Fact: You cannot talk about African economy without including the agricultural sector. Agriculture supports the larger part of the African economy. Furthermore, 65% of the African population secures employment in the agricultural sector. The sector also covers 32% of the African gross domestic product (GDP). However, drought, inadequate experts, equipment, and labor hinder proper growth. The problems make it hard for the sector to sustain the high growing population. The growing population will hit 2 billion come 2050.
However, the African entrepreneurs are giving people hope in the sector. They are trying to work hard to make the sector much dependable. From assisting farmers to increase their yields to offer better markets entrepreneurs are indeed playing a vital role. Furthermore, investors are also attracted to the agricultural sector. According to the recently released African Tech Startups Funding Report 2017, the agri-tech within Africa got a total of $13.2 million in 2017. This was the largest funding raised by any sector in Africa. This confirmed the periodic rise from 2015. The sector raised $50,000 in 2005 which increased by 8,660% in 2016 the number further increased by 203% in 2017.
The larger share of the funding went to Twiga Foods from Kenya. The startup raised $10.3 million of the round that closed in July 2017. Twiga Foods uses technology to centralize the divided purchasing power. The startup launched in 2014 and it mainly focuses on urban retailers. This helps the retailers to save on the cost and time of going to the market to fetch for the products. They instead receive the products of high quality at their doorsteps. The larger market is the main reason on why more startups are coming up in the agriculture sector. Furthermore, the investment is more of macro-economic. This is because of the fact that people need to feed. This fact also led to the launch of Farmcrowdy.
Farmcrowdy is a Nigerian based startup. The startup gives investors a chance to sponsor farms and earn profits. The startup got $1 million funding in a round that ended in December 2017. There is much attention to the high demand for food as the population is on the rise. Furthermore, investors are sure of getting returns from their investments in agri-tech startups. Investors at Farmcrowdy are looking at the opportunity of scale that is in the agriculture sector. The Nigerian agricultural sector presents $100 billion to the startup. They are also targeting more than 80 million hectares of possible farmlands in Nigeria. With the growing population of 189 million, there is hope of positive growth for both the startup and the country. GreenTech Capital Partners Company is one of the investors in the Farmcrowdy. The company also invests in AgroCenta in Ghana.
The agriculture market in Sub-Saharan Africa will go up from 4200 in 2015 to $1 trillion in 2030. This is according to Food and Agriculture Organization (FAO). This expectation in growth will probably attract more investors into the continent. Furthermore, funding for the startups will also rise.