Blockchain Technology in Africa is Disrupting the Agricultural Sector

The agricultural sector in Africa remains the main source of livelihood for a large proportion of the continent’s population and a significant contributor to the GDP.  In Africa, agriculture and the innovation around agriculture fundamentally continue to be a catalyst of sustainable development primarily for enhanced food security, secondary, in the reduction of poverty and the overall growth of the continent’s economy. The sector grapples with a myriad of problems. The agriculture ecosystem in Africa is broken at all levels right from the crop and livestock production level to the last mile of reaching consumers. The challenges can thus be classified as follows;

  • Primary production- Farmers hardly receive quality fertilizer and seeds, lowering productivity to 10% of the global average for almost every crop.
  • Pricing information & access to markets- Farmers do not have access to current information on market prices or even access to the trading markets thus demand & supply can’t be matched. This also creates a loophole for middle-men who control the market conditions.
  • Access to financial services- Most farmers in Africa practice small-scale farming and a majority do not have access to bank accounts. Most are therefore undocumented with any financial services thus making their creditworthiness hard to determine. Due to this, many have no access to credit which they require to scale their farming.

The Rise of the African Digital Farmer

Amidst these problems coupled with the lack of basic infrastructures such as roads, internet access, and electricity, mobile phones have become ubiquitous in Africa and their use has transcended luxury to become tools of production and trade. The impact of mobile phones continues to be felt beyond the telecom sector as innovation to solve day to day problems are developed particularly for the agricultural sector. The penetration of mobile phones in Africa is currently at 43% according to the latest statistics from GSMA. The successful uptake of mobile phone by farmers in countries such as Nigeria and throughout Kenya has led to mobile innovations around some of the main challenges that farmers face: access to information, markets, and capital.

Deployment of Agrikore in Nigeria- a Cellulant blockchain solution for the Agricultural sector in Africa

Deployment of Agrikore in Nigeria- a Cellulant blockchain solution for the Agricultural sector in Africa

The agricultural market in Africa is projected to grow to $1 Trillion by 2030. The sector is, however, an unsystematic and complex value chain that presents challenges in keeping and maintaining a database of all stakeholders;farmers, insurance companies, financial service providers, development partners and, governments.

Can technology be deployed to automate the value chain from the farmer to the consumers and bring some order in a transparency and instill a level of trust among the different players?

To solve this problem, Cellulant through the use of blockchain technology has a unified payment and e-commerce platform powering payments for 17 million farmers. The potential blockchain technology has– as a transparent and decentralized ledger in disrupting various sectors in Africa is irrefutable.

Understanding BlockChain

Blockchain technology is a decentralized digital ledger that keeps immutable records of transactions. It maintains a network of computers working together as well as independently, to keep and verify records in such a way that once a record has been written and accepted by all the computers in the network, it cannot be altered. It, therefore, provides a means to record, certify, and transfer assets without needing to rely on a bank, or other middlemen. The use of blockchain technology continues to make headlines for its use in the deployment of digital currencies such as bitcoin. The deployment of blockchain has gone beyond the financial sector and the technology is being used to disrupt other sectors such as agriculture.

How can Blockchain technology be applied to agriculture?

Blockchain technology can provide stakeholders with a system that organizes and digitizes this value chain as well as provides access to potential investors in a central database. It can serve as a real-time management system for supply chain transactions and financing to provide information (on the state of farms, inventory, contracts etc.) and maintain an identity database of partners.

How is Cellulant leveraging Blockchain Technology?

In Nigeria, Agrikore -powered by Cellulant is an automated smart- contracting payments marketplace that offers digital financial services & customer relationship management system for Agriculture. Agrikore was developed using blockchain technology to ensure every stakeholder in the agriculture value chain can do business in a trusted and transparent environment.

Agrikore has, for the first time, brought together all the various actors in Agriculture; Farmers, Agro-dealers, input producers, produce off-takers, bankers, commodity exchanges, warehouse receipt operators, logistic companies into a single transparent ecosystem.

Our Co-founder Bolaji Akinboro explains how Agrikore’s blockchain technology is being deployed in Nigeria to provide aggregated information on the agriculture supply chain and how the system maintains an infrastructure that allows strangers to transact directly. Read his full article here.