With one-quarter of the world’s arable land, Africa is expected to play a leading role in ensuring the global population – expected to grow to 9 billion by 2050 – has access to a secure source of food. This has led the World Bank to predict that Africa’s agricultural sector will grow to $1-trillion by 2030.
However, despite 65% of the continent’s labour force being engaged in agriculture, and 32% of the continent’s GDP stemming from this sector, Africa only contributes 10% of global agricultural output. Key factors contributing to this is a lack of access to markets and financing, as well as productivity levels that are well below developed world standards.
For Africa’s agricultural sector to reach its potential and meet the food needs of a growing global population, improvements in four key areas need to be achieved, namely:
- Increased productivity, including access to financing and education, integration of end-to-end processes to track farm-to-fork, and affordable access to machinery;
- Improved food quality and safety through track-and-trace of the origin of products at every step of the logistics chain, as well as reducing the use of pesticides;
- Better international go-to-market by professionalising the marketing of African agricultural products, and enabling access to regional and global markets for smallholder farmers, who constitute the majority of Africa’s agricultural sector; and
- Improved government steering, aimed at guiding production and export, and prioritising securing food and nutrition needs of local populations.
The challenge of productivity
Africa’s agri sector consists mostly of a large number of subsistence farmers, who generally sell or trade their produce locally. Their output is often limited by their access to equipment and information: only 5% of the cultivated land on the continent makes use of irrigation, compared to 38% in Asia, while the spare use of fertiliser – as little as 7.4kg per hectare in Ghana compared to 100kg in South Asia – contributes to further underperformance. Many have no access to farming machines to automate some of the more time-consuming and physically demanding work.
There is also a prevailing disconnect between smallholder farmer production and real-time market needs, which hampers government efforts to steer the industry strategically to serve local economic and food security needs. One free trade agreement in the east of the continent was suspended after one of the governments involved identified that the food being exported was much-needed locally.
On the topic of exports: even Africa’s leading agricultural producers have limited access to global markets. Egypt and Nigeria may produce one-third of the continent’s agricultural output, but due to a lack of monitoring and unclear origin, the produce from these two agricultural powerhouses often fail to inspire confidence in global buyers, leaving smallholder farmers with only local market access to sell their goods.
This has created an urgent need to develop a holistic technology-led approach to addressing productivity and quality concerns across the entire agri value chain. Encouragingly, a number of powerful new technologies are emerging to digitise Africa’s agricultural sector and bring a slew of new advances in productivity and quality.
Digitising Africa’s agri-industry
Digital farming combines several key technologies to make farming more efficient and sustainable, and to create opportunities for rural farmers to gain access to the global marketplace.
The megatrend of hyperconnectivity, driven by IoT and mobile phones, is connecting every market participant and machine, from farmers and seed producers to equipment manufacturers, commodity markets, governments and other stakeholders. Smallholder farmers in Africa are enjoying the benefits of hyperconnectivity through mobile applications that enable farmers to get SMS notification of weather information, market prices, and best practice.
Connected sensors for crops and livestock are generating huge amounts of agricultural data that is processed by precision agriculture algorithms to optimise production activities such as irrigation, fertiliser use, and crop protection. This enables farmers to increase yields and maintain global quality standards while saving input resources, minimising any negative effects on the environment.
Improving access through innovation
By increasing transparency, digital agriculture also enables smallholder farmers to have end-to-end track-and-trace for certification requirements to fully integrate them into the supply chain. The Rural Sourcing Management solution developed by SAP in partnership with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the German Federal Ministry for Economic Cooperation and Development (BMZ), and other private sector partners, is integrating smallholder farmers into regional and global value chains.
It not only connects them to global markets, but a built-in e-learning component helps to deliver critical information and best practice to enhance the quality of their produce. By tracing produce from farm to fork, the Rural Sourcing Management solution also enables smallholder farmers to sell produce at market related prices, increasing their revenue and opening up new markets in the process.
