouthern Africa has59 hubs

known active ICT4Ag users

Dalberg Analysis, CTA Digitalization for Agriculture Report – Africa, 2019; https://www.gsma.com/mobilefordevelopment/wpcontent/uploads/2018/03/Africa.pdf

5.1 million
20

COUNTRIES WHERE AGTECH SOLUTIONS ARE CREATED
HQ

Dalberg Analysis, CTA Digitalization for Agriculture Report – Africa,
2019

Present

FUNDING SOURCES FROM AGTECH AND REVENUES
Total ~€127m average(€110–145m range)

Macro agri-intelligence€3m
D4Ag data intermediaries€3m
Supply chainmanagement €9m

Top global D4Ag funders
Estimated annual Sub-Saharan Africa D4Ag funding, 2018
€ millions, Sub-Saharan Africa, 2018~€300 million

Financial access€21m

Market linkages€39m

Advisory & information
Services €54m

Estimated sector revenue

Dalberg Analysis, CTA Digitalization for Agriculture Report – Africa,2019€175 million

PROJECTED UNIQUE AND ACTIVE USERS

Dalberg Analysis, CTA Digitalization for Agriculture Report – Africa, 2019

IV. Business models for diffusion & transfer

OPPORTUNITIES FOR TRANSFORMATIONDIGITAL AND TECHNOLOGICAL INNOVATIONS CAN ADDRESS THESE CHALLENGES
AND LEAPFROG TRANSFORMATION OF AFRICAN AGRICULTURE
Mobile and ICT basedadvisory on input
markets and application

Mobile apps for soil
testing and mapping ofsoil characteristics

Mobile and ICT based
advisory on best
agronomic practices

Weather based
monitoring andinsurance products

Land and soil fertility
mapping throughremote sensing
Digital payment
and mobile money
systems

Satellite or drone based
monitoring of fields, production
area, water resources, etc.

Harvest forecasting &shared automatedharvesting

Price monitoring$Digitalmarketplaces

Blockchain for origin
traceability and mapping

Data capture &analysis of field
performancePioneering Digital Solutions in Africa
Mobile money and e-wallets transform the business of agriculture

48.76%of Kenya’s GDP

processed over M-PESA.

US$32.5 billion, theKENYA

14.5 million farmers
registered under the GrowthEnhancement Support Scheme(GESS).

value of M-PESA transactions.
Farmers achieved a93%
of Kenyans have access tomobile payments.
M-PESA offers payment solutions for
agricultural services but alsofurtherservices
suchasinternationaltransfers, loans and health provision.

157%

increase in income – from US$700
to US$ 1,800.

Nigeria liberalized input distribution
through an e-wallet system – theGrowth Enhancement Support
Scheme (GESS)NIGERIAIMPACT DATA SUGGESTS POWER OF BUNDLING –MENTI Question 3

Dalberg Analysis, CTA Digitalization for Agriculture Report – Africa,
2019V. Training to use newtechnology

USE OF ADVANCED TECHNOLOGIESof respondents expect to integrate
new technologies over the next threeyears, the most popular of which are
IoT, blockchains and machinelearning.

Dalberg Analysis, CTA Digitalization for Agriculture Report – Africa, 2019

CURRENT SHARE OF USERS - WOMEN AND YOUTH

Creates an opportunity for entrepreneurship
Dalberg Analysis, CTA Digitalization for Agriculture Report – Africa, 2019

SPECIFIC INVESTMENTS NEEDED• Develop human capital: digital literacy across the agriculture ecosystem• Support the development of sustainable business models: push B2B
rather than B2C; support research on innovative business models• Focus on impact: leverage youth and women capital to drive
entrepreneurship and wealth creation• Invest in the missing middle infrastructure• Strengthen enabling environment: policies and governance of the digital
economy• Drive a knowledge agenda: Develop set of best practices and stronger
community of practiceVI. Challenges and RESPONSES

Digital Solutions for African Agriculture•••

Our goal is to increase investments in digital enablers
across agriculture value chains in Africa.
It will be achieved by

