A compelling projection was made by the World Bank on the future of Agribusiness in 2013. Its report titled “Growing Africa: Unlocking the Potential of Agribusiness”, stated that by 2030, African farmers and agribusinesses could create an African $1 trillion food market. But therein, there were conditions to this growth including access to capital electricity, better technology and irrigated land. For a sector that is the backbone of the continent and Uganda as well, this projection restores tremendous hope in the potential improvement of livelihoods.
A handful of years away from that potentially golden year, 2030, we reflect on how to make that optimistic projection come to life.
In Uganda, the contribution of the agricultural sector to the economy has remained at 23 per cent for the last five years. The sector clearly presents a huge opportunity with 68 per cent of Ugandans employed in it. Production of agricultural commodities has been on a steady rise and so has trade been flourishing even during the COVID-19 pandemic. Productivity, however, is still lower than expected. The government believes in the potential the sector has in helping the economy recover. In fact, there are plans to aggressively promote agro-industrialisation to unlock the potential of production. In the National Budget for the financial year 2021/2022 are plans to develop commodity value chains, multiply fish, poultry and crop technologies and expedite the licensing of digitised commodity markets among other things. To implement this agro-industrialisation agenda, Shs1.67 trillion has been set aside. The Ministry of Agriculture, Animal Industry and Fisheries thinks it is a commendable move. Digital applications are to be supported under the Innovation, and Technological development Shs358 billion budget.
A new breed of tech entrepreneurs like Julius Naika understand too well the implications of these budget provisions. Entrepreneurs like him, want the digitalisation of the sector to take priority.
Naika, the founder and Chief Executive Officer of Famunera, a digital marketplace that sources farm inputs, has a base of 20,000 farmers using his innovation, right from Kampala to the remotest areas in the country. The startup ensures that farmers access quality inputs conveniently through its various digital platforms including websites and USSD code.
Digitisation of the sector is needed to connect farmers to buyers of produce, to help farmers monitor their crops and animals, empower farmers with key information and find genuine agro-inputs among other things. Digitisation is timely as internet access now grows to 52 per cent and more people owning smartphones.
While the government makes mention of digitisation, particularly the use of technology to enhance the extension of services to farmers, it remains unclear how much more it plans to do. Initiatives that include technologies are fairly new and must include incentives that help entrepreneurs like Naika to extend a much-needed service to farmers. At the moment, he dreams of having 1.5 million farmers onboarded on the platform by 2023. However, one factor stands in his way. The high costs of maintaining and acquiring USSD licence or codes.
“Most of our farmers are smallholder farmers in the rural areas without internet. For every farmer on our USSD platform, we spend Shs180 per minute on average. Imagine how much we shall be spending when we hit 1.5 million farmers,” Naika reflects before he adds, “A USSD code should be as low as Shs5. We are innovating in the agricultural space and if the costs of digitising, using the internet are high, it is going to be an uphill battle.”
While the government is very keen on extending broadband infrastructure to the sub-county level, it also just introduced a harmonised excise duty rate of 12 per cent on airtime, value-added services and internet data. Naika recommends subsidised internet costs for at least the agricultural sector because of its imperativeness. He hopes that many more Agritech innovations will be used widely by Ugandan farmers.
The support rendered to innovations like Famunera within ecosystems like The Innovation Village is just a perfect example of how much progress can be registered with AgriTech. During the 2020 lockdown, Famunera was one of the critical service providers at the time, buying and delivering inputs to anxious farmers limited by the lockdown restrictions intended to flatten the curve.
Because of its work in Food and Agricultural supply, Famunera qualified to enter the COVID-19 Relief Challenge set up by The Innovation Village during the 2020 nationwide lockdown. The challenge held in partnership with The 97 COVID-19 Relief Fund was meant to support selected solutions emerging from the challenge in form of cash and/or technical support to the teams inclusive of mentorship and access to the market to scale and grow.
Among the ten teams that pitched, Famunera emerged as one of the winners with a $10,000 (about Shs36 million) cash prize. Naika says that these funds went a long way in enabling the company’s growth. “From October 2020 to date, Famunera saw farmer numbers grow to 20,0000. That was a significant increase. We managed to upgrade our USSD Codes and enabled more features and we are now able to collect more farmer’s data,” he explains.
Future Lab Lead, Samantha Niyonsaba, agrees with Famunera’s lead on the importance of technology in the race towards $1 trillion worth of African Agribusiness.
“We know that the backbone of Uganda’s economy is agriculture, contributing to 50 per cent of exports and 23 per cent of Gross Domestic Product. Many challenges that the sector faces, like low quality inputs, access to credit and so much more can be solved by technology,” Niyonsaba submits.
Currently, the Future Lab under the stewardship of Niyonsaba is working towards realising the dream of a vibrant digital Agripreneurship space in various ways.
The Lab is in touch with corporate partners and farmers who are facing challenges to identify technologies that can support and mitigate challenges. Beyond establishing these relationships, the Lab accelerates businesses with support from the partners as in the case of the 2018 Innovate for Agriculture Challenge and 2020 COVID-19 Relief Challenge.
At the moment, the pandemic rages on and reveals the relevance towards digitising to bridge gaps. The Future Lab at The Innovation Village continues to engage in dialogue on how innovation can transform the sector through monthly corporate webinar series.