A new digital agriculture think-tank is also leveraging SAP’s start-up initiatives on the continent – such as the MakeIT initiative in Nigeria conducted in partnership with GIZ – to develop new solutions for Africa’s agri-industry. The aim is to find niche solutions such as Hello Tractor, which functions as a sort of Uber for tractors by provisioning on-demand tractor services to smallholder farmers, or Ghana’s AgroCenta, a fair-trade initiative aimed at improving access to markets among the region’s smallholder farmers.
By equipping Africa’s smallholder farmers with productivity and quality -boosting technology tools, and ensuring they have access to market opportunities beyond their immediate environment, the continent’s agricultural sector can start delivering on its potential to feed the world. As the global population expands and food demand increases, Africa’s smallholder farmers are set to become key players in the global economy of the future.
Wikipedia wants more Africa
At the recent Wikimania conference in Cape Town, a key focus was on increasing more regional contribution to the world’s largest free, collaboratively-built online encyclopaedia.
The 14th annual Wikimania 2018 conference, the annual gathering of volunteers from around the world to celebrate Wikipedia and the Wikimedia projects, is expected to bring together over 500 volunteers from around the world to discuss and share ideas around the future of Wikipedia and free knowledge globally.
Wikimedia sites are read approximately 15 billion times a month globally, however only a small portion of volunteer Wikipedia editors come from Asia, Africa, and Latin America combined.
Anyone can edit Wikipedia in any of its almost 300 different language versions including Swahili, Hausa, Amharic, Arabic and Afrikaans versions.
“To achieve knowledge equity we need to have more voices represented in our community. This is why we are creating an inclusive environment for people from all over the world to contribute knowledge in a way that considers custom, language, access to bandwidth, and more,” said Ellie Young, Conference Organizer for Wikimania.
Ghanaian Wikipedia contributor and free knowledge activist Felix Nartey says that some of the primary barriers to contribution from people living in Africa is lack of time and lack of access to an enabling environment (computers and access/affordability of internet).
“We have been engaging with our communities and holding a number of successful editathon sessions. What is apparent is that African people have a real appetite to see themselves represented on this platform. They want to see their content and their languages on Wikipedia and are crashing through some of the structural barriers to do so,” said Mr. Nartey.
For example, through a collaboration with the Social Theory Course at Ashesi University in Ghana, students have been given class assignments which have led to contributions of their research and term papers on Wikipedia through the Wikipedia Education Program model.
Across other parts of Africa, organised thematic workshops targeted at bridging the gender gap and other systematic biases that exist on Wikipedia have also been held.
“If you are passionate about a specific topic or piece of local history, or if you would like to see more articles in your own language, register and start making your contributions. The only way we are going to shift the content bias is by adding content that represents a more diverse user base,” said Douglas Scott, President of the Wikimedia Chapter of South Africa.
With over 5 million articles already on English language Wikipedia, Mr. Scott says that more African contributors can get involved by creating an account on Wikipedia and testing out different ways to edit — whether it’s fixing a grammatical error or adding a citation to an existing article, creating a new article, or asking other volunteer editors for support in reviewing a draft article you created.
Articles on Wikipedia need to have verifiable references and sources. This means that facts must be drawn from recognisable publications and institutions. A great way for more African contributors to get involved is to join a WikiProject around specific areas of interest. WikiProjects consist of groups of contributors who work together to create and improve articles about a specific topic on Wikipedia.
Africa’s fintech is migrating
Africa’s fragmented markets and lack of legacy foreign exchange trading infrastructure means that the continent has become a melting pot of fintech activity and innovation, writes TIM HUTCHINSON, Head of Digital for Financial Markets, Standard Bank.
The evolution to electronic foreign currency trading in Africa, while slow to start, is today gaining tremendous traction.
In South Africa, only five years ago, almost 90% of foreign currency trades happened over the telephone. Today, despite challenges around illiquidity and complicated political and capital control environments, approximately 75% of trades are conducted digitally, with a mere 25% conducted on the phone.
With 57.6% of the world’s 174-million active registered mobile money accounts in Sub-Saharan Africa, the continent is becoming a world leader in fintech generally, and in mobile money in particular. As African citizens and business people transact globally, Africa’s highly developed fintech culture is not only deepening on the continent, but is also migrating out of Africa.
