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More than 90 percent of the market for digital services that support African smallholders remains untapped and could be worth more than €2 billion (US$2.26b), a new report by the Technical Centre for Agricultural and Rural Cooperation (CTA) and Dalberg Advisors says.
The report which found nearly 400 different digital agriculture solutions with 33 million registered farmers across sub-Saharan Africa stated that the market penetration only accounts for six percent of the total $2.6 billion market.
“Digitalisation for agriculture has the potential not just to support agricultural transformation in Africa but to do so sustainably and inclusively for Africa’s 250 million smallholder farmers and pastoralists,” said Michael Tsan, partner and co-leader of Dalberg Advisors global digital and data practice.
“While the opportunity is immense, the report is not naïve about the challenges that remain and the significant work required by agribusiness, governments, donors, and investors to maximise the transformative impacts of digital agriculture in years to come,” Tsan said.
The study noted that with more investment in the continent’s agrictec industry, African younger population will find farming attractive.
“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 also making them more resilient to climate change,” said Michael Hailu, director of CTA.
“This report indicates that despite challenges, the economics are rapidly improving, with a handful of players beginning to develop viable, large-scale businesses. To reach its full potential, companies will now need to focus on converting customer reach to actual use in order for this type of model to yield returns,” Hailu said.
The report identifies online marketplace solutions such as Nigeria’s Agrikore as significant use cases of how digital tools are being built to tackle major challenges of attracting and … Read More...