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the Emergence of digitization in agricultural startups

Kenyan workers pluck tea leaves using a new machine at the Uniliver Tea farm in Kericho, 300km west of the capital, Nairobi. Critics say apart from threatening jobs, machines undermine quality, the saving grace of Kenyan tea, which is usually blended with lower quality teas from other parts of the world. Tea was once Kenya's "green gold", but today over-supply, spiralling production costs, stagnant prices and the trend towards coffee are hitting big business hard. Picture taken October 10, 2004. REUTERS/Thomas Mukoya AN/TM/THI - RP5DRICWIPAA

The Covid-19 pandemic has been a booster for rapid digitization globally. Companies, networks, and entire sectors are leapfrogging as a result of the (forced) increased use of digital tools. Even before the pandemic, the world was on the path to massive digitization. Digital technologies and innovations have become a critical factor for success and a driver for change and disruption all over the world. IoT, AI, automatization, blockchain, virtual, and augmented reality are here to stay.

This shift to digital has also reached the agriculture and food sector in Africa. Foodtech and agri-tech are now quickly growing sectors with start-ups from Africa driving change. The spread and growth of start-ups providing ag- and food tech solutions promises dynamic growth and transformation of African agriculture. Linking technology to the agriculture sector can also make agriculture – an aging sector – more attractive to youth while making it a sustainable employment opportunity.

Technology spans a broad usage spectrum: from e-commerce and supply chain management to precision farming, which monitors and tackles, among others, crop diseases and pests using sensors, drones, satellite images and AI. Fintechs make use of blockchain to do their part in reaching the unbanked population in rural areas.

According to CTA, almost 400 digital solutions have already been registered across sub-Saharan Africa with an annual growth of about 45% since 2012. Nevertheless, around 90% of the market for digital services remains untapped. In addition, many digital solutions are not scaled, giving away a lot of potential impact. Yet the sector still holds numerous business and investment opportunities! 

This is where “Scaling Digital Agriculture Innovations through Start-ups” (SAIS) comes in. The project has been implemented by the German Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). With our Investment Readiness Programme, we grow selected African start-ups in the agri-food sector, helping them to scale their digital solution. We want to harness the power and technology and entrepreneurs for a positive social impact in Africa.

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