Agribusiness will revolutionize the African economy

Articles 1 February 2018

By Jean-Claude Bastos de Morais, Founder & CEO, Quantum Global Group

There’s a stark difference between agriculture and agribusiness. The latter will raise the stakes of the African economy. While agriculture has been practiced since 9th century BC in Africa, agribusiness started to take form in the late 20th Century.

Agribusiness can be defined as the commercialization of agricultural production. However, its definition does not do justice to the huge avenues it covers. Agribusiness organizes and progresses the agricultural cycle with high-yielding modified crops, agrichemicals, farm machinery, and breeding. Distribution and marketing of the agricultural products is also included under this umbrella, thus reducing the throes of retail. It’s an integrated system that can be easily managed by a very small community or a full-fledged agricultural organization.

If you look closely, agriculture is analogous to the Homo erectus and agribusiness is akin to the Homo sapiens. Lying in the same evolutionary chain makes it possible for a small crop field to be developed in a sophisticated farm, rife with technological facilities and high yield. Agricultural scientists are worried about African agriculture’s current state of affairs.

Farmers who work on small holds of farms lack equipment and technical know-how, resulting in a small harvest that is failing to feed the growing demand. This can be solved by Agribusiness. Countries like Ghana and Nigeria are taking note of the impending doom. To overcome hunger, Africa needs to increase food production by 60% in the next 15 years. It’s the same with cash crops. The demand for chocolate will increase by 25% globally in the next five years.

Thankfully, while there are old farmers sticking to the traditional farming methods involving sickle and cattle, the newer generation is pushing industrialization on the stage. Young African entrepreneurs are investing time and capital in developing tools to help agribusiness flourish.

One such example is Peris Bosire, an Innovation Prize for Africa (IPA) nominee. She co-founded FarmDrive, a financial technology company that had developed a revolutionary mobile app. The application creates an alternative risk assessment model for farmers based on the data it collects. The new risk-assessing methodology increases the acceptance rate of loan application put forward by the African farmers.

Similarly, entrepreneurs and innovators at Fábrica de Sabão, an Angolan hybrid innovation hub established by the Quantum Global founder, have created various tools to facilitate agribusiness practices. Renewable power sources and informative mobile applications crafted at Fábrica de Sabão hints the trend of agribusiness growing among poor African farmers.

There are several obstacles in the way. Professor Lungisile Ntsebeza argues that modernization can be harmful to the African agricultural sector. “We must use technology; we must use research to boost farming. But the vision of building and promoting small-scale farming should be the guide, not large-scale farming,” explains Professor Ntsebeza.

The African agricultural industry needs a value-added approach and investment companies like the Quantum Global Group are trying to provide that. Yet, what Professor Lungisile Ntsebeza revealed also holds true. A middle ground is needed to overcome the obstacles of immediate harmful effects of modernization so that agribusiness can thrive and improve the overall African economy.

Source: Speaking Tree