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Innovation feeding agri industry

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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.

Africa News

Africa phones go flat

Africa’s mobile phone market declined 2.1% quarter on quarter in Q3 2018 according to the latest figures from IDC.

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The global technology research and consulting firm newly released Quarterly Mobile Phone Tracker shows overall shipments for the quarter totalled 52.6 million units, with feature phone shipments falling 2.7% QoQ and smartphone shipments declining 1.3% over the same period.

Transsion brands (Tecno, Infinix, and Itel) led the feature phone space in Q3 2018, with a combined unit share of 58.2%. Nokia was next in line with 11.7% share. Transsion, Samsung, and Huawei dominated the smartphone space with respective unit shares of 34.9%, 21.7%, and 10.2%. However, in value terms, Samsung led the smartphone market with 37.2% share, followed by Transsion (21.0%) and Huawei (13.0%).

There were differing fortunes in the region’s three major markets, with Nigeria suffering a heavy 11.6% QoQ decline in mobile phone shipments, while South Africa and Kenya saw respective QoQ growth of 8.5% and 7.9% in Q3 2018.

“The decline in Nigeria stemmed from a slowdown in government spending, ongoing warfare in the country’s northern states, and market uncertainty in the lead up to elections,” says George Mbuthia, a research analyst at IDC. “In South Africa, the market’s growth was spurred by the penetration of low-end devices from brands such as Mobicel, Mint, and Nokia, while the launch of entry-level smartphones helped drive growth in Kenya despite increases in taxes and fuel prices placing a significant burden on disposable income in the country.”

While feature phones remain steadfastly popular across Africa, particularly in more rural areas, consumers are increasingly being attracted by smartphone offerings from Chinese brands such as Xiaomi, Oppo, and Huawei, which are actively targeting feature-oriented customers at more economical price points.

“There is a new wave of Chinese brands aggressively pursuing growth opportunities in the region, while the more-established Huawei is also accelerating its marketing efforts and expanding its distribution budget,” says Ramazan Yavuz, a research manager at IDC. “These brands have quickly progressed along the learning curve and evolved their offerings to perfectly reflect the realities of the region by addressing the diverse pricing and feature needs of the consumer base.”

Looking ahead, IDC expects Africa’s overall mobile phone market to reach 58 million units in Q4 2018, spurred by the festive season and online consumer events such as Black Friday. The introduction of more affordable smartphones in the African market will help drive progress in this space over the coming quarters, while the share of feature phones will decline steadily as the transition to smartphones gathers momentum.

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Africa News

Mobile money to cross borders

Orange and MTN launch pan-African mobile money interoperability to scale up mobile financial services across Africa.

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Two of Africa’s largest mobile operators and mobile money providers, Orange Group and MTN Group, today announced a joint venture, Mowali (mobile wallet interoperability), to enable interoperable payments across the continent. Mowali makes it possible to send money between mobile money accounts issued by any mobile money provider, in real time and at low cost.

Mowali will immediately benefit from the reach of MTN Mobile Money and Orange Money, bringing together over 100 million mobile money accounts and mobile money operations in 22 of sub-Saharan Africa’s 46 markets. Mowali is ready to enable interoperability between digital financial service providers beyond MTN and Orange operations and markets, to support the existing 338 million mobile money accounts in Africa.

Mowali is a digital payment infrastructure that connects financial service providers and customers in one inclusive network. It functions as an industry utility, open to any mobile money provider in Africa, including banks, money transfer operators and other financial service providers.

The objective of Mowali is to increase the usage of mobile money by consumers and merchants.  Mowali enables money to circulate freely between mobile money accounts from any operators in all countries.  From the customer’s point of view, this means “I can pay or receive money anywhere from my mobile account regardless of my operator”. The system will unlock further innovation in the digital financial space within the continent. 

For Stéphane Richard, Chairman & CEO of Orange, “by providing full interoperability between platforms, Mowali will provide an important step forward that will allow mobile money to become a universal means of payment in Africa. Increasing financial inclusion through the use of digital technology is an essential element in furthering the economic development of Africa, particularly for more isolated communities. This solution embodies Orange’s ambition to be a leading player in the digital transformation of the continent. By joining forces with another of Africa’s market leaders, MTN, we aim to accelerate the pace of this transformation in a way that will change the lives of our customers by providing them with simpler, safer and more advantageous services. “

“One of MTN’s goals is to accelerate the penetration of mobile financial services in Africa, Mowali is one such vehicle that will help us achieve that objective. Furthermore, co-operation and partnerships that help us accelerate the pace of development and overcome some of the scale, scope and complexity of challenges that society faces are key. This partnership with Orange is therefore an important step in helping us play a meaningful role in supporting the United Nations’ Sustainable Development Goals related to eliminating extreme poverty and enhancing socio-economic development in the markets we operate in and beyond. Thus giving our customers access to a bright, digital future.” said Rob Shuter, Group President and CEO of MTN.

The GSMA supports the Mowali initiative as interoperability at this scale is a key accelerator for both financial inclusion and Mobile Money usability across Africa.  “Today, there are over 690 million mobile money accounts around the world. Mobile money services have become an essential, life-changing tool across Africa, providing access to safe and secure financial services but also to energy, health, education and employment opportunities. The creation of Mowali will help to further transform mobile financial services throughout the African region. It demonstrates the mobile industry’s continued leadership and commitment to driving financial inclusion and economic empowerment through industry collaboration. The GSMA is proud to support its development,” said Mats Granryd, Director General, GSMA.

“Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome, in support of financial inclusion. With Mowali, Orange and MTN deliver a solution that will enable them, and other companies, to scale digital financial services across Africa, faster, to everyone—including the poor,” said Kosta Peric, deputy director of Financial Services for the Poor, at the Bill & Melinda Gates Foundation “This is a signal that a new wave of innovation, which can help alleviate poverty and drive economic opportunity, is coming. We’re pleased to see an implementation of Mojaloop—an open source payment platform available to operators across the sector—help achieve that.”

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