Social Entrepreneurship is Transforming Sub-Saharan Africa’s Agricultural Landscape
By Nadjad Nikabou-Salifou, UNA-NCA Advocacy Fellow
During a panel discussion that was co-hosted by the Food and Agriculture Organization (FAO) of the United Nations, Humanitas Global, and the Alliance to End Hunger, former President of Malawi Dr. Joyce Banda, powerfully stated:
“When I talk about women in agriculture, women and girls in agriculture, I ask the question, particularly as an African woman leader: why is it that an African woman tills the land, plants the crops, harvests, stocks, cooks, and then eats last and least?”
Her words reflect the reality that gender equality must be at the forefront of creating robust agricultural sectors throughout sub-Saharan Africa.
Dr. Banda’s statement also indicates that achieving agricultural transformation requires us to address multidimensional issues. On one hand, we are faced with the problem of gender inequality, as an estimated 62 percent of women are involved in the continent’s farming, but only one in seven women undertake leadership roles and comprise less than one quarter of agricultural scientists. On the other hand, smallholder farmers generally struggle to gain access to markets and financing.
Farmers rely on financial packages in order to purchase their agricultural inputs, such as fertilizers and farming equipment. However, few lending institutions are willing to assist farmers in this capacity due to the difficulty of assessing a farmer’s ability to repay his or her loan. Furthermore, access to financial support and a market does not necessarily guarantee a fair wage. Farmers lack real-time information about the market price of their produce, and they consequently risk being undercut by middlemen. In view of all these challenges, young Africans find the agricultural sector unprofitable and are deserting the field. We are then tasked to ask ourselves: how do we remedy the myriad of problems faced by the agricultural industry?
Tackling various issues of this magnitude calls for a systematic approach to agricultural transformation, with social entrepreneurs serving as the potential catalysts for change. If we intend to attract young Africans to agriculture, we must show them that they have a place in the agricultural value chain while simultaneously encouraging them to create space for others, especially smallholder farmers and women. Social entrepreneurship gives us the opportunity to create value not only for ourselves but also for our community members.
Social Entrepreneurship Drives Change
Social entrepreneurship is defined in terms of using a business to address a social issue(s) for the general interest of society. Generating profit alone is not enough. Ashoka, an international citizen sector organization (CSO), defines social entrepreneurs as “individuals with innovative solutions to society’s most pressing social, cultural, and environmental challenges…tackling major issues and offering new ideas for systems-level change.” Regarding Africa’s agriculture, social entrepreneurs are now seeking to relieve smallholder farmers of their most urgent problems. Additionally, successful social entrepreneurs are carving out their own career pathways, and as a result they are developing employment for themselves and for those around them.
When we discuss the power of agriculture, we are not only recognizing the sector’s ability to feed society, but also its power to generate jobs. While listening to the same panel discussion attended by Dr. Banda on the agricultural transformation in sub-Saharan Africa, Fetien Abay Abera, a professor of Plant Breeding and Seed at Mekelle University in Ethiopia, encouraged graduating students to create their own jobs, as opposed to waiting for job openings. The International Labour Organization (ILO) reports that much of Africa’s youth experiences under-employment. For this reason, young Africans have not yet reached their full potential in the workforce. More specifically, the ILO estimates that young people account for 23.5 percent of the 38.1 percent working poor in sub-Saharan Africa. The need to increase youth employment is further heightened by the fact that over 60 percent of the continent’s 1.2 billion population is under the age of 25. With such a large talent pool to draw from, social entrepreneurship can thus help offer job opportunities.
Within the broader discourse of agricultural transformation, experts in the field of agricultural policy believe that young Africans are more likely to become enthusiastic about agriculture if they view it as a business. Generally, there is a growing stigma among the youth that agriculture is the work of the poor and of the uneducated. To combat such perceptions, Ben Leyka, the Chief Executive Officer of the African Agri Council, suggests that young people must see the business aspect of agriculture, in addition to understanding that there’s an entire value chain where they can contribute and make wealth.
By thinking about the value chain as a whole, young Africans can realize that they are not constrained to merely cultivating the land. Although much is achieved from on-farm activities, it takes more than farming in order to add value to agricultural products. Young people can alternatively take their place in finance, sharing knowledge and information on markets and prices, engage in post-harvest local processing, and/or control the provision of technologies needed for production among other roles. Consequently, the ability to partake in different parts of the value chain will diversify young Africans’ perception of agriculture.
