Agritech In Africa Paving Way For A New Era In Farming
Agritech, the application of technology to improve agricultural production and increase production efficiency, has been expanding at a rapid pace around the world.
FREMONT CA: Agriculture has a significant role in the economics of many African countries where, Smallholder farmers account for over 60 percent of the population in Sub-Saharan Africa, and agriculture accounts for 23 percent of the continent's GDP. Despite its importance, agricultural productivity on the continent continues to lag due to reasons such as climate change, insecurity, finance, lack of market access, storage facilities, and mechanization.
Recently, technology has emerged as a solution to these issues and the need for a technological footprint has given rise to the continent's agri-tech ecosystem. Startups in this space are providing technological solutions to agricultural problems using cutting-edge technologies such as drones, automated irrigation systems, soil sensors, and so on. They also established digital systems to assist farmers in gaining access to markets, inputs, insurance, financing, and knowledge to increase productivity.
Nevertheless, Africa's agri-tech space can be considered nascent given the limited number of companies. Existing companies must maximize their potential while welcoming new participants, which will necessitate significant investment in the ecosystem. The region is on track to become the global center of agri-tech solutions, with an estimated value of USD 1 trillion by 2030.
Previously, agritech saw steady growth in funding and a surge in the number of agritech startups. 12 out of 22 startups funded agri-tech ventures disclosed their funding stages, two startups, accounting for 9.1 percent of the total, received loan financing. Over the year, twenty-two startups received funding which represents a 37.5 percent increase over the previous 16 startups.
Generally, Kenya and Nigeria account for up to 96.8 percent of the agri-tech investment. The space has traditionally been dominated by one or two mega-rounds per year, but the dynamics of agri-tech investment are changing, and funding is becoming slightly more diffused as more companies have entered the market.
The agritech ecosystem's journey is a marathon, not a sprint. Many aspects of the agricultural sector still necessitate the use of technology. As a result, it is expected that new companies will flood in and the global population is expected to increase to 8.6 billion in 2030 and 9.8 billion in 2050.
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