Agriculture is the backbone of most Sub-Saharan Africa (SSA) economies contributing up to 32 percent of Gross Domestic Product (World Bank, 2015) and the GDP growth generated by agriculture is up to 11 times more effective at reducing poverty than growth generated by any other sector. It is also estimated that 70 percent of Africa’s population depend on agriculture for their livelihoods and well-being; and the continent holds 65 percent of all the arable land left to feed the world by 2050.
Over the past decade, there has been sustained agricultural productivity growth in the continent and significant progress has been made in the African agricultural transformation agenda. Major developments have especially been experienced at the policy level including the:
• 2003 Maputo Declaration on Agriculture and Food Security in Africa – wherein, most notably, signatories agreed to allocate at least 10 percent of their national budgets to agriculture and rural development policy implementation within five years
• African Union’s July 2003 Comprehensive African Agriculture Development Programme (CAADP) – A Pan-African four-pillar policy framework for agricultural transformation launched after the Maputo Declaration, being implemented at country-level, with an aim of stimulating and facilitating increased agricultural performance. CAADP notably sets the goal of attainment of an average annual growth rate of 6 percent in the agricultural sector
• 2014 Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods – A data-driven agenda that outlines seven commitments meant to provide leadership for the achievement of specific goals by the year 2025 by all countries that subscribe to the CAADP framework e.g. doubling of 2014 agricultural productivity levels; in an effort to foster agricultural growth and transformation in the continent.
However, considering a vast majority of the aforementioned farmers still live in poverty, soaring malnutrition rates, 58 million stunted children and the USD 35 billion food imports bill (a huge burden figure projected to surpass the USD 100 billion mark by 2025) – a lot still remains to be done in the African agricultural sector.
Advantech Consulting participated in the recently concluded sixth African Green Revolution Forum (AGRF) that was held in Nairobi from 5 to 9 September 2016 under the theme “Seize the Moment: Securing Africa’s Rise through Agricultural Transformation”. AGRF was meant to push for the political, policy, and financial commitments essential to transforming Africa’s agricultural sector and in his keynote address, the forum was described by Kenya’s President Uhuru Kenyatta as not only important but urgent because it was held at a time when Africa is faced with incredible opportunity and profound threats in almost equal measure in terms of food insecurity and youth unemployment.
The African Development Bank estimates that transformation of a selection of 18 agricultural value chains will cost an estimated USD 315-400 billion over 2015-2025 and at the forum what has been termed as ‘the largest package of financial commitments to the African agricultural sector to date’ was made by African leaders, development bodies, foundations, and businesses.These pledges geared towards boosting an agricultural revolution in the continent over the next 10 years include:
• Kenyan government – USD 200 million over the next five years to enable 150,000 young farmers and agriculture entrepreneurs gain access to markets, finance and insurance, improving access to modern machinery and other agriculture technology, and increasing value addition and agro-processing in the country.
• The African Development Bank (AfDB) – Plans to invest USD 24 billion over the next 10 years through its just launched “Feed Africa Strategy” in support of African countries and the private sector, to unlock the potential of African agriculture.
The bank also has the Affirmative Finance Action for Women initiative that aims to help leverage USD 3 billion for women, including women farmers and entrepreneurs; and the USD 800 million Technologies for African Agricultural Transformation public-private partnership meant to scale up available technologies to transform key value chains in the African agricultural sector.
• The Bill & Melinda Gates Foundation – USD 5 billion to African development over the next five years, of which USD 1 billion will be used to expand crop and livestock research, strengthen data, and improve systems to deliver better tools, information and innovations to farmers. The foundation also promised to match “dollar for dollar” other development partner support for AGRA programs and committed to cover AGRA’s operating costs.
• International Fund for Agricultural Development – USD 3 billion in the next six years
• Rockefeller Foundation – USD 180 million including USD 130 million for its seven-year YieldWise initiative aimed at reducing post-harvest losses and USD 50 million to support AGRA and its resilience-building work
• OCP Africa – USD 150 million over the next five years to support local fertilizer distribution, storage and blending
• Kenya Commercial Bank Group – The largest East Africa commercial Bank committed USD 350 million including USD 200 million to improve market infrastructure and mobilize farmers and USD 150 million to support livestock farmers through the KCB Foundation
• World Food Programme – purchase at least USD 120 million each year (10 percent of its annual procurement budget) of its agricultural products from smallholder farmers through its Patient Procurement Platform initiative that seeks to link smallholder farmers to formal markets locally and regionally and the means to improve their yields.
Additionally, at the forum, USAID signed an MoU with AGRA and launched the “A Food-Secure 2030” report calling upon all public and private sector stakeholders to do their part to achieve a world free from acute hunger, malnutrition, and poverty. Notably, through its Feed the Future program that was written into law in July 2016 with the enactment of the Global Food Security Act – the largest development-related authorizing legislation passed by the U.S. Congress in a decade – the U.S. Government has invested USD 6.6 billion in global food security and nutrition efforts.
