- Strategic investments in global aid can play a key role in overcoming systemic barriers to achieving Africa’s $1 trillion food economy by 2030.
- Two critical priorities for enhancing food in Africa include the implementation of technology-driven solutions like solar-powered refrigeration systems and e-procurement platforms, as well as improving physical infrastructure for food storage and transportation.
- Collaborative partnerships involving multiple stakeholders can empower African farmers and food businesses by providing access to digital technologies, financial services, and market platforms.
Global aid is essential for realizing Africa’s $1 trillion food economy, as it can support sustainable growth by addressing obstacles, enhancing resilience, and unlocking the continent’s agricultural potential.
Furthermore, global aid is crucial for nurturing trade and economic integration, which are fundamental to Africa’s agricultural development agenda. The African Development Bank predicts a potential increase in the food and agriculture market from $280 billion annually to $1 trillion by 2030.
However, effective and efficient allocation of this aid is necessary to tackle the root causes of food insecurity in Africa, which include infrastructure challenges, logistical issues, and limited access to finance and digital technology. Therefore, strategic collaboration and investments are needed to prioritize Africa’s agricultural transformation and sustainable development goals.
The ongoing conflict in Ukraine has significantly impacted Africa, disrupting agricultural production, increasing delays, and heightening food security risks. The continent is facing a growing food security crisis, with over 20% of the population (approximately 257 million individuals) currently experiencing undernourishment.
Approximately one-third of the world’s food production is lost or wasted annually, resulting in estimated economic losses of $1 trillion. In Sub-Saharan Africa, this figure reaches approximately 37%, equivalent to 120-170 kg per capita annually. Challenges in infrastructure and logistics contribute to this crisis.
The Food and Agriculture Organization highlights another alarming fact: 30-40% of food produced in Africa is lost before reaching consumers.
With a rising demand and increased exports and imports in Africa regionally and globally, there is a critical need for global collaboration to prioritize infrastructure for food storage and transportation in Africa to address the food security crisis.
Financing Africa’s Agri-SMEs
Access to credit poses a significant challenge for private sector investment in African agriculture, with the African Development Bank estimating an annual financing gap of up to $65 billion. Creating a conducive policy environment for the financial sector to offer more business and financial tools to agricultural small and medium enterprises (Agri-SMEs) is crucial.
In addition, governments could incentivize banks and other financial institutions to develop specialized financial products, such as flexible credit lines or leasing arrangements, to meet the unique needs of Agri-SMEs.
Therefore, by fostering partnerships among governments, businesses, NGOs, and institutions like the UN and USAID, resources and expertise can be combined to invest in technology-driven solutions tailored to Africa’s specific requirements.
Two such solutions include:
- Utilizing solar-powered refrigeration systems, which use solar panels to generate electricity for refrigeration units in cold storage. This helps extend the shelf life of food produce, reduce post-harvest losses, and maintain product quality.
- Investing in e-procurement platforms that offer financial credit to food businesses, providing quick and convenient access to funding without the bureaucratic hurdles of traditional lending processes.
This agility allows businesses to take advantage of emerging opportunities and respond promptly to market demands.
Digital empowerment
Harnessing technology is essential for realizing Africa’s $1 trillion food economy and fostering sustainable growth. Embracing climate-smart farming techniques and utilizing digital platforms like mobile apps and online marketplaces such as Vendease can connect farmers and stakeholders with valuable information and markets, empowering them to make informed decisions.
Capacity building ensures that farmers and stakeholders have the necessary skills and knowledge to effectively utilize technology in agriculture.
These various approaches will enhance agricultural productivity and improve food security. For instance, in Nigeria, programs like the Agricultural Development Programme incorporate and utilize advanced technologies in agricultural production, processing, and utilization.
The program offers training initiatives to smallholder farmers on smartphone usage and agricultural applications, enabling them to access market data, weather forecasts, and financial services through their mobile devices.
Global entities must work closely with their African counterparts to address the complex challenges related to infrastructure, logistics, financial accessibility, and digital technology. This collaboration involves investing in projects to develop infrastructure such as road and rail networks, cold storage facilities, and market infrastructure to improve connectivity and efficiency within agricultural value chains.
Expanding horizons
Efforts should also focus on expanding access to financial services, including microfinance, agricultural credit, and insurance products, to empower farmers and food businesses to invest and grow.
Digital technology is crucial for empowering farmers and food businesses, providing access to essential information, financial services, and market platforms to optimize operations and expand market reach.
Collaborative partnerships between global entities and African stakeholders are vital for developing tailored digital solutions that address the unique needs of African farmers and food business owners.
Examples of digital literacy programs include specialized agricultural applications and digital payment solutions that enhance productivity and profitability.
By leveraging digital technology and fostering collaboration, these initiatives can unlock Africa’s $1 trillion agricultural potential, promote inclusive economic growth, and ensure the sustainability of agricultural systems.
This article was originally published by the World Economic Forum.