Technological innovation will boost productivity and growth of the African agricultural sector

About one in nine people on earth do not have enough food. In sub-Saharan Africa, one person in four is undernourished. Food insecurity on the continent is rising as a result of conflicts and climate change. There is therefore a desperate need to improve agricultural productivity.

“Currently, there is a second green revolution underway. There is a desperate need for food security and therefore higher agricultural output without compromising resources in the process,” says Frans Weilbach, Agribusiness Industry Leader for PwC Africa in the company’s latest Africa Agribusinesses Insights Survey 2016.

“Innovative technology and advancements in productivity are becoming increasingly important as pressure mounts on food systems,” says Weilbach. “The global population is growing rapidly and the climate is ever-changing.”

Besides ensuring food security, agriculture seems to be the hope of several economies that are hit by the slump in commodity prices, in their plan to diversify.

The agricultural sector is regarded as one of the most critical industries for the African continent due to economic potential and is projected to become a $1 trillion industry in sub-Saharan Africa (SSA) by 2030.

“Advances in technology and innovation are the key to the future of agriculture as agribusinesses strive to feed an increasing population against a background of climate change, scarcity of water and a host of environmental concerns,” Weilbach says.

“Agribusinesses are making changes to go high-tech. From data-gathering drones to artificial intelligence farming, technology is making the agricultural sector more precise and efficient as agribusinesses push for increased profits.”

More than half (58.8 percent) of survey respondents consider investment in Africa as an opportunity for their businesses to expand. The top four countries they are planning to invest in are Zambia, Botswana, Tanzania and South Africa.

PwC’s Agribusinesses Insights Survey 2016 was carried out among a group of African agribusinesses that are mainly focused on delivering agricultural and related services to primary producers. The survey focuses on the strategic challenges that agribusiness leaders face in their businesses, while on the other hand it highlights areas where technological innovation is already taking place and where it can make a difference in the future.

With increased pressure on the profitability of farming and agricultural business activities, the agricultural sector is forced to be an early adopter of new technologies in order to improve the productivity and profitability of the sector.

Survey respondents noted that the availability of real-time data is the biggest opportunity for technological innovation. Drones are also fast becoming a real green-tech tool. Global research shows that artificial intelligence (AI) farming will be the main enabling factor in increasing the world’s agricultural production capacity to meet the demands of the growing population. This goes hand in hand with precision farming and other technology trends.

The majority of survey respondents (76.5 percent) agree that AI farming will make a major contribution to increasing capacity in Africa over the next ten years. However, only 47 percent of businesses had already invested or plan to invest in the development of AI farming capabilities for primary production. This could be due to the cost of implementation, which was noted as the biggest restriction to the use of AI farming capabilities (64.7 percent).

“It is predicted that technological innovation will act as a catalyst in lifting agribusiness to the next level in Africa. The winners will be those agribusinesses that seize the opportunity to create new opportunities through technology – they will be able to reach their strategic goals faster and more efficiently,” concludes Weilbach.