Social Entrepreneurs in Action
Two young Kenyans, Rita Kimani and Peris Bosire, are working to debunk the misconceptions about agriculture. After meeting in a computer science program at the University of Nairobi, they co-founded a social start-up, FarmDrive. FarmDrive reaches out to hundreds of farmers to connect them with financial institutions for the funding of their agricultural inputs. Bearing in mind that “over 90% of sub-Saharan Africa’s 48 million smallholder farmers lack the access to formal credit,” FarmDrive serves as an extraordinary step towards financing the agricultural input of African farmers. The platform aggregates information from farmers via SMS on their expense and revenue data. It also uses other forms of technology such as satellite imaging to provide insight on soil analysis and weather forecasts. This data then allows credit providers to make more informed lending decisions. Additionally, the founders are using an intersectional approach in their venture by giving special attention to young and female farmers.
The work of Kimani and Bosire exemplifies that Africa’s youth can use a range of tools, including business and technology, in order to sustain the agricultural value chain. Moreover, when featured in an interview for the Mastercard Foundation’s Young Africa Works 2017 Summit, Kimani encouraged young people to reflect upon the value that they can add to their agricultural produce. Her advice is important to keep in mind because Africa’s youth will be entrusted to bolster the agricultural value chain in its entirety. This means that innovation on and outside of the field are both important components in transforming the agricultural landscape.
Hello Tractor, founded by innovator and social entrepreneur Jehiel Oliver, is another excellent example of the social ventures that operate within sub-Saharan Africa. Hello Tractor is an ag-tech social enterprise that allows farmers to request tractor services through its user-friendly mobile app. Instead of smallholder farmers saving money to invest in a tractor that they may only use a few times out of the year, Hello Tractor sends tractor owners to assist farmers in need of the equipment’s temporary use, like “Uber for the Farm.” The agtech company has also extended its services by introducing its innovative pay as you go (PAYG) tractor financing model for tractor ownership.
This model supports youth and women contractors with flexible financing to buy equipment, while also encouraging investment from banks and other financial institutions who previously struggled with investing in agriculture due to a lack of transparency and data to make informed decisions. This tractor financing product will not only increase food production, but will also provide investors with the flexibility to quickly deploy capital, manage risk, and scale their investment based on its success. Equally important is the fact that Hello Tractor is helping change the perception of agriculture from a stereotypical labor-intense job to a more manageable workload.
Altogether, if we aspire to inspire the youth, we must supply them with the necessary equipment and demonstrate that agriculture does not necessarily entail back-breaking labor. Hello Tractor and FarmDrive are illustrating the importance of social entrepreneurship. Moreover, by incorporating digitization, their services become increasingly accessible to different groups of people. Nonetheless, we must remember that although 250 million Africans gained connectivity through their smartphones as of 2017, they spend at least seven percent of their monthly income on data, despite the UN Broadband Commission advocating for a two percent goal in developing countries.
Though it is exciting to think about what social entrepreneurship can do, the constraints of mobile data remind us that social entrepreneurship does not operate in a vacuum. Social enterprises interact with an entire ecosystem, from government regulations to the actual infrastructure that is at their disposal. Government support is therefore crucial in building an environment where these social initiatives can truly thrive to their full capacity. Whether it is through funding, reinforcing intellectual property laws, and/or establishing the proper infrastructure for the public, governments have an important part to play.
Beyond a Buzzword
Being a social entrepreneur is not a mere buzzword, and implementing social entrepreneurship requires the adoption of certain strategies. Social entrepreneurs must provide solutions that specifically cater to the communities they seek to work with. After all, the agricultural challenges that each community faces vary. Social entrepreneurs should take this diversity into consideration as they offer a value proposition. For example, sub-Saharan Africa has a competitive advantage of specific types of crops across different regions: cash crops like cashews, coffee, and tea in East Africa, and cocoa in West Africa.
