Up to 3 million farmers in Kenya, Tanzania and Nigeria are poised to join digital economy in the next five years via Mastercard Community Pass which gives farmers a digital credential to access a network of digital agricultural agents.
This being the first phase of a $300 million commitment by the African Development Bank Group (AfDB) to a new initiative dubbed Mobilizing Access to the Digital Economy (MADE) Alliance Africa co-chaired by the bank and Mastercard and which aims to provide digital access to critical services for 100 million people and businesses in Africa over the next 10 years.
Alliance members include Equity Bank Group, Microsoft, Heifer International, Sustainable Agriculture Foundation, Unconnected.org, Yara, Kenya National Farmers’ Federation, Shell Foundation, and CRDB Bank. The Alliance also utilizes financial support from the U.S. Agency for International Development.
African agriculture sector holds much potential
According to Dr. Beth Dunford, Vice President for Agriculture, Human and Social Development at AfDB, Africa is home to 65% of the planet’s remaining uncultivated, arable land, and agriculture is a critical sector to drive Africa’s development.
She says the sector accounts for nearly 60% of total employment in Africa and accounts for more than 25% of GDP in its low-income countries. Across the continent, there’s no agriculture without women. They provide an estimated 60% to 80% of labour input to the sector.
It therefore follows that growth in agriculture is terribly effective compared to many other sectors in lifting people out of poverty, providing degrees of agency to women, feeding Africa’s people, and positioning the continent as a breadbasket to the world.
“Our challenge is that the majority of Africa’s food systems producers are smallholder farmers who, simply put, struggle from season to season due to a lack of access to quality inputs like seeds and fertilizer, or access to affordable financing to purchase farming necessities. Africa’s smallholder farmers have various needs that the MADE Alliance Africa can solve by boosting sustainable digital access to critical services. Through the MADE Alliance, Mastercard Community Pass works with local banks to provide digital credentials to millions of smallholder farmers and women. Digital identities are the gateway to accessing digital services and to high-quality inputs. Digitalizing agriculture and the distribution of goods will bring enormous efficiencies to the marketplace, as well as reduce waste and fraud across the ecosystem.”
Market transparency
In addressing the challenges involved in bringing more transparency to pricing and helping farmers access agricultural inputs, Dunford says Community Pass is designed to operate in remote and rural communities — often with limited connectivity and energy access.
“This technology, to adapt a popular phrase, “meets farmers where they are.” However, there are challenges involved in delivering these solutions and connecting smallholder farmers and women to financial institutions — challenges that we believe can be overcome or mitigated through capacity building, infrastructure and new models for governments and the private sector to work together.”
To scale these technologies to more farmers in a timely manner, the vice president says there is need to work with farmer cooperatives and networks of member farmers who reap many benefits of doing business as a unit.
“The challenge is that the majority of farmer cooperatives in Africa are not as operationally efficient as they are in other regions, and the prevalence of digital literacy is relatively low. Africa needs significant investment to educate farmers on how they can benefit from digital technologies to access resources.”
MADE Alliance’s digital services can connect farmers to new buyers and suppliers who are physically far away, but costs to transport goods to market remain a barrier.
Critically, farmers and women need digital devices and reliable connectivity to take advantage of the digital economy, said Dunford.
