Digitizing Value Chains in Africa

a94cbc86-8139-408a-8f4e-fd5b4e197b6fAgriculture in Africa is an approximately $300 billion per-year sector, driven largely by smallholder farmers. Improving the production and productivity of smallholders will be critical for the economic growth of African countries. However, agriculture financiers (e.g., governments and donors) and private companies find it challenging to reach smallholders to enable and incentivize production, provide inputs and liquidity, and procure produce.

In Nigeria, for example, the government only had a 10 percent success rate on its annual fertilizer subsidy program to farmers nationwide due to process inefficiencies and loopholes created by unscrupulous actors across the agriculture value chain. By implementing a digital payment platform developed by Cellulant, the Nigeria government has been able to achieve a success rate of more than 90 percent for its fertilizer subsidy program.

Cellulant developed the agriculture e-wallet platform, called Agrikore, and connected more than 2,000 agro-dealers in Nigeria to serve as “agents” for transaction points. Farmers transact with the agents to receive subsidies in their mobile phone e-wallets with which to purchase fertilizer. By the end of 2014, Cellulant had registered approximately 15 million farmers on the platform and was helping the Nigeria government successfully disburse $200 to $300 million in fertilizer subsidies every year to smallholder farmers. Cellulant’s digital platform has been instrumental in raising yields and increasing food production across Nigeria. It is estimated to have more than doubled smallholder household income from $700 to $1,800 per year.

The Liberia government has also implemented Cellulant’s digital platform, which is powering the disbursal of $9 million in subsidies to Liberian farmers. Agrikore is a powerful digital platform for organizing players across the agricultural value chain—including farmers, aggregators, off-takers, agro-dealers, governments, and commodity buyers—and digitizing their payments and exchanges, thus providing value to all participants and de-risking the market. Cellulant’s platform also accommodates the distribution of other important services (e.g., microloans, banking services, and insurance as well as farmer advice and training) to farmers and bottom-of-the-pyramid consumers in rural areas.

Consumer goods manufacturers looking to extend and digitize their supply chains can also utilize this platform to purchase produce from smallholder farmers. A major milling company in Nigeria recently partnered with Cellulant in this regard to purchase more than 40,000 tons of rice directly from smallholder farmers.

 

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Published:

  • Cellulant, “What We Do”; AGRA 2017
  • CHICAGO COUNCIL ON GLOBAL AFFAIRS’ “Youth for Growth: Transforming Economies through Agriculture” report, March 2018

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