The World Bank provides knowledge and financing to help close the global digital divide in least developed countries. What are digital solutions doing to help transform Africa’s food system?
The four main issues which digital solutions can address in Africa’s food systems have to do with productivity, markets, financial inclusion and data-based service delivery. Africa is at one third of the average global productivity for many commodities; the main reason for this is low availability of key inputs, as well as services, which are provided in a very traditional way. However, digital solutions can disrupt this and ensure that we reduce the productivity gap.
For example, there are a lot of commodities being produced in Africa but prices are low because there is no aggregation; digital solutions allow prices to be communicated quickly, enabling communities to aggregate faster and command a larger share of the markets and the value chain. Similarly, in spite of good financial inclusion overall in Africa, the availability of credit and insurance services is still very poor because we are still relying on bricks and mortar models of financial inclusion (i.e. physical spaces like commercial banks as opposed to online/mobile banking). The final thing is about data; a lot of data being collected is not converted into advisory services for smallholders very quickly.
So, if we can tackle all these challenges, we feel that Africa can really transform its food system.
There are many opportunities for digital solutions in the transformation of agriculture, but what do you think are the critical challenges that have to be realised and overcome?
There are three main challenges that are still important to work on with this kind of transformation agenda; the first one is infrastructure and rural connectivity, which is still lagging behind. There are new models emerging to create local area networks using a combination of offline and online models which would help deliver services.
The second issue is about the whole challenge of working on more pluralistic models of service delivery and extension because too many people in Africa depend on public sector delivery and public sector delivery also being done in a very analogue fashion. So, I think the challenge is to reform extension systems and create more opportunity for pluralistic extension systems to evolve.
Finally, we don’t have a good start-up policy on agri-tech in Africa in general. So agriculture ministries now have to work on new kinds of policies that create an enabling environment for digital start-ups and entrepreneurship but they will have to work with other ministries like commerce and industry and IT to develop this; so it is a challenge beyond just the agriculture ministries.
Kenya’s most promising agri-tech innovations will be supported by a World Bank initiative, which aims to get 1 million Kenyan farmers on a digital platform over the next 3 years. Is this not overly ambitious?
We have been working for the last 6-8 months on how we can bring the excitement in the innovation and start-up world on fintech to agriculture. We have two projects in Kenya where we work in across all 45 counties with 1 million farmers to increase their productivity and profitability. Earlier in 2019, we also participated as a partner in the Disruptive Agriculture Technology Knowledge Challenge event where we brought together digital innovators and stakeholders in Kenya from across the agri-tech spectrum under one platform, enabling sourcing of more disruptive solutions, which will be piloted with 100,000 farmers in World Bank-supported projects.
Our main task now is to create trust between all the platform players so that we can provide ongoing incubation over time. We chose Kenya because it is already a hub for the innovative fintech system; but whilst there are many innovative companies in the ecosystem on the financial side, they are not yet linked to agriculture. We find that Kenya has the best conditions, worldwide, to achieve this initially but we are planning to then launch smaller versions of this platform in other countries, like Rwanda, Ethiopia, Nigeria and other places, which also have elements of this ecosystem in place.
You will be working with many other partners in Kenya, how will you ensure that there is effective collaboration in order to achieve greater impact?
We made sure that many key players were involved from day one and we are even talking about a workshop on human-centred designs to really enable everyone to contribute to the design of the platform that includes other collaborative development partners but also technology companies, agribusiness companies, financial institutions and innovators all in one place. We are very encouraged that we have lots of strategic supporters joining the platform – not only from the donor side but also from the private sector. We had around 16/17 organisations participating in the workshop and everyone is very keen to collaborate, but leadership will be key for success. We are still working out the modalities to create a genuine multi-stakeholder platform that is not run by just one entity and, of course, the national Kenyan government - as well as local government at county level - should also be part of it.
Taking a broader view, collaboration/partnership is a big challenge within the D4Ag sector. The recent D4Ag CTA/Dalberg report has proposed a global alliance model to try and address this issue. How does the World Bank see the development of such a platform?
We fully endorse the key recommendations made in the D4Ag report suggesting a global alliance for digitally-enabled agriculture as this sector will not develop unless a wider coalition of stakeholders comes together to support innovation. The coalition needs to include the data, IT and telecom companies, as well as agri-tech start-ups and innovators, producer organisations, agribusiness companies, commercial banks, fintech innovators, governments, research institutions and other development finance agencies. This alliance will create an enabling ecosystem for disruptive agri-tech and digitally-enabled agriculture. And in Kenya, we are working on developing this alliance as a proof of concept for how this could work.
Whilst working with these multiple initiatives in Kenya, has there been anything that’s struck you as being particularly exciting or that you feel is going to be particularly disruptive?
Through an innovative company called Agri-Wallet, farmers can get clearance from financial institutions and are linked with feed suppliers, input suppliers and financial service providers. The farmers can also sell their products through the platform, with the buyer depositing payment into the farmer’s e-wallet account via MPESA. This model has the potential, if it can be scaled, to create 1 million wallets for smallholders, who can then create savings and access credit and insurance, buy commodities, and market their product under one platform.
There are many such examples of digital innovations in Kenya which have reached, for example, 5,000 smallholders. But how do you go from 5,000 to 50,000 and what can we do to help change policy, develop incentives, and also make a lot of investments so that they are able to work on achieving this? That’s our challenge now. Then the technology companies have to go further to develop more innovative models for inclusion.
