A closer look at the agrifood startup ecosystem in Ghana and West Africa

Editor’s Note: Maciej Bulanda is the partnerships & communications manager at SmartHectar Innovations, a German innovation hub focused on agrifood and water. Together with entrepreneurship mentoring organization enpact, SmartHectar launched a joint venture enable West Africa to accelerate agrifood and water tech innovations in this emerging market. Here Bulanda shares his analysis of the local startup ecosystem, discusses trends and features promising agrifood startups from the region after the launch event in Ghana last month.

Why West Africa?

West Africa is one of Africa’s most important markets, increasingly attracting foreign investment. It bears great opportunities but they come with great challenges. For instance, despite an abundance of natural resources and farmlands, West Africa has experienced some of the lowest per hectare crop yields in the world (USAID). Moreover, its population is expected to double by 2050 to 800 million putting enormous pressure on agrifood production.

Crucially, agriculture is one of the main drivers of growth across the region’s largest economies: Nigeria (with a population of 200m), Cote d’Ivoire and Ghana. The latter two economies grew at a 7-8% rate in the past two years and are undergoing a substantial transformation. Although the challenges are enormous, a digital revolution is expected to deliver sustainable solutions. Thus, providing innovation stimulus for the Agrifood Tech sector can have a significant socio-economic impact on the whole region.

In order to do that the local ecosystem in Ghana requires some developments, which have been identified and recommended by the recent VC4A report that we’re hoping to bring to the region with enpact:

• quality mentorship,
• corporate-backed sector-specific programs,
• and early-stage investment.

Solving real problems

The startup scene in West Africa is quite young, but it is growing as fast as the general population, with more startups making it to world headlines (e.g. ThriveAgric graduating Y Combinator’s 2019 class). The main tech hubs are located in Nigeria (Lagos, Abuja), Ghana (Accra, Kumasi), Cote d’Ivoire (Abidjan), and Senegal (Dakar).

The ecosystem is young but rather mature as startups engage with the real problems on the ground proving their good market fit. (Not always the case in many other developed ecosystems across the US or Europe). One of the biggest contributing factors is the young age of the population. Many young entrepreneurs are connected to agriculture one way or the other. Many young people from rural areas move to cities, where they can utilize their technical know-how of farming in entrepreneurship. As a result, the major challenges that farmers are facing are reflected by the areas in which innovation is taking place. These problems and solutions are mostly in:

• logistics and traceability
• food preservation
• food wastage
• access to data, financing and the value chain.

At the same time, innovative solutions do not necessarily need to be fully digital or rely on hi-tech systems to transform farming. For example, in Ghana, the internet infrastructure is very developed in urban centers, but still very limited in rural areas. That is why most business transactions run by startups are based on USSD and rely on simple mobile phones that all farmers have (e.g. TroTro Tractor booking system is SMS-based, Agromyx sales are driven through mobile phones).

That does not mean, however, that the new technologies are not embraced. QualiTrace, for instance, developed a new product for a new market segment – an image recognition app for more educated farmers with smartphones – on top of the existing core services that they provide via mobile phones (GSM). Others, like AcquahMeyer Drone Tech, embrace new technologies that are not constrained by  the limitations of the old ones, which is a case of drones for precision farming. All in all, despite its early years the ecosystem is very well tuned to the market needs and its capacity.

Collaboration builds new solutions

Another important characteristic of the ecosystem in Ghana is a strong collaborative culture between the startups. Opportunities with one startup company come bundled with opportunities for another. Many young founders seem to be familiar with the famous lesson of collaboration between Microsoft and IBM. Startups in Ghana realize that through collaboration they can create new business opportunities for each other.

One such collaboration story involves AcquahMeyer’s drone services, the QualiTrace inputs authentication services and Complete Farmer’s crowd farming platform. All three startups are combining their solutions to create a more attractive and complete market offer, which is valued and anticipated by investors as echoed at the recent World AgriTech Summit.

This collaborative spirit we witnessed in Ghana is likely a result of a still-developing ecosystem, short of networking platforms, initiatives, and hubs. The enable launch event on March 5 is perhaps a case in point. Without having a prize, or an award bounty, startups seized their opportunity to meet, pitch, and network. Some came a long way from Burkina Faso, Togo, and Nigeria. Out of 15 startups invited to our event, a few have already started collaborating and some found new business partners. Our role has been very simple – by hosting events like this we can enable startups to seize the opportunities, which we also believe is true of the corporate partners.

