Innovation in the African agrifoodtech ecosystem is rapidly increasing, with solutions such as agrifintech, full-stack ag marketplaces, cold chain storage and farm management software among many more coming up to deal with various pain points for players along the ag value chain.
While this is much-welcomed progress, it’s important for innovators to pay mind to the fundamental drivers of overall growth of the value chain – one of which is boosting farmer productivity.
Anthony Kimani, investment services manager at E4Impact Accelerator, notes that while innovation is at an all-time high, innovations to boost farmer productivity have somewhat taken a backseat.
Innovation in enhancing farmer productivity has slowed down
The African Development Bank (AFDB) says agricultural productivity in Africa has grown but the pandemic increased hunger by 60%.
Farmer productivity is one of the main pain points in African agriculture and improving it could have smallholders feeding Africa and subsequently increase their incomes. In Sudan for instance, AFDB’s provision of productivity-enhancing technologies and training took the country’s wheat harvest from 0.5 million tons of wheat on 250 000 hectares to 1.1 million tons of wheat from 315 500 hectares in five years.
Between 2015 and 2020, arguably a time when Africa’s tech ecosystem was also quickly maturing, agricultural productivity rates increased 13% on average, every year in that period.
While these gains are hopeful, recent world events – the pandemic, the war, and the spread of crop diseases have shown just how vulnerable food systems are and the need to increase farmer productivity on a continent with much potential to feed itself.
Kimani however notes that there haven’t been as many innovations in solutions to improve farmer productivity like mechanization, precision agriculture, irrigation, and hydroponics. In fact, they’ve slowed down.
“I think the challenge we have now is that we have small bits of innovation across the value chain, but I think we need to do a lot more just around improving productivity of the farmers,” he says.
Barely scratching the surface with efficiency-enhancing technology
Productivity and efficiency go hand in hand. Farmers will need efficient ways to access inputs and get their produce to markets and this is where aggregation shines, especially for African smallholders.
While a few players in Kenya like Twiga Foods are making aggregation work for farmers, Kimani says there is still scope for innovation here and room to strengthen logistics.
“To manage route to market and processing you need to bring together different farmers to sell in groups. There are businesses doing this but that still has a long way to go because those that started out have to be very strong in logistics,” he says.
Demand-driven innovation is on the rise
It’s safe to say consumers are becoming more aware and demanding more nutritious food options. Kimani notes growing customer demand for more organic and natural food products as well as safer food alternatives.
‘‘Food safety is a big issue,” Kimani says, amidst a push for more public and private support and investment towards ensuring food safety in Africa.
Scaling innovations is a matter that goes beyond funding
Getting startups to scale is another of E4Impact’s goals. But scaling to him is a factor of other things such as the startup’s business model. It’s one thing to have a very good innovation that works and it’s a whole other thing designing a business model that gets that technology to deliver results to the people that it intended.
“The biggest challenge has been unlocking the critical mass in terms of customer demand,” he says.
Joining hands with O-Farms to scale agri-circularity
E4Impact Accelerator’s mandate is to accelerate innovation by working with pre and post revenue SMEs in ‘high impact areas’ such as agrifoodtech, which forms the bulk of its work. Other focus sectors are the circular economy, renewable energy, manufacturing, social enterprises, leather and fashion and affordable housing.
It was founded following financial backing of its parent organization E4Impact Foundation by Italian Agency for Development Co-operation and currently has operations in Kenya and Uganda.
The accelerator recently teamed up with O-Farms Accelerator, a regional accelerator funded by IKEA Foundation to scale agri-circular SMEs in East Africa, for the O-Farms Accelerator Program.
The partnership would have E4Impact Accelerator come in as implementing partner while Bopinc and Village Capital came in as technical partners for the program.
Under the 3-month program, 10 agri-circularity enterprises would be collectively awarded around $53 000 (€ 50K).
It’s aim is to support these businesses through an investment readiness process and to help them grow to a point where they reach commercial scale for investors to begin taking them on as investment opportunities that can actually scale.
Kimani says the O-Farms program was much needed in the ecosystem and plays a key role in understanding how the ag innovation framework is playing out.
“It’s one thing to just have a call for applications and have agribusinesses apply. We are learning now that even within agribusiness there are a whole lot of different focus areas that are now coming out that need support in one way or the other,” he says.
Beyond price parity, CEA must focus more on consumer demand to truly scale