The digital services market that supports African smallholders in Africa, which could be worth more than €2 billion (US$2.26bn) remains untapped, a new report has revealed.
The study by CTA and Dalberg Advisors found that there were nearly 400 different digital agriculture solutions, with 33 million registered farmers across sub-Saharan Africa.
However, the current digitalisation for agriculture (D4Ag) market was likely to be the tip of the iceberg, with six per cent penetration and an estimated US$143m turnover in 2018 out of a total addressable market of US$2.6bn.
The study argues a strong case for harnessing the potential of digitalisation in African agriculture.
The Digitalisation of African Agriculture Report 2018-2019 found an annual growth of more than 40 per cent, for the number of registered farmers and digital solutions, suggesting that the D4Ag market in Africa is likely to reach the majority of the region’s farmers by 2030.
“Digitalisation can be a game-changer in modernising and transforming Africa’s agriculture, attracting young people to farming, and allowing farmers to optimise production while making them more resilient to climate change,” said Michael Hailu, Director of CTA, during the launch of the report released recently in Rome, Italy.
This report indicates that despite challenges, economics are rapidly improving, with a handful of players developing viable, large-scale businesses.
Among the digital solutions tracked and analysed in the report, were farmer advisory services that provided weather or planting information via SMS or smartphone applications, and financial services including loans, and insurance for farmers.
Other solutions linked farmers with markets for farm inputs, produce or provided supply chain management, improving traceability and last-mile logistics. Some services used satellite imagery,
“Digitalisation for agriculture has the potential to sustainably and inclusively support agricultural transformation in Africa for Africa’s 250 million smallholder farmers and pastoralists,” said Michael Tsan, partner at Dalberg Advisors.