Reflections on a week with the Prime Minister’s trade delegation

Together with the rest of the Prime Minister’s business delegation to Africa

Two weeks ago Farm.ink was lucky enough to join the Prime Minister and 28 other businesses on the UK’s trade mission to South Africa, Nigeria and Kenya. As one of just three companies representing the agricultural sector, I was asked to reflect on the following question:

If the UK wants to be the G7’s biggest investor in Africa, how important is farming?

Africa is facing a jobs crisis

The Prime Minister’s speech in Cape Town
“Between now and 2035, African nations will have to create 18 million new jobs every year just to keep pace with the rapidly growing population. That’s almost 50,000 new jobs every single day, simply to maintain employment at its current level.” — Theresa May

It was day one of the trade mission and we landed in Cape Town to a 5 a.m. official welcome. Fully caffeinated, we made our way to the conference centre for the Prime Minister’s keynote speech. The speech touched on everything from terrorism to climate change, food security to corruption but what stood out for me was the quote above.

2035 is just 17 years away, an incredibly short timeframe in which to create meaningful change. The Prime Minister spoke of the need for private sector investment to drive job creation but can manufacturing and industry really drive this level of job growth?

The last 17 years does not bode well

To get a sense of what might be possible by 2035 I took a look at macro-economic trends in sub-Saharan African (SSA) economies over the last 17 years. The chart below tracks the share of total GDP over time and what is striking is that we really don’t see any trend towards manufacturing and industry. In fact, these sectors have declined as an overall share of GDP.

Data source: World Bank

When we look at jobs across the continent we find that the last 17 years has borne only a subtle shift away from agricultural employment. In the year 2000 in SSA, 66% of those employed were employed in agriculture. Last year that figure was 57%. These figures are especially stark when compared with the pace of change in the East Asia & Pacific region.

Data source: World Bank

Looking at regional level figures is a rather blunt instrument by which to understand trends in African economies. South Africa’s split of GDP will, of course, look very different to that of Kenya.

Below is a country-level view where each country’s colour represents the percentage of its population that resides in rural areas. While many markets across East and Central Africa boast rapid economic growth, it’s important that we don’t forget their populations are still predominantly rural.

In the words of Amadou Sy, a Fellow at Brookings:

SSA countries, unlike East Asian countries, have not yet been able to turn their farmers into manufacturing workers, diversify their economies, and export a range of increasingly sophisticated goods. What is worrisome is that there is not much time left for transformation.

Agriculture will have to pick up some of the slack

The role of agriculture in development is hotly debated. It’s often argued that labour is far less productive in agriculture than in other sectors, and so for economies to develop you need to transfer jobs away from farming. While this may be true, it’s important not to forget the timeframes required to deliver this.

If the last 17 years are anything to go by, it will take a long time to see a structural transformation in African economies. Meanwhile, every day that the 50,000 new jobs target is missed, the unemployment crisis in sub-Saharan Africa continues to escalate.

I’ve worked with smallholder farmers across various African markets since 2013 and see the potential in rapid job creation through farming. At Farm.ink we set up the Africa Farmers Club online platform in the summer of 2017 with the aim of helping smallholder farmers in Africa to share information and learn from each other. We now have over 150,000 members across 17 African countries.

What’s interesting is that 60% of our users are under the age of 35 and 55% are brand new to farming. These people are the new generation of young farmers.

A lack of job opportunities is driving young, educated people back into the agricultural sector. Rather than wanting to farm like their parents or grandparents, these young people are joining the Africa Farmers Club because they want to learn how to farm higher value crops (e.g. tomatoes, dairy, watermelon) and implement new and improved farming techniques. Not only are they creating productive employment for themselves, each of them will create tens of new jobs as farm managers and farmhands in their local communities.

You can listen to the perspectives of some of these people in the video below.

In Kenya it’s very hard to get a job. I got a job but it wasn’t paying me well and I didn’t like it because I could not pay my bills. I had a friend so we partnered and went into farming. We did great.
- Faidah, Africa Farmers Club member based in Malaa, Kenya

What’s the role of the UK in this?

UK entrepreneurs can help drive innovation

Our company, Farm.ink, was founded by three people: two from the UK and one from Kenya. We combine British tech expertise with Kenyan entrepreneurship to build services that really work for young farmers. Twiga Foods (Kenya) and Hello Tractor (Nigeria) are two other examples of innovative and successful agricultural start-ups whose top teams have combined international and local talent.

UK capital can get things off the ground

Farm.ink, Twiga Foods and Hello Tractor have all benefited from UK and US capital. All of these companies started in notoriously difficult markets with new and unproven business models. Challenge funds and seed grants are incredibly helpful to new startups and give them the time and space to find product/market fit in a low-risk way. After this stage, these companies need funding that is flexible and investors with the right incentives, patience and experience.

UK research expertise can solve pressing challenges

We at Farm.ink have been working with research institutions such as the International Livestock Research Institute (ILRI) and the International Centre for Tropical Agriculture (CIAT) over the last year. One of the things that’s been surprising is how often there are British accents in the room. UK universities are producing world-leading expertise in the biosciences and we must continue to invest in these programmes.

The UK should offer a co-ordinated package of support

Every year thousands, if not millions, of young people in Africa are turning to farming to make a living but these young farmers are facing serious challenges. Climate change is causing erratic weather patterns, new pests and diseases are devastating farms and decades of intensive farming is leaving soils stripped of their nutrients. The UK needs a co-ordinated package of support: combining private and donor-backed investment, entrepreneurship and research expertise to drive new and innovative solutions to these challenges.