Pillar 1
Digital innovations
Gaps (factors limiting innovation and scalability in digital agriculture)
- From the mapping of solutions in the region, most of the products on the market rely on the internet. This is a major limitation given the smallholders often do not have access to the internet and the devices they own are not compatible with channels like “App” and “Web”. Additionally, most developers lack financing to scale up.
- Most developers lack the knowledge to run successful businesses. There is a gap in articulating value propositions, raising funding, developing business plans, day-to-day management among others.
A. Use Support Measures to provide support to actors in the sector that have potential to promote (champion) investments that are building the rails for digitalisation of agriculture
A.1 Tax incentives for software development services, ICT-related services, data processing services
Based on the gaps identified, tax incentives recommended include
- Tax holidays for early-stage fintechs that are focusing on agri-tech startup initiatives
- Set-up of special funds and accelerator programmes to support capacity building of early-stage start-ups
A.2 Provide R&D support, including R&D incentives, funding for basic research and R&D grants
Based on the gaps identified, R&D support of the following nature is recommended
- Set-up of special funds to finance the development stage of software development
- Tax allowances for companies (private sector, venture capitalist, investment funds and other development partners) that are focusing on research and development activities in digital agriculture innovation
A.3 Organise accelerator and incubator programmes for early-stage businesses
These programmes should focus on the following:
- Development of USSD and IVR applications – In the short run, mobile solution developers should be encouraged or even incentivised to explore building solutions that do not require active internet connections
- Bundling of service offerings – Private sector-led initiatives should be encouraged and possibly incentivised to bundle multiple offerings in their value proposition. Digital solutions with such enhanced value proposition are more likely to increase farmers’ willingness to pay for digital solutions.
- Development of solutions that target farmer collectives and groups
To bring the above to life, it is recommended that governments collaborate with industry bodies such as fintechs and innovation hubs. Government’s support would be best delivered in terms of providing the necessary funding required to obtain market data
Pillar 2
Data infrastructure
Gaps in the data infrastructure required for digitalisation of agriculture to thrive
- Absence of state-run soil and weather data Application Programming Interfaces (APIs). This means that state-collected data resources are excluded from many of the region's digital solutions.
- Absence of robust national agri-statistical national data sets. Many of the countries in the region do not have national agri-statistical data infrastructure. This means that many digital solutions are not aligned with the market.
- Absence of robust linkages between land and person identifiers. Despite the roll-out of national identity schemes in many Commonwealth African countries, the different identifiers in Africa are not linked. This hence limits the transformative power that existent data can have in the creation of relevant digital solutions for farmers in the region.
- Fragmentation of data. There is a lot of data on the sector that is collected by different development partners and government bodies. However, this data is not always used (or re-used) for further production of information that would feed into decision-making.
B. Boost investment in data infrastructure and their key enablers
B.1 Identifiers that should be in place include land identifiers, farmer registries and identity systems
Obtaining these identifiers would be a requisite for benefiting from government programmes such as subsidies, tax rebates and any capacity building done by the government
B2. Creating linkages between the different identifiers that are issued by government
When systems are interoperable, there is easy transfer and linkages between data sets. This would enable easy identification and targeting of the right beneficiaries. Additionally, it is much easier and more convenient for new use cases of data to emerge and systems to be built on top of each other when there is interoperability.
B3. Formulating mechanisms through which Government can ensure the quality of data and criteria for sharing government-collected data with stakeholders
C. Boost investment in data infrastructure and their key enablers
C.4. Investing in regular decennial Agricultural Census activities. This avails digital solution developers with a quantitative summary of the data- -centric needs of the population, hence enhancing the possibility of developed digital solutions succeeding in the long run
C.5. Package Government issued weather data as open APIs Governments could package soil and weather data in form of open Application Programming Interfaces (APIs) such that solution developers can easily utilise these data in their solutions at no cost, rather than undertaking expensive processes to collect it on their own.
C.6. Avail high-quality open-source datasets from regional bodies like FAO and the European Space agency to in-country digital solutions
Pillar 3
Business development services
Gaps (factors hindering the flow of financing to digital innovations in agriculture)
- Existence of a significant number of largely subsistent farmers. More than 60 per cent of the population of Sub-Saharan Africa is smallholder farmers. Financial institutions are not willing to finance smallholders because they lack the required collateral and proper records.
- Low state-provided expenditure on government research and development into smart farming. Government expenditure on agriculture innovations has been critically low. There is also limited evidence of several large-scale private sector investments in smart farming and digital innovations research in the region.
E. Work with development partners to support developers to be able to fully reap the benefits of digitalisation
E.1 Focus on using sustainability models Government and Development Partners that engage with private sector actors will need to place sustainability at the core of their engagement.
