Digitizing agriculture in Nigeria is a game-changing trend. The demand for digital solutions in agriculture is easy to appreciate, especially, in a country like Nigeria where farming stays mainly at the subsistence or smallholder level with huge inefficiencies defining the practice, giving rise to a fragmented and often poor agriculture economy. The need to introduce a greater level of efficiency and transparency into the sector is leading some experienced and newer-entry stakeholders to seek out solutions for the sector that can best be defined as digital.
With Nigeria earning a score of 4.5 out of 9 in the World Bank’s Enabling the Business for Agriculture (EBA), ICT Index Score, there is a bit of an improvement in the efforts to create a more conducive digital environment through laws, regulations and policies. The GSMA Mobile Connectivity Index (MCI) also has the country doing well on such indices as affordable prices for handsets, reduction in mobile specific taxation and the creation of gender equality in terms of labor and market.
These are promising indices, which must continue and get even better, when we consider that one of the most promising means of boosting economic activity is increasing the use of digital technologies. Digital technologies are proving to be a powerful means of delivering services, creating disruptive innovations in multiple industries, and contributing to wealth and job creation.
In 2011, digitization added $193 billion to world economic output and created 6 million jobs. In the same year in the Middle East and North Africa alone, digitization resulted in an extra $16.5 billion in output and nearly 380,000 new jobs. Digitization’s impact is however not uniform across economies in different stages of development. It has a greater impact on economic growth in developed economies than in developing ones.
5 Key Drivers for Digital Transformation
- Evolving customer behaviors and preferences
- Growth opportunities in new markets
- Increased competitive pressure (sector-oriented competition)
- New standards in regulatory and compliance requirements
- New emerging technologies
Technology is reducing barriers to trade and also offering a window of opportunity to African youth entrepreneurs, who are digital-savvy and at the vanguard of innovation applied to different economic sectors. All of the key drivers for digital transformation mentioned above can be applied to the agriculture sector in Africa, which is starting to show improved economics with a handful of players beginning to develop viable businesses with attractive financial models. With over 250 million smallholder farmers and pastoralists in Africa with the need for improved and meaningful livelihoods, digital solutions for agriculture come as a game-changer in supporting and accelerating agricultural transformation across the continent.
Digitizing agriculture is essentially the use of digital technologies, innovations, and data to transform business models and practices across the agricultural value chain and address impediments in productivity, post harvest handling, market access, finance, and supply chain management to achieve greater income for smallholder farmers, improve food and nutrition security, build climate resilience and expand inclusion of youth and women.
Applying digital solutions to agriculture has the potential not only to support agricultural transformation but to do so sustainably and inclusively. This involves driving greater engagement in agriculture from women and young people and creating employment opportunities along the agricultural value chain as well as helping to build resilience to climate change. The potentials also include supporting and sustaining agricultural transformation through digital tools that improve market efficiency, transparency, aggregation and integration.
The Technical Center for Agriculture and Rural Cooperation (CTA) released a Digitization of African Agriculture (D4AG) Report that “advocates for digital agricultural transformation that can help Africa feed itself”. The report shows the high demand for D4AG and the need for policy mechanisms to be invested in as a guide to the implementation of digital solutions while encouraging the value of collaborative approach focused on the increased use of technologies.
The CTA report findings hinged on 3 key areas: sector reach and growth, D4Ag use and impact, and forward-looking trends. It showed that the agricultural sector has been growing at about 44% per annum over the last three years in terms of the number of farmers reached (i.e., registered for solutions). As an indication of how quickly the sector has grown as of 2019, there are at least 390 diverse, active D4Ag solutions across the continent with nearly 60% of these launched in the last three years, and approximately 20% launched since 2018.
These solutions for digitizing agriculture span five major use cases:
- Advisory services
- Market linkages
- Financial access
- Supply chain management
- Macro agricultural intelligence
AFEX solutions rely heavily on digital to achieve our overarching goal of helping Africa to feed itself. We present two key solutions that cut across these use cases, helping us to actively monitor farm operations and facilitate improved market access and financing for Nigerian agriculture.
AFEX Digital Solutions
WorkBench is an integrated ERP, designed for agriculture value chain management. Service providers with field officers can utilize the software to manage the entire value chain operations from input sourcing and sales, to loan administration and repayment, payment and financials.
AFEX’s ComX is the electronic platform where securitized agricultural assets are traded. ComX is designed to provide the market with a user friendly and efficient shared-infrastructure, allowing clients of the exchange to put up trades themselves as well as allowing brokers to do so on their behalf.
With these solutions we are one of the key players digitizing agriculture in Nigeria, enabling better outcomes for players across the value chains that we operate in.