As promised I wanted to share further thoughts on where I see the African startup and early stage scene going in the next few years.

Firstly, I do not think there is anything controversial about saying that most likely African tech and the entire scene will grow a lot more this year. But let’s unpack that a bit and look for the outliers and where from early stage and beyond the amazing outcomes will come from. And even though I said I’d write about edtech and supply chain, I wanted to go back over Agritech which is a sector I am getting to know a lot more at the moment, and I’m finding it far more interesting than I even expected!

Agritech is a passion of mine. The largest collective employer on the continent; occupying apart from minerals the largest contribution to GDP on the continent too; and guess what all importantly: people have to eat! I also have a personal interest in a relatively small farm that I run with my family in Morocco about 200kms from Casablanca where we produce mostly citrus and other fruit.  

For many countries on the continent agriculture remains the most important sector in terms of employment and output. 14% of total output of Sub Saharan Africa is accounted for by agriculture (in some countries reaching as high as 50% of total output).   

Until recently it has been an overlooked area (I was glad to hear on a recent podcast of Afrobility they discussed it!), certainly in terms of venture funding; perhaps a bit less when we look from an NGO / DFI perspective; but realistically to create a flowering (pun intended!) and modern agricultural economy across the continent; investment in technology and innovation will play a big part. Meaning it will also be for profit organizations that enable agriculture on the continent to become more efficient. And get closer to the goal of self sufficiency across Africa.

Parts of the value chain in the entire agricultural landscape that can be improved are: the gaps in infrastructure. This includes everything from simple things like better warehousing that is more strategically placed for farm access. That allows the creation of better storage and avoids spoilage, in Ghana for example only 20% of agricultural storage needs are met. Across the continent this lack leads to very high and unnecessary spoilage rates without proper drying, grading, and bagging equipment.

This then continues with transport infrastructure, which is often outdated or disorganized (something we witnessed first hand at WaystoCap), that leads to further loss of value through inefficiencies and spoilage with poor routing and lack of up-to-date trucking, and unreliable third party logistics providers. This is then compounded by the high cost of intra-continental logistics, where deficits could easily be met by surpluses elsewhere; unfortunately the African Continental Free Trade Area has not yet had the desired impact. These are essential services for the proper working of the agricultural sector.

The preharvest sector has huge opportunities to improve yield and grow efficiency. Techniques that have existed for centuries and have been improved such as modern irrigation and less dependence are incredibly valuable practices that need to be adopted in far greater numbers. The ability to grow yield in a reliable manner will be critical for the entire sector's progress. In 2022 North Africa is again seeing some of the worst droughts in memory, which is having a huge impact on output but also the economy as a whole of several countries including Algeria, Morocco, and Tunisia.  

With food prices globally increasing for several years in a row, staples such as wheat (Africa being the second largest importer in the world) have increased almost 100% in just 5 years. The potential shown by the improvements in the entire agricultural sector in Africa could have towards interdependence on the continent is a huge opportunity that could benefit enormously from outside investment. To help focus on the technology and innovation that will allow Africa to leapfrog the current agribusiness complex dominated by conglomerates.  

Other areas that need to be looked at in greater detail, and beyond the scope of this essay are the processing itself of food and agricultural products. Advances in extension of shelf life, diversity in product, and additional processing capacity and capability are all areas that technology and innovation can improve. And finally of course the one that I know the most about from my most recent experience working in the FMCG and food industry supply chain in North and West Africa is distribution. Several players are emerging and technology will play a big role in improving and extending its ability to assess and create new markets. 

The potential in the agritech and agribusiness space is huge on the continent, particularly when we consider that in 2020 of all the capital invested in startups on the continent only 8.6% went to agritech; while close to 25% of the GDP of some regions on the continent is represented by agriculture. The opportunity is large and increasing with current demographic trends.