Leveraging agricultural technologies for food security

Africa has the potential to become the breadbasket for the world. The continent possesses an embarrassment of riches in natural resources, including fertile soil, ample water, and more sunlight than any other continent.

According to the World Food Programme, Africa bears the weight of an alarming prevalence of food insecurity, with nearly 20 per cent of its population going to bed hungry. Together, corporations, thought leaders, inventors, entrepreneurs, academics, and policymakers can leverage their combined influence to foster agricultural technology innovation, expand access to crop insurance, and bolster fertilizer production.

To make inroads, it will be crucial to champion agricultural technologies such as precision farming, nanotechnology, data analytics, and remote sensing. By doing so, Africa can fill in critical infrastructure gaps, utilise key market information, provide digital literacy training to farmers, and educate them on best productivity practices.

This transformation is certain to improve yields, enhance margins, and optimise resource management. It will also help to relieve food insecurity and contribute to economic development. For example, the Nigerian Space Agency (NASRDA) has been actively engaged in developing initiatives to harness satellite technology for agricultural development. These initiatives include the development of the Fadama Land Information Systems (FLIMS) to boost rice production in Nigeria, cassava yield prediction models, and an assessment of environmental and other relevant factors for optimum and improved cocoa production.

Another clear-cut example of technologies that enhance the food value chain are mobile apps that empower farmers to bypass middlemen, increase their profits by selling crops directly to buyers, secure better prices, avoid high transportation costs, and access financial services that were previously out of reach.

Unfortunately, venture capital investment in Africa’s agricultural technology sits at a pitiful one per cent of all global investment in that sector according to the 2022 Africa AgriFoodTech Investment Report. To facilitate venture capital investments and drive innovation, expanding programmes such as the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) – Scaling Digital Agriculture Innovations through Start-up (SAIS) Investment Readiness Programme and Consortium of International Agricultural Research Centres (CGIAR) Food Systems Accelerator programmes are essential.

These initiatives are improving business models and are offering African tech entrepreneurs from the agriculture, food, and livestock sectors valuable opportunities to connect with investors and forge strategic partnerships. Addressing food vulnerability in Africa demands the effective implementation of crop insurance such as Index-based Crop Insurance. Shockingly, a study by the Global System for Mobile Communications Association (GSMA) on Agricultural Insurance for smallholder farmers in developing countries reveals that only 20 per cent of smallholders have access to such coverage, a dismal 3 per cent in sub-Saharan Africa.

Considering the challenges posed by climate change, Index-based Crop Insurance becomes even more indispensable as it fortifies the agricultural sector against economic shocks and stresses. In the unfortunate event of crop loss, this insurance can provide essential emergency financial aid to farmers, enabling them to recover costs and sustain their production.

Although not deeply ingrained in the cultural fabric in Africa, Index-Crop insurance has the potential to be promoted as a game-changer in the fight against food insecurity. In Malawi, a pilot program of weather-based index insurance, developed in collaboration with the National Association of Small Farmers, has shown promise in mitigating weather-related risks. The success of the crop insurance contracts led local banks to offer loans to insured farmers, reducing the lending risk associated with weather conditions.

Furthermore, the fertilizer crisis poses a significant threat to food security in Africa, with China’s export restrictions and the war in Ukraine causing shortages, potentially leading to decreased productivity and increased food prices. According to a study by the World Food Program, Africa’s limited access to fertilizers results in an annual loss of around 7 million metric tons of major cereal crops, an amount that could feed 30 million people.

With Africa’s population growing, the demand for fertilizer is bound to increase. Amidst its challenges, Africa has the opportunity to bolster its fertilizer manufacturing capabilities, thereby reducing food insecurity. In the course of addressing food challenges in Africa, the importance of multi-stakeholder partnerships cannot be overstated.

Efforts should be concentrated on the development of policies aimed at strengthening property rights, promoting trade liberalisation, improving farmers’ digital skills and ICT literacy, and fostering gender equity in all aspects of food production. Efforts should also focus on fostering a favorable investment climate for the private sector to participate in the development and improvement of agricultural infrastructures.

Addressing hunger in Africa is an economic imperative, since it has the potential to unlock billions of dollars in economic growth, create millions of jobs, and hasten the development of human capital.

* Anagonou is an economist and investment banker