Information technology may be the key to unlocking sub-Saharan Africa’s agribusiness sector, according to a report from PwC.
If better IT can improve business activities along the agri value chain, it has the potential to drive up investment in the sector, providing scaling and vertical integration opportunities, according to the report. It help could simplify compliance obligations for agribusinesses and connect them to resources like crop insurance products that might not be available locally.
Producers could be able to improve land and water use by determining the best crop variety for a particular plot of land; more accurately measure soil nutrients to determine best growing practices and input uses; and connect producers to market information, allowing them to prioritise production of high-margin crops.
A PwC survey shows that 70 percent of sub-Saharan agriculture chief executives are only operating in their “home” countries. However, economic growth in the region, expected to reach 5 percent by 2018, could drive investors to seek opportunities to lengthen supply chains to increase supply. Smallholder farmers in the region represent the greatest potential for increased production efficiency, through shifts toward higher value crops, better soil management, introduction of more weather-tolerant crop varieties and improved access to credit.
The region suffers from some of the worst food insecurity challenges in the world and faces increased stress on its agri resources thanks to demographic trends that include a growing population, urbanisation and a growing middle class.
However, the region also is home to half the world’s fertile but unused land, the report notes, and the crop yield for cultivated land is a fraction of that in regions like East Asia. Increases in efficiency and productivity, driven in part by expanded use of information technology, could turn the region into a net food exporter, the report finds.