The foreign exchange flows that Africa’s expanding fintech culture supports are very important to the continent’s financial services providers, most of whom are developing fintech capabilities or partnering with the most popular or effective home-grown African fintech’s to ensure that they capture this flow.
Standard Bank has been an integral part of driving this rapid evolution to digital in Africa’s foreign exchange trading landscape.
In order to function as an effective market maker, we need to source liquidity in market. We also need to, instantly, formulate risk-based pricing in an ever-changing world. Thereafter we need to distribute price.
In Africa this requires developing solutions that allows retail, corporate and institutional customers to access foreign exchange markets across multiple jurisdictions. At the same time in most markets, “we also need to show central banks what we are doing,” adds Mr Hutchinson. All transactions need to be transparent and electronically traceable so that local authorities are prepared to approve digital trades.
Today, however, banks are not only expected to provide the systems and networks to facilitate basic transactions but are also required to provide insight and guidance beyond pure execution by offering additional value-based services across research, hedging and, most importantly, settlement capability. Currency research for example, is increasingly a big client requirement. Having on the ground experience and local expertise as well as the ability to deliver this digitally, “differentiates Standard Bank’s distribution capabilities in this regard”.
In addition, banks are also increasingly required to inform and guide clients through the broader economic, legal and political landscapes in which transactions occur. For example, one of the considerations in developing Standard Bank’s digital capability was how to combine market intelligence and research with real-time pricing, trade execution and post-trade services. Today it is not enough just to execute trades. It is equally important that we advise and inform the broader universe in which trades happen.
From a technology point of view Regulatory Technology (Regtec), for example, is assisting Africa to manage new regulatory developments in heavily currency-controlled environments. Similarly, the rise in robotic process automation (RPA) and artificial intelligence (AI), “has allowed Standard Bank to develop solutions that leapfrog traditional business problems”.
Digital trading in Africa is also evolving in its own often very different way. We have found that it is not just a question of importing developed world systems. Our approach with clients is to work with them to help understand their internal needs in terms of governance and operational efficiency. We then partner with clients to develop and implement digital solutions that talk to the heart of their business need.
Standard Bank’s own Business Online (BOL) platform provides an example of how the bank has built digital transaction capabilities that exactly meet client need. BOL, for example, allows clients to view balances across the continent while making third party currency payments and also supporting general cash management. This kind of broad, business-wide digital cash view and capability puts control back in the hands of the clients while also allowing clients, rather than the bank, to manage their own cash flow.
From an Institutional perspective it’s very important to be able to offer customisable solutions to clients managing money on behalf of their investors. Standard Bank’s investment in Application Programming Interface (API) technology, for example, is tracking exactly its client’s growing ability to build these capabilities into their own systems.
On the retail side Standard Bank’s SHYFT app – a digital wallet allowing global transactions in USD, EUROS, GBP and Australian dollars has extended this control element to the man in the street. SHYFT has been recognised both globally and locally for its innovation.
Standard Bank presents a very compelling, unique and globally competitive digital trading proposition to local and developed world clients seeking to access Africa. Our footprint across 20 territories – most at different levels of digital development – provides a compelling pan-African proposition for global and local clients alike.
While Africa’s record in digital adaptation and innovation is impressive, the technology part is often the easier part to implement. The human and cultural systems, and client behaviour changes, required to give this digital evolution life – like getting customer analogue systems to start pricing electronically to make trades visible 24/7 – is often a lot harder to achieve than the technology upgrade. In short, bank employees, customers and regulators all need to undergo fundamental cultural shifts in how they do things and understand the world.
It is often these broader cultural and market shifts that Standard Bank as a pan-African bank is called on to advise as clients seek to understand and engage Africa effectively.
Given the rapid pace of digital evolution within Africa’s varied market, customer, legislative and cultural landscapes, we need to balance customer value and efficiency – and regulatory pressures to be more transparent – with what is, in the long run, best for the market.
As a pan-African bank inextricably committed to the growth and success of the continent, Standard Bank’s digital journey requires a judicious blend of developed world technology with African insight and innovation. This blend should be capable of balancing customer need and legislative oversight in the development of efficient and inclusive markets that sustain long term growth.