It is predicted that Africa’s population will peak at a quarter of the world’s population by 2050. Despite a rapidly growing population, there are some socio-economic factors that may pose challenges to the continent’s development, such as the gap between infrastructure and population growth. Strong infrastructure is the lifeblood of economic development because it attracts investment, ensures job opportunities, and increases output; thus, poor infrastructural development impedes economic growth.
Despite these challenges, Africa has a rare bright spot that is believed to be a potential game-changer: the technology wave. Some have argued that with an upward slope of the technology curve in Africa, the continent need not worry about infrastructural issues. Technological advancement has the potential to lift Africa’s growth on its own indeed. In some areas, technology in Africa is proven to work effectively beyond the impediments caused by a lack of proper infrastructure in the continent. But could it lead Africa’s next growth frontier?
Over the years, Africa has had challenges in FinTech, agriculture, health, smart city, education, and energy. These difficulties have hindered Africa’s economic growth. Now, technology is changing the face of Africa’s economy, tackling the challenges in those key sectors.
Agriculture has always been a crucial sector for the African continent, providing a source of livelihood for millions of people. According to the World Bank, the agricultural sector employs 65% of the workforce and contributes 32% of GDP in Africa. With such significant contributions, no wonder agriculture is seen as the backbone of many African economies.
However, the African agricultural industry is facing a number of challenges that threaten its growth and sustainability. One of the biggest challenges is low productivity, which is compounded by climate change, lack of technical expertise, and a migration of young people away from rural areas and into cities. These challenges have made it difficult for farmers to produce enough food to feed their families and to generate enough income to support their livelihoods.
Despite the challenges, entrepreneurs in Africa are increasingly seeing opportunities in the agricultural sector and are developing solutions that enable farmers to increase their yields and access markets. Agricultural technology start-ups have raised $800 million globally in the last 5 years. Investors have also recognized the potential of Africa’s agricultural industry as there is potential to reach a large market.
According to Disrupt, Africa’s recently released African Tech Start-ups Funding Report 2017, agro-tech start-ups received US$13.2 million in funding last year, the fourth largest of any sector. This was an increase of 203% from 2016, demonstrating the rapid growth of agro-tech businesses in Africa. In just 2015, funding for agro-tech start-ups was only $50,000, showing a significant increase year on year.
The African agricultural industry is facing challenges that threaten its growth and sustainability. However, with the increasing interest from entrepreneurs and investors, there is hope for the sector to overcome these challenges and to continue to contribute significantly to the continent’s economy and the livelihoods of millions of people.
The introduction of new technology has revolutionized the agricultural sector, making it more efficient and productive than ever before. With the use of advanced machinery, precision agriculture techniques, and innovative irrigation systems, farmers can now grow crops faster, with higher yields, and at a lower cost. The latest technologies such as drones, GPS, and smart sensors have enabled farmers to monitor their fields, track soil moisture levels, and detect crop diseases in real-time, allowing them to take timely corrective actions.
Moreover, the application of genetically modified organisms (GMOs) has also been introduced in the agricultural sector. These genetically engineered crops have been designed to resist pests, withstand harsh weather conditions, and produce higher yields. This technology has been a game-changer for farmers, as it has significantly reduced crop losses, increased production, and improved the nutritional value of crops.
The introduction of technology has also led to the emergence of precision agriculture, which involves the use of data analytics and machine learning algorithms to optimize crop yields. Farmers can now use a range of sensors and monitoring systems to collect data on soil moisture, temperature, and nutrient levels, which they can then use to optimize their farming practices. This has not only increased the efficiency of farming but has also reduced the environmental impact of agriculture, as farmers can now minimize the use of fertilizers and pesticides.
In conclusion, the introduction of technology in the agricultural sector has had a significant impact on the way farmers grow and harvest crops. With the use of advanced machinery, precision agriculture techniques, and GMO crops, farmers can now produce more food with fewer resources, reducing the environmental impact of farming and improving food security for people around the world.
In FinTech, mobile money services have encouraged financial inclusion which was a long-term challenge for Africa. Africa’s unbanked population has been supported to get access to financial services, helping households to save and obtain loans or credit at lower costs. Despite poor infrastructure to support a proper banking system, financial services across Africa have flourished as a result of mobile technology. Tech start-ups mostly established by young Africans are capitalising on this technology while mimicking the Silicon Valley model to create solutions tailored to the African market. This is now creating employment opportunities, boosting demand, and increasing consumption.
Technology could be an alternative for most African countries to diversify their economies away from heavily relying on commodity exports. It was surprising that despite the current oil crisis the world is facing, much emphasis during Uganda’s presidential debates was about what the candidates would do to ensure that Uganda produces more oil. This shows how much the continent views commodities as the number one driver of economic growth regardless of the persisting risks caused by a lack of diversification. Evolving technology should therefore be used as a tool to boost capacity in other sectors, help countries diversify away from the heavy reliance on commodities, and also strengthen cutting edge innovations that enable them to compete on a global level.
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