The recently released Africa AgriFood Tech Investment Report 2024 sheds light on the evolving landscape of agrifood technology investment across the continent. Despite global economic uncertainties and reduced deal activity, Africa’s agrifood tech sector demonstrated remarkable resilience and adaptability. The report captures both the challenges and opportunities that define the sector, offering crucial recommendations for stakeholders aiming to enhance food security, sustainability, and economic growth.
The report reveals a nuanced picture of Africa’s agrifood tech ecosystem. While the total number of deals in the first half of 2024 decreased by 27%, overall funding levels have remained relatively stable, reflecting investors' continued interest in the sector. Two categories stand out as particularly dynamic: agribusiness marketplaces and fintech for agriculture, which collectively accounted for 41% of funding and 36% of deal activity. These segments underline the growing importance of digital solutions in addressing long-standing challenges in Africa’s agricultural supply chains.
Agribusiness marketplaces, which connect farmers to buyers, suppliers, and financial services, have emerged as critical enablers of efficiency in the sector. These platforms reduce transaction costs, improve market access for smallholder farmers, and foster greater transparency in pricing. Similarly, fintech solutions tailored for agriculture are transforming how farmers access credit, insurance, and payments. By addressing financial exclusion, these technologies empower farmers to invest in inputs, adopt new practices, and mitigate risks, ultimately enhancing productivity and resilience.
The report also highlights a shift in the geographic distribution of agrifood tech investments. While traditionally dominant hubs like Kenya, Nigeria, and South Africa continue to attract significant funding, there is growing interest in emerging markets across East and West Africa. Countries such as Ghana, Rwanda, and Uganda are beginning to draw attention, driven by supportive policy environments and the rise of local innovation ecosystems. This diversification of investment underscores the potential for broader regional growth if the right conditions are fostered.
However, the sector faces several challenges that could hinder its ability to scale. The report notes a 27% drop in the number of deals, which reflects global economic headwinds and a cautious investment climate. High operating costs, regulatory barriers, and inadequate infrastructure remain persistent hurdles for agrifood tech startups in Africa. These obstacles highlight the need for coordinated efforts to create an enabling environment for entrepreneurs and investors alike.
One of the report’s key takeaways is the critical role of innovative financing mechanisms in unlocking the sector’s potential. Access to capital remains a major bottleneck for agrifood tech startups, particularly those operating at the intersection of agriculture and technology. Traditional financing models often fail to meet the unique needs of these businesses, which require patient capital and a high tolerance for risk. The report calls for greater adoption of blended finance models that combine public and private funding to de-risk investments in the sector. By leveraging concessional funding from development finance institutions, blended finance can catalyse private sector participation and scale up promising innovations.
Another recommendation is the importance of fostering partnerships across the value chain. Collaboration between agrifood tech startups, agribusinesses, financial institutions, and governments is essential for building integrated solutions that address systemic challenges. For example, partnerships between fintech companies and agribusiness marketplaces can enable seamless credit access for farmers purchasing inputs. Similarly, collaboration with government agencies can ensure that innovations align with national priorities and reach underserved communities.
The report also emphasises the need for targeted policy interventions to support the sector’s growth. Governments across Africa must prioritise investments in rural infrastructure, including roads, electricity, and internet connectivity, which are foundational to the success of agrifood tech solutions. Regulatory frameworks should also be updated to facilitate innovation while protecting consumers. For instance, clear guidelines on data privacy and the use of digital platforms can build trust among farmers and other stakeholders.
Capacity building is another critical area for action. As the sector evolves, the demand for skilled labour will grow, particularly in areas such as data analytics, software development, and agronomy. The report recommends investing in education and training programs to equip the next generation of workers with the skills needed to thrive in a technology-driven agricultural economy. Partnerships between academic institutions, startups, and development organisations can play a pivotal role in closing the skills gap.
Sustainability is a recurring theme in the report, highlighting the need to balance economic growth with environmental stewardship. Agrifood tech solutions must address issues such as soil degradation, water scarcity, and biodiversity loss, which are exacerbated by climate change. The report encourages startups to integrate sustainability into their business models and explore opportunities in climate-smart agriculture, renewable energy, and waste management. Investors are also urged to prioritise companies with strong environmental, social, and governance (ESG) credentials, as these businesses are better positioned for long-term success.
Looking ahead, the Africa AgriFood Tech Investment Report 2024 outlines a vision for a vibrant and resilient agrifood tech sector that can drive inclusive growth across the continent. By leveraging technology, fostering innovation, and scaling sustainable solutions, Africa can transform its agricultural systems to meet the dual challenges of food security and climate resilience. However, realising this vision requires bold action from all stakeholders, including investors, entrepreneurs, policymakers, and development partners.
In conclusion, Africa’s agrifood tech sector holds immense promise, offering scalable solutions to some of the continent’s most pressing challenges. The insights and recommendations in the report provide a roadmap for unlocking this potential, emphasising the importance of innovative financing, collaborative partnerships, supportive policies, and sustainability. As the sector continues to evolve, it has the opportunity to not only enhance food systems but also contribute to broader economic transformation. With the right investments and strategic interventions, Africa’s agrifoodtech ecosystem can serve as a global model for resilience and innovation in agriculture.
The author is an applied economist.