One of the qualities that is so alluring about the African continent is the amount of arable land on a cross-continental level. How much arable land is on the African continent? 60-65% of the world’s total arable land is here. This is a good thing, especially as the world’s population is reaching 8 Billion and might one day surpass 12 Billion . As a result of the increase of population land area will become more expensive overall. This means food will become more expensive and in constant high demand.
This is a golden opportunity for Africa and Africans. Even though this is true, there are critical problems that need to be recognized and addressed as they are currently impeding farmers from being as successful as they can be. This is not ideal. The most prevalent problems impeding total agricultural evolution and food scalability on the continent are:
- Lack of industrialized farm processes for small scale farmers
- Lack of financial aid and storage
- Monopolization of market by trans-national corporations
-Lack of industrialized farm processes for small scale farmers:
The average African farmer, on a transcontinental level, are subsistence farmers. This means that most farmers on the continent farm for their dietary needs and sell the excess. The problem with this is sometimes farmers are in short supply of produce to sell. One of the main causes for this is that they use their hands for all their processes and little to no methods through tech or machinery.
example: African farmer with nuts de-shells the nuts by hand in a manual fashion to get the nuts to sell. This usage of the hands from the growing to the distribution limit the amount of produce one can sell because it is too slow. If they had industralised machinery they could add more produce to be grown more produce to be processed by deshelling/cleaning/sorting and even more produce to be distributed more efficiently.
Alternatively a European farmer has a warehouse where he processes all produce through an automated Warehouse Management System (WMS). Through the WMS they keep track of all processes from cleaning produce, processing it to sorting it then finally readying it for exporting. A lot of modern farming includes mass automation through robotics. Some do all this and even further maximize their output by adopting vertical farming to further increase their yield. Some of the more technologically progressive farmers have greenhouses where through the green house management system they can influence an AI that regulates different areas of the greenhouse for specific crops and controls the sprinkler systems and all food influencing processes for further crop output. This is a far cry from the current day average African farmer.
-Lack of financial burseries/loans to small scale farmers:
Small-scale subsistence farmers can hardly ever afford new equipment, more land to progress their farming output or expand their produce diversity. They also do not have access to banking systems (ATMs/ banking outposts). To add to this most would not put the money they earn in the bank out of distrust for national systems. small scale farmers need an alternative to African banks and their loans. In Malawi bank interest rate is 14%, in Zimbabwe they have an interest rate of 200% and in the countries of Ethiopia, Kenya and most other African countries the interest rate is 7-10%. As you might guess, interests rates this high are hardly industry conducive. So most farmers stick with the old, dated and overly used equipment and land they are accustomed to. If a technology solution presents itself as an alternative to banking they refuse to adopt it. It does not even matter if the tech solution is rooted in banking, that is just the most common one.
There are other money management solutions in tech besides traditional banking such as decentralization/Web3 and mobile banking. They also refuse to use these because of financial constraints and technology mistrust.
As of march 2022, 57 per cent of Africans don’t hold any type bank account including mobile money accounts says africanbusinesscommunities.com .Considering the fact that most Africans are in the agricultural industry and agriculture gives the African continent at least 40% of its GDP this is a huge amount of people. Albeit this by-and-large is changing.
We see the change in areas like mobile banking. It has grown over the recent years due to the web3 rise in Africa and fintech acceleration across the continent, has spurred a change in farmers and average citizens to dare to adopt these new solutions to money spending and money storage issues. Good examples of this are Kenya and Zimbabwe. As of February 2022, 60% of Kenyans prefer doing transactions through mobile money says africanbussinessdaily.com. In Zimbabwe 15.3 million people now use mobile money systems says finmark.org.za. Although change is seemingly coming it is not happening fast enough.
-Monopolisation of markets by trans-national corporations:
As of august 2022, 20% of the African continents people, 278 million people to be exact, are currently suffering from chronic hunger reports weforum.org. This shows a great need for food security for the people. Countries from the western world such as, France, USA, Belgium, UK, Netherlands, Ukraine etc have trans-national corporations which are seizing this opportunity. Even corporations from Asian countries such as India and China are making their mark here. Most African small-scale farmers or small-scale farming companies do not have the necessary funds to compete with their global competitors in their own countries. Let’s not even think of competing cross-continentally or even internationally. For most that is certainly improbable at the moment.
As of September 2021 the United Nations Conference on Trade and Development (UNCTD) said that Africa imported 85% of its food, from 2016-2018, from outside the continent amounting to $35 billion and is expected to reach $110 billion by 2025 and as of 2022 has reached $85Bn. Agricultural processes need a catalyst to spur their evolution.
What is Releaf?
Releaf is an African Agricultural tech (Agritech) company based in Nigeria. They are a supply chain technology company. Their goal is to help small scale share holder farmers increase produce input into their value chain by innovating the agricultural processes. They get products to fast-moving consumer goods (FMCSG’s)companies as quick as possible to reduce prices for all. In recent years on the African continent we have seen a huge surge in startups. In fact in 2021, 604 African startups raised a total of 5.4 billion USD says the economist.com .
What is most interesting is the vast majority of these African startups are fintech or fintech and Web3 based. The reason for this is that most African countries have failing financial institutions so the rise in Fintech companies makes sense. Web3 based companies have entered due to the popularization of web3 technologies in 2020 globally. We do not see many startups receive funding outside of the financial market space or the social space or the industrial space. So the fact that Releaf is an African agritech supply chain company that recently raised another 4.2 million USD even after its initial launch in 2017 is not something to dismiss and is a testament to the company’s potential.
They have been recognized in Nigeria for starting an agricultural evolution in the country and the west and central African region as a whole. This is not a huff, puff and smoke statement at all. In 2017 Releaf won 120 thousand USD in initial funding as one of the only African and successful companies in the Y-COMBINATOR startup accelerator program. In 2021 the company and CEO Ikenna Nzewi came in second place for the “African business heroes” award. They beat more than 50 other famed and great African businesses and startups from across the continent to achieve this award. Businesses and startups ranging all the way from agritech, fintech, educational technology and even medical technology. This was because of their non-stop efforts to ease business for small scale share holder farmers across their nation and region. Their efforts were even recognised by Dr. Akinwumi A.Adesina . Dr. Adesina is the former Nigerian minister for agriculture and rural land development. He is also the current head of the African Development Bank. He praised Releaf and the CEO Ikenna Nzewi for their work in agricultural business transformation. The investment poured on them by Y-COMBINATOR and the encouragement through Dr. Adesina’s and the awards earned by them could be a very strong indicators of their future growth.
How do they make a difference?
At Releaf their main goal and mission is not just solving a problem. They are solving problems through innovative inventions. They invