Donors Funding Africa’s Agric Digitalization

With annual flows of €175 million

By Benson Afful

The digitalization of Africa’s agricultural sector has been left in the hands of donors alone, while private investment is lagging, the 2019 Digitalization of African Agriculture report has said.

Donors are increasingly making agricultural digitalization an important part of their portfolios with annual donor funding flows of €175 million according to the report published by the Technical Centre for Agricultural and Rural Cooperation.

It said private sector investment is even more limited; for instance, in 2018 there was an investment of approximately €47 million into Africa-focused digitalization enterprises, including both start-ups and larger stage enterprises. This investment represented 3 to 6 percent of all Africa tech start-up investment.

Africa economies are improving, and a handful of players are beginning to develop viable businesses with attractive financial models. We estimate that 70 percent of enterprises generate some revenue and 80 percent of those revenue-generating enterprises maintain several revenue streams, the report said.

Efforts of digital agricultural services to become sustainable and scalable continue to face challenges, urging for collaborations between enterprises, donors, investors and governments must create an environment in which digital agricultural solutions can thrive and produce impact.

The report, however, recommended to governments to build partnerships between investors, private actors, and technology providers to reduce technology and operational cost. It also urged various African governments to increase funding for a more diverse set of business models rather than just for those models that have already attracted funding. Meanwhile, the African Green Revolution Forum (AGRF) has committed US$500 million to develop agriculture opportunities for young Africans and also to support digital infrastructure crucial for powering innovative farmer services.

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