While handholding and grant funding is necessary for solutions to kick off, a graduation approach needs to be taken with time. Below are the two core phases in the graduation approach
- Development and product roll-out: Due to the high costs involved in this stage, there would have to be a lot of subsidisations by government and development partners
- Product expansion and roll-out to the mass market – Government or development partner support phases out and private sector providers attract alternative debt and equity investments
The Base
Enabling environment
Gaps in Africa’s enabling environment for digitalisation
- Existing laws are not always aligned with the fast pace of technology evolution – The current rules and regulations being used by many Governments in Sub-Saharan Africa were developed in the late 1990s and early 2000s. The pioneering laws and policies made little or no mention of emerging digital technologies such as big data and analytics, blockchain, the Internet of Things, robotics, machine learning, artificial intelligence, unmanned aerial vehicles and the privacy-related complications of dealing with farmer data with a wide range of unique identifiers.
- Existence of a significant number of rural households that cannot afford mobile broadband – In Sub-Saharan Africa, the poorest 20 per cent on average would need to spend more than 16 per cent of their monthly income on 1 gigabyte of data. This hence means the cost of connectivity is prohibitively high for a typical rural-based subsistent smallholder farmer.1 The high cost of mobile broadband connections locks out a significant number of potential consumers of digital agriculture solutions.
- Existence of a significant broadband coverage gap – Only 24–37 per cent of farms of less than 1 hectare in size are served by third-generation (3G) or 4G services. This eliminates the people in these areas from the pool of potential consumers of solutions that are reliant on the internet.
- Existence of a large percentage of the population uncovered by mobile network coverage – Although access has been slowly rising, only 42.8 per cent of the population in Africa had access to electricity in 2016, far less than any other developing region. More than 600 million people in Africa live without electricity, including more than 80 per cent of those residing in rural areas. This hence means that mobile network operators in these areas have to incur higher costs to set up as they must include more expensive power alternatives for mobile sites, consequently making connections in these areas prohibitively expensive.
1 Global System for Mobile Communications (2020). The state of mobile internet connectivity 2020.
F. Put in place national strategies that seek to close the access and usage gaps ensure internet is for all
F. 1 Use Tax incentives to encourage adoption of digital technologies Based on the gaps identified tax incentives recommended are:
- Income tax holidays for providers to extend 3G and 4G connectivity to hard-to-reach rural areas where smallholders are located
- Removal or reduction of excise duties on imported mobile devices
- Reduction of import tariffs on mobile devices
- Removal or reduction of internet-related taxes. Some of the hindering taxes in Commonwealth countries in the region include: (1) Tanzania: US $435 licensing fee for online content creators; (2) Kenya: as of 2018, duty tax on voice, SMS and data services increased from 10 percent to 15 percent Zambia: US $0.03 daily tariff on internet phone calls (VOIP); (3) Uganda: July 2021 – internet users pay a 12 percent tax on data packages, bringing total tax on internet use to 30 percent after factoring in the existing 18percent Value Added Tax (VAT)
G. Use Regulation to facilitate the adoption of digital technologies by the agriculture and food sectors
G.1 Set robust regulation regarding the use of farmer data in digital agricultural solutions
In many of the countries in the Commonwealth Africa, there is a void of regulation that covers the critical aspect topics of farmer data protection in the creation of digital agricultural solutions. Digital solutions that have primary focus on the creation of alternative credit scores for farmers in many places may operate without concrete guidelines regarding the ethical use of farmer data.
G.2 Formulate regulatory measures (such as standards) to guide the use and implementation of digital technologies and advanced technologies (e.g. Blockchain, satellite imaging, AI and 5G).
H. Put in place clear standards for data sharing and management
H.1 Set clear standards for collecting and maintaining national statistical data
Commonwealth Africa
Conclusions
In conclusion, the most undeveloped pillar in the region is data infrastructure. This is despite the role that the pillar plays in unlocking inclusive innovations and reducing the cost for providers of digital solutions. Developing and investing in this pillar would thus put in place the rails for digitalisation to thrive. In developing the right data infrastructure, governments in the region ought to collect universal data and set up interlinked identifiers in tandem with other infrastructure.
The following are necessary for the recommendations to yield results.
Strong implementation. That is, policies need to be backed by clear strategic and implementation plans.
For the policy recommendations to have an impact, there is a need for strategic plans that stipulate specific strategic objectives and well-defined activities whose execution would realise the desired impact. Additionally, as part of the process of developing the strategic plan, the capacity of the ICT and other Government Ministries to execute the plan would have to be assessed.
Based on this assessment, recommendations on capacity building needs must be made. As part of the process of developing the strategic plan, proper monitoring and evaluation framework has to be in place. This monitoring and evaluation programme would include baselines, midlines and end-lines. This would be to ensure that there is the tracking of the performance against the strategic plan at activity, output, outcome and impact levels.
The above has been clearly spelt out because though the African region has policies, there is a significant gap when it comes to implementation and monitoring.
Capacity building at a policy level is required.
Capacity building of key decision-makers is necessary to empower them to make rules and regulations that are responsive to the fast-paced nature of technology innovations.
Capacity building could be through the following:
- Facilitating benchmark visits to other Commonwealth countries where laws on technology are updated.
- Working with training partners that would carry out a capacity gap assessment and thereafter develop targeted training programmes.
- Identification of a capacity-building partner to develop and rollout the relevant capacity building programme.
- There is a need to use an integral programming approach that involves different ministries as opposed to using only the ICT ministry.
Having an empowered pool of policy and regulation actors would equally have trickle-down effects on policies that are passed.