As the culmination of his 40-year professional career dedicated to African agriculture Dr. Kanayo F. Nwanze, the President of the International Fund for Agricultural Development (IFAD), was awarded the inaugural USD 100,000 Africa Food Prize Award for both what he has achieved at the helm of UN Agency and his advocacy on behalf of African smallholder farmers. He dedicated the prize to Africa’s rural women farmers who toil day and night to feed their families.
A major highlight of the conference was the launch of AGRA’s 2016 African Agriculture Status Report (AASR) which is the fourth in the series. With a key finding in the AASR being that 65 per cent of the continent’s arable land is degraded with soils lacking vital nutrients, and farmers lacking inputs and technical knowledge on how to revive them; it is mentionable that a soil health book titled “Going Beyond Demos to transform African agriculture: The journey of AGRA’s Soil Health Program” was also launched at the forum. The book among others illustrates that transforming Africa’s agriculture and ensuring food security cannot happen without improving the health of Africa’s soils which particularly on small land holdings are plagued with nutrient depletion, insufficient organic matter, limited water-holding capacity and acidity.
Nine action points were captured over the course of the five-day forum and are outlined in The Nairobi Communiqué. Most notably, the eighth action point was the development and use of an agriculture transformation scorecard at the heart of the CAADP biennial review process, including a one-page snapshot for Heads of State to measure and track progress against all of commitments. This scorecard had been proposed as a greater push for accountability by President Kenyatta, who is the Chair of the NEPAD and AU Africa Peer Review Mechanism, as one of his proposed three steps to give effect to an agricultural transformation.
Pertinently, key discussions at the forum acknowledged the fact that the youth population in the world is currently highest in SSA – over 60 percent of its population below the age of 25 according to the World Bank in 2009. Moreover, the UN projects a 42.6 percent growth rate between now and 2100 for its population aged less than 15 years. With these statistics, making the sector attractive to the youth population is undoubtedly crucial to achieving the transformation agenda.
“It will not be yesterday’s generation of farmers who are on the average, 60 years old. It will be the young women and men of today – with their energy, creativity and drive – who will need to feed the Africa of tomorrow,” said Dr. Kanayo Nwanze in his acceptance speech.
The consensus among experts is that technological innovations especially ICTs are pivotal in catalyzing youth participation in transforming African agriculture. With the inexhaustible potential for ICTs in the agricultural cycle, numerous applications have been (and continue to be) developed to create efficiencies across the agricultural value chain and support decision making processes. Most of these applications leverage on the over 75 percent mobile phone penetration in SSA that includes 23 percent smartphone penetration (GSMA 2016).In his keynote address, at a plenary session on the role of policy in enabling public-private partnerships to achieve African agricultural transformation, Akinwumi Adesina President of the African Development Bank said “The rapid rise in the use of mobile phones in Africa provides opportunities to further empower farmers to access market price information, extension services and agricultural inputs.”
On this note, at the second day of the forum, we were keynote speakers at the “Digital Harvest: How to grow and sustain ICT4Ag solutions” side event where we took part in discussions on the findings of our AGRA-mandated assessment study of the business models of fifteen ICT4Ag providers selected from Kenya, Ghana and Tanzania. The rationale behind the study conducted under AGRA’s Financial Inclusion for Smallholder Farmers in Africa Project (FISFAP) was to, among others, give insight into the key success factors and pitfalls to avoid in creating sustainable business models for ICT4Ag solutions delivering non-financial services such as information (market, weather or agronomic), extension solutions, trading platforms and supply chain management solutions to smallholder farmers. This arises from the fact that a majority of these solutions pervasively face financial unsustainability (mostly due to over-reliance on donor funding) and subscriber uptake and retention challenges.
Our assessment approach was based on questions formulated through the lens of the 9-component business model framework developed by Alexander Osterwalder & Yves Pigneur: Customer segment, value proposition, channel, customer relationship, revenue streams, key resources, key activities, key partnerships, and cost structure.
The canvas outlined above serves as a template for organizational transformations and restructuring efforts conducted under our business model optimization and consulting service offering (BMO) particularly targeting both social enterprises and Non-Governmental Organizations (NGOs). Our BMO services that are aligned to key industry trends are focused on: (1) Business Model Analysis which is a comprehensive gap analysis and; (2) Business Model Design wherein we effectively design business models that help ensure financial sustainability and position our client’s model within an intensely competitive landscape.
Our team has extensive experience and invaluable knowledge of:
a) Business model patterns including: Unbundling, the Long Tail, Multi-Sided Platforms, FREE, and Open Business Models
b) Business model design techniques: Customer Insights, Ideation, Visual Thinking, Prototyping, Storytelling, and Scenarios.
That is essential in the:
• Development of optimal and compelling business models and plans
• Definition of the relationship between the business model and adopted strategy
We believe that ICT4Ag developers, social entrepreneurs, donor-funded projects, and NGOs need to become more business-minded and use this framework to craft and execute innovative business models that ensure i) programmatic sustainability – continuation of program activities and results after donor funding ends; and developed capacity and motivation within the organizations/ host organizations and; ii) financial sustainability – financial self-sufficiency of operations and activities.