Several innovative, promising approaches to protect and improve the world’s food supply are starting to gain traction both internationally and in African markets.
Thanks to technology, Nigeria’s continued reliance on food imports and security can now be addressed with more resource efficiency.
New digital agricultural technologies are radically changing the agricultural industry, disrupting long-standing industries and economic institutions, and changing society as a whole. They present new challenges and opportunities for decision-makers in the agriculture sector. The tremendous potential of digital technologies is demonstrated by current possibilities in more developed ecosystems.
The agritech sector in Nigeria will stagnate, become less competitive, and ultimately fail if these technologies are not deployed. Just like in every other area, such as retail, financial services, or mining, where dull and repetitive operations are being replaced by automation and intelligent technology, jobs in the agriculture sector will alter as a result of the adoption of digital technologies.
Using technologies in the challenging conditions that African farmers face is a challenging endeavor. Millions of small- and medium-sized farmers across the continent cannot purchase many other forms of technology and need access to the Internet. By developing tools that farmers with varying degrees of technical expertise and education can utilize, agritech will grow.
The driving force behind Africa’s agritech and research agenda is private investment, as the lack of government support forces inventors and entrepreneurs to turn to venture capital (VC). The fact that the most populous nation in Africa yet finds it difficult to finance its agritech industry may be ironic. What actions are necessary to address this issue?
Bridging Agritech Sector Funding Gap
One of the biggest issues local agritech startups have when attempting to expand their product offerings is a lack of access to financing.
The government of Nigeria has, over time, established several state-owned banks, grants, and funding programs for those who are not part of the industry. These include the Agricultural Commodity Marketing and Pricing Policy; the Input Supply and Distribution Policy; the Agricultural Input Subsidy Policy; the Agricultural Mechanization Policy; the Water Resources and Irrigation Policy; and the Agricultural Extension, Technology Transfer Policy, Agricultural Transformation Agenda (ATA), Agricultural Promotion Policy, and several others. None of these have adequately solved funding issues within the agritech sector.
Regretfully, there remains a significant disconnect between funding channels and agritech businesses. To fully benefit from the potential of Agritech, agricultural potential needs to be fully fulfilled. McKinsey estimates that eight times more fertilizer, six times better seed, and at least $8 billion in basic storage will be needed across Africa.
Moreso, major investments in basic infrastructure—such as ports, roads, and energy—as well as adjustments to local trading patterns and laws will be needed.
Through the application of agritech, venture capitalists might unlock the potential of smallholder farmers in Nigeria as the country’s primary industry. By investing in local businesses and truly innovative technologies, they will be able to leverage technological advancements to support the competitiveness of essential industries through innovation and foster economic growth in Nigeria.