Investing in agriculture in Africa faces a significant challenge: the lack of comprehensive, accessible, and context-rich information. While agriculture is the largest employer on the continent, contributing 30-40% to the GDP, the sector remains hindered by a severe information gap, which limits its potential for growth and innovation. This information problem exists across various stages of the agricultural value chain, from production to investment decisions, and affects stakeholders such as governments, investors, and farmers.
Historically, efforts to bridge the data gap in African agriculture have been underway since the liberalization of the 1980s. Donor-funded programs and public initiatives, such as radio broadcasts and market information systems, were established to provide basic agricultural news and virtual extension services. However, despite these efforts, they have often failed to create the comprehensive data systems needed to drive long-term growth and transformation in the sector. Modern agricultural technology startups have emerged to tackle this issue by developing information-as-a-service products or integrating data into their existing solutions. Yet, even with these advancements, many of these startups face challenges in understanding how their specific datasets relate to broader market trends, which limits their ability to drive impactful, large-scale change.
The key issue is that agricultural value chains are deeply interconnected, and a lack of accessible, integrated information makes it difficult to understand the entire ecosystem. Without this information, stakeholders are left in the dark about how different elements of the value chain interact and what is needed to drive progress. As highlighted by researcher Bright Simons, most agricultural interventions in Africa focus on improving the supply side of the value chain, such as enhancing production capacity. However, a more significant opportunity lies in understanding and responding to demand, which is often ignored. The plantain market, for example, highlights the importance of backward information flow, where consumer demand needs to inform production decisions. By establishing robust information channels that flow from the consumer to the producer, a more comprehensive understanding of the market can be achieved, driving better decision-making at every level.
The absence of critical data also impedes investment decisions. In many African countries with a history of agricultural activity, there is no clear understanding of how much investment is flowing into the sector or where the gaps exist. This lack of transparency makes it difficult for capital managers to make informed decisions about where to allocate resources. During the 8th Annual Learning Event hosted by Mercy Corps AgriFin in Kenya, it became clear that building a healthy agricultural sector in Africa is not primarily a technology problem, but rather one of information and coordination. Investors and policymakers are operating without the necessary data to assess agricultural innovation, productivity, and commercial viability.
The agricultural sector in Africa would benefit greatly from adopting practices seen in other industries, such as fintech. Publicly available, aggregated data about key metrics like financial inclusion and mobile payment growth have provided transparency into the performance of the fintech sector and helped shape regulatory policies. Similarly, access to comprehensive data about agricultural performance, product adoption rates, and research outcomes could enable better decision-making, improving the investment climate for agriculture.
Despite the challenges, some initiatives are starting to address these gaps. AgBase, for example, tracks equity and non-equity financing in agri-tech companies, providing valuable insights into investment flows. However, this effort is still in its early stages and needs to be expanded. Data on agri-tech financing becomes even more valuable when contextualized within broader agricultural financing trends, emerging business models, and market dynamics. By enriching data with such context, it becomes possible to paint a clearer picture of the sector’s potential and its challenges, enabling more effective decision-making at every level.
There is also a growing realization within agri-tech companies that data can be a powerful tool. Many are seeking ways to collect and transform data into valuable insights and products. However, the complexity of building viable agri-tech businesses should not be underestimated. Companies like Gro Intelligence, which specialized in agricultural and climate data, struggled to turn their data products into sustainable business models, highlighting the challenges inherent in this space.
Despite these obstacles, the long-term success of the African agricultural sector will depend on creating a robust ecosystem of information. For investors, policymakers, and agri-tech entrepreneurs to thrive, they need access to comprehensive, actionable data that spans the entire agricultural value chain. This will enable them to make informed decisions, improve productivity, attract investment, and ultimately transform the sector into a dynamic and sustainable part of the economy. In this way, agricultural development in Africa will be more than just a series of isolated interventions; it will be a cohesive, data-driven effort that promotes long-term growth and prosperity.