Although coffee can also be grown in West Africa, the most globally consumed type of coffee, Arabica, is found in countries like Ethiopia. For this reason, the level of productivity of each crop depends on the location. The international consulting firm, McKinsey & Company, analyzed the productivity of 44 countries in sub-Saharan Africa. Nine countries alone make up 60 percent of the total potential. Under these circumstances, social entrepreneurs are responsible for creating a differentiated approach for each given market.
To further understand how region-specific elements can influence social entrepreneurial projects, we can analyze the International Institute for Sustainable Development’s (IISD) report. The IISD illustrated that agricultural policies should consider a country’s birth rate and the land’s fertility before enacting an agricultural plan. If this is true in terms of policy planning, we should take these dynamics into account within business frameworks as well.
The IISD identifies five transformation contexts for agriculture: (1) low birth rates and scarce land; (2) high birth rates and scarce but fertile land; (3) high birth rates and scarce land; (4) abundant and fertile land; and (5) abundant but infertile land.
These regional factors should shape a social entrepreneur’s proposed product and/or service. For instance, countries with high birth rates and scarce but fertile land (e.g., Malawi, Togo, and Uganda) will actually require more growth in non-agricultural sectors. At the very least, a social entrepreneur should understand the extent to which they will scale their agribusiness. Evidently, the agricultural market size alone varies from country to country. In layman’s term, Africa is not a monolith. Entrepreneurs must then ask themselves, is there a need for my product or service, and to what degree?
An Interview with Jehiel Oliver
In order to best understand the challenges that entrepreneurs are likely to face in Africa, I spoke with Jehiel Oliver, who oversees the general management of Hello Tractor.
When asked what the hardest thing a social entrepreneur faces in Africa, Jehiel shared that: “There’s not much of an ecosystem. You typically have the private sector, these are companies that you can partner with. And then you have academia, which allows you to leverage research. There’s the financial sector, which could provide capital and introduce angel investors. It forces you to move a little slower and be more intentional.”
I was curious to learn more about the approaches that social entrepreneurs can undertake to combat these challenges, to which he answered: “The most important thing is perseverance and patience. Don’t have unrealistic expectations as to what can be done in a given period of time. There are also a lot more assumptions that you have to make in Africa. When Uber started for instance, they didn’t start with the assumption that individuals would have smart phones or internet penetration. The one main assumption that Uber had to make was that individuals would be open to ride sharing. However, in Africa one might have to make an assumption and reflect on factors like the elections are coming up, and that hopefully this does not lead to a civil war.”
We also delved into the hurdles that he typically faces as a creator in the ag-tech space. It was clear that there are enduring infrastructure challenges. But one thing remains unique about engaging in agribusiness across Africa: “Agriculture is a very personal business. The relationship capital is something that’s necessary before doing business. Thinking about how to establish relationships in different communities and using that trust in order to foster a space where business can actually be conducted” is a crucial piece to developing your agribusiness.
Another way to overcome certain challenges, Jehiel noted, is by giving capital to social entrepreneurs, adding: “You can ‘buy’ yourself out of those problems.” In this context, he stressed that organizations like the UN can be of tremendous help by providing capital. He further explained that gaining a source of support from the UN could be complementary to a business given the organization’s massive resources. An exemplary UN initiative is the Farm to Market Alliance (FtMA), under the World Food Programme. FtMA specifically focuses on smallholder farmers by getting their produce into the market, while addressing challenges through “PATH”: (p)redictable markets, (a)ffordable finance, (t)echnologies and quality inputs, and (h)andling and storage solutions.
Finally, I wanted to gain his perspective as to how we can encourage Africa’s youth to work in agriculture: “There has to be an opportunity. You want them to get involved in agriculture because it’s the next best thing. Poor people don’t need to do a favor for development. You have to make agriculture attractive.”
By and large, a multi-faceted issue such as agricultural transformation requires a multi-faceted approach. Social entrepreneurship allows us to tackle a range of problems in creative ways. Nevertheless, social entrepreneurs require government support to help develop certain aspects of their ecosystem. Social entrepreneurs also have the chance to present solutions that are specifically made for their community members. Despite their tremendous potential to drive change, they must do so by thinking critically of their local context, and anticipating future challenges or assumptions to better shape their products and/or services. In sum, it is not the buzzword of ‘social entrepreneurship’ that drives positive change, but rather how we apply it.