Missing parts  

What the VC4A report pointed out as a weakness of the ecosystem in Ghana is its high fragmentation. There is a strong entrepreneurial culture and a growing number of supporting structures for entrepreneurs, including the agri-food sector (e.g. Kosmos Innovation Center, MEST). However, they seem to operate independently without much interaction. As a result, the startups have fewer opportunities to connect and to know what they are working on, which can lead to a concentration of solutions in one part of the value chain but not others. If we want to drive innovation in the whole agrifood sector, we need to make sure that the solutions are being developed across the entire spectrum.

Part of the problem behind this fragmentation is a shortage of data. There is currently no centralized source of data on the agrifood (and water tech) startups, nor on the agrifood sector in Ghana. The startups we spoke to on the ground have all identified this as a big challenge: they do not have a reliable source of data about farming, other than their own limited research. The issue has been raised by the regional authority on agribusiness, Farmer Anthony Morrison, CEO of Ghana Agribusiness Chamber. During his keynote speech he spoke about the urgent need to address the data gap in order to drive innovation in the agriculture sector.

That is why in partnership with several stakeholders enable West Africa is planning to develop an Agrifood & Water Tech database building upon the existing data sources of enpact, SmartHectar, and their partners. The initiative will focus on collaboration across the ecosystem in order to drive a necessary change to transform the face of agriculture in Ghana and West Africa.

Startup profiles

Our team has screened the local startup ecosystem and scouted for early-stage startups from Agrifood and Water verticals in West Africa. What they found is that most of the screened startups are active in one or more of these areas:

• Food waste and preservation
• Farm-to-market logistics and traceability
• Farm management (AgData capturing devices, decision support software, image recognition, big data analytics, land management, financial services)
• Farmer services (financial, education)
• Water safety (quality control)

Out of 70 screened startups from West Africa, here are the 14 we invited to present their innovations at the enable kickoff event in front of investors, corporates, and other stakeholders.

1. AcquahMeyer Drone Tech is providing farmers with drone technology for high precision agriculture UAV spraying.
2. Agromyx is an agro-food manufacturer and distributor from Ghana that has developed instant cereal and smoothies that have no additives, no preservatives, and no sugars.
3. FarmCrowdy has set up Nigeria’s First Digital Agriculture Platform empowering rural farmers. They aim to strengthen food security in Nigeria and efficiently utilize available arable farmland.
4. QualiTrace has developed a track & trace technology to authenticate farm inputs and outputs. By providing a tool to fight with counterfeit products and promoting farmer education they are tackling food insecurity in the region.
5. TroTro Tractor is a platform enabling farmers to request, schedule and prepay for tractor services.
6. AgroInnova is one of the most well known agricultural startups in Ghana. They have developed Akokotakra farm management software which enables the poultry farmer to record, monitor, keep track, and analyze all their farm operations easily
7. ColdHubs developed a solar-powered  “plug and play” modular system for a 24/7 off-grid storage and preservation of perishable foods.  
8. Complete Farmer is a “crowd farming” platform that gives users the opportunity to own and manage farmland on their mobile devices.
9. Farmerline is providing farmers with access to information, inputs, and resources to increase productivity and transforming smallholder farmers into successful entrepreneurs.
10. Kitovu is using soil and market demand data to provide farmers with soil and crop-specific inputs, while guaranteeing purchase of their produce at no extra cost.
11. Profish has developed Lojaanor – a marketplace where aquaculture farmers and fishermen can access profitable markets and deliver fish to customers when they need it.
12. Sesi Technologies has developed GrainMate – an affordable and simple-to-use grain moisture meter which helps to reduce post-harvest losses.
13. Tekxul – Smart Water Manager (SWAM) is a flagship product of TekXul. SWAM monitors and control the amount of water in storage tanks.
14. WASHKing –  WASHKing is providing jobs for local workers to create cheap, eco-friendly biodigester toilets that reduce open defecation and diseases like cholera.
    

PS. Enable West Africa is soon starting a Corporate Innovation Challenge, which will host the finals on May 31- June 2 in Accra. More soon.