Informing and optimizing decision-making processes
Unlocking finances for value chain actors
Creating opportunities for Tech agripreneurs

The Bank has launched a dedicated Flagship to drive
Africa’s digital agriculture in support of the Feed Africa
Strategy: Digital Agriculture

African Development Bank
Digital Solutions for African Agriculture Objectives
ValueChain

Input Supply

On FarmProduction

Post Harvest &Agro-processing

Marketing &ConsumptionImprove efficiency

Improve traceability,sustainability andprofitability

Facilitate access tomarkets

Goals

Enhance yields, scale
productivity

ICT Tools• Land & soil fertility
mapping by remote• Mobile and ICT
sensing/ mobile apps
based advisory• Weather monitoring• Satellite or drone
and insurance products
based monitoring• Finance Agro dealers• E-wallet• Forecasting & sharedautomated harvesting• Data capture &analysis of field
performance• Traceability andmapping• Price monitoring• Digital payment &mobile moneysystems• Digital marketplaces

Factors Needed To Scale up
Digitalization In Agriculture• Agriculture data, policies and regulatory framework• Digital infrastructure• IT skills & digital literacy• Innovation & research

Digital AgEnablers• Digital Ag incubatorsecosystem• Digital IDs & mapping• Data collection & analytics• Financing for Digital Ag startups& businesses

35

AFDB FOOTPRINT IN THE DIGITAL AGRICULTURE SPACELIBERIA E-Registration Platform

TOGO AGRIPME (Agri Porte Monnaie Electronique)

Registered 313,329 farmers
across 15 counties in Liberia
The platform digitally ID-ed farmers
and agro-dealers to link them to a
supply chain of inputs, finance andmarket places

Infrastructure

Targeting 150,000 farmers

The project allowed farmers to benefit
from a US $1.3 million subsidy to buy
inputsTechnology parks and innovation hubs/ funds in Senegal, Rwanda, Tunisia
Assessment of E-Voucher Systems in Africa

Knowledge products

Digital Agriculture Profiles (DAP) for Morocco, Kenya, Cote d’Ivoire, Rwanda andSouth Africa
Policy Innovation for Transforming Africa’s Food System with Digital
Technologies

VII. Creation of Value and Shared Goals – MENTI Question 5

African Development Bank’s Approach toPromote Digital Agriculture
Entry Point

Through public sector
investments, the Bank
will enable Governments
to:• provide essential
public goods.
• partner with theprivate sector.

Intervention Areas
Pure Public Goods
Interventions
Enabling Environment for
Digitized Agriculture

Potential PPP
Interventions
Access to Markets
Blockchain for integrated
food systems

Information Systems forEnhanced Productivity

Inclusive Fintech4Ag
Co-invest in agtech startup
funds

Digital Literacy andCapacity building

Smart Agriculture andIntelligent Systems
38

African Development Bank Digital Ag Target Countries
ChampionCountries

Mid-Track Countries

Early StarterCountries

Countries leading
Africa’s digital
agendaCountries that haveshown politicalinterest and have agrowing techcommunity

Countries at thenascent stage ofdigital development

Kenya, Nigeria,South Africa,Tunisia, Morocco,
Egypt, Rwanda,
Mauritius

Cote d’Ivoire,
Ghana, Senegal,
Uganda, Zambia,
Zimbabwe

Ethiopia, Botswana
and other countries
where there isopportunistic
demandBank Digital Solutions for Agriculture Flagship
Partnership Opportunities – Menti 6Africa is rapidly digitalizing and open for business
Investments to scale

Potential partner institutions• Novel farming systems• ICT & Tech private companies• Agribusiness marketplaces• Agtech Impact investment funds• Remote sensing & drone technology• Global FMCGs digitalizing their supply• Automated mechanizationchain• Development partners

THANK YOU
CONTACT:

E.MABAYA@AFDB.ORG
O.AFUN-OGIDAN@AFDB.ORG
A.TODA@AFDB.ORG