- The AfDB has partnered with payments giant Mastercard and committed $300 million to MADE Alliance in a deal aimed at digitalizing farmers in Africa.
- Over three million farmers in East Africa are projected to benefit from the MADE Alliance project.
- Overall, MADE Alliance will provide digital access for 100 million people over the next decade.
A new initiative dubbed MADE Alliance, has set out to mobilizing resources in an effort to digitize farmers and their operations across Africa as the shift towards digital economy gathers pace.
In a deal being powered by the African Development Bank (AfDB) Group in partnership with digital payments giant, Mastercard, MADE Alliance, will see upto 300,000 farmers across East Africa benefit from the programme.
The project was launched on the sidelines of the 79th session of the United Nations General Assembly in September this year by the president of the AfDB, Dr. Akinwumi A. Adesina and Jon Huntsman, Mastercard president for Strategic Growth among other dignitaries.
During its inaugural meeting, MADE Alliance Steering Committee reviewed progress and discussed challenges that African farmers face with respect to digital connectivity. “Farmers are the folks that you don’t see. Banks don’t see them, buyers don’t see them and for the most part, traders don’t see them and neither do insurance companies,” Dr. Adesina said.
He pointed out that “smallholder farmers of Africa live in remote areas with unreliable connectivity and few links to markets, leaving them with no digital footprint and limiting their access to better prices, loans and innovative agricultural inputs like climate-resistant seeds.”
To resolve this challenge, MADE Alliance aims at providing digital access to critical services for 100 million people and businesses in Africa over the next 10 years, Dr. Adesina detailed. He said, in its first phase, the AfDB has committed $300 million looking to bring on board three million farmers in Kenya, Tanzania and Nigeria into the digital economy via Mastercard Community Pass.
Other key partners in the MADE Alliance are Nairobi-based banking giant Equity Bank Group, Microsoft, Heifer Foundation and Unconnected.org. The president was keen to underline that MADE Alliance is private sector-led, but is also anchored in line with the Bank’s regional member countries’ national policies.
“The farmers will benefit from a digital credential that offers access to a network of digital agricultural agents,” Dr. Adesina explained.
Seconding the AfDB president, the Bank’s vice president for agriculture, human and social development Beth Dunford, pointed out that; “Africa is home to 65 percent of the planet’s remaining uncultivated, arable land, and we believe that agriculture is a critical sector to drive Africa’s development.”
Noting that agriculture accounts for nearly 60 per cent of total employment in Africa and accounts for more than 25 per cent of African countries’ GDP, he said digital connectivity will revolutionize the sector and empower the unseen smallholder farmers.
In this regard, he said MADE Alliance will place special emphasis on women because; “Across the continent, there’s no agriculture without women. They provide an estimated 60 per cent to 80 per cent of labour input to the sector.”
“Growth in agriculture is terribly effective compared to many other sectors in lifting people out of poverty, providing degrees of agency to women, for feeding Africa’s people and positioning the continent as a breadbasket to the world,” he noted.
According to Dunford, MADE Alliance has already launched several programs including unlocking affordable digital financial services for sunflower farmers in Tanzania, internet connectivity and digital skilling for farmer cooperatives and clean energy asset financing for farmers in Kenya.
“Our challenge is that the majority of Africa’s food systems producers are smallholder farmers who, simply put, struggle from season to season due to lack of access to quality inputs like seeds and fertilizer, or access to affordable financing to purchase farming necessities,” Dunford said.
He said by boosting sustainable digital access to critical services, MADE Alliance can bridge the needs of Africa’s smallholder farmers. “Digital identities are the gateway to accessing digital services and to high-quality inputs. Through the MADE Alliance, Mastercard Community Pass works with local banks to provide digital credentials to millions of smallholder farmers and women,” he explained.
He also pointed to the fact that an estimated 99 per cent of agriculture transactions in Africa are cash-based and so digitalizing agriculture and the distribution of goods will bring enormous efficiencies to the marketplace, as well as reduce waste and fraud across the ecosystem.
The Community Pass is designed to operate in remote and rural communities which often suffer limited connectivity and poor energy access, he went on to explain.
“This technology meets farmers where they are. To scale these technologies to more farmers in a timely manner, we need to work with farmer cooperatives, networks of member farmers who reap many benefits of doing business as a unit,” detailed the Bank’s vice president for agriculture, human and social development.
He went on to admit that there are challenges involved in bringing these solutions to the farmers but remained confident that; :we believe we can overcome these challenges through capacity building, infrastructure and new models for governments and the private sector to work together.”
“The challenge is that the majority of farmer cooperatives in Africa are not as operationally efficient as they are in other regions, and the prevalence of digital literacy is relatively low. Africa needs significant investment to educate farmers on how they can benefit from digital technologies to access resources,” he said.
MADE Alliance solutions to digitizing African farmers
In an interview with Mastercard, Dunford said the MADE Alliance’s digital services will connect farmers to new buyers and suppliers who are physically far away, but, there will remain the challenge of transport costs.
He maintained that it is critical for farmers and women to have affordable access to digital devices and reliable connectivity if they are to take advantage of the digital economy.
He cautioned that; “Tendencies to centralize digital infrastructure related to agriculture inhibit private-sector participation and make it difficult for businesses to develop sustainable models to serve agricultural communities.”
To mitigate this challenge, the expert advised African governments to create ‘clear models for engaging with the private sector if they are to develop a robust digital ecosystem.’
Also Read: Africa’s new dawn: the rising role of digital and AI in agriculture
MADE Alliance to prioritize women
The Bank’s economist said, since it is estimated that more than half of Africa’s smallholder farmers are women, then it only makes sense to prioritize them in the project.
“Even though the majority of agriculture sector labor carried out by women, however, compared to their male counterparts, female farmers struggle to create a sustainable livelihood in agriculture, because they are less likely to own property titles or other assets often needed to access financial services,” he pointed out.
He also said women farmers have less access to information and extension services, and they lack access to inputs such as seeds and fertilizers.
“Women are disproportionately impacted by climate risks. Collectively, these challenges result in women farmers typically producing up to 20 per cent to 30 per cent less output than male farmers,” he added.
To resolve this challenge, Mastercard’s Community Pass will help women gain access to critical service providers like banks and agricultural buyers, as well as create transparency in their transactions.
“Women are the backbone of African economies, and investing in women entrepreneurs fosters women’s empowerment and agency over decisions around business, family and community. Investing in Africa’s women entrepreneurs is smart economics,” he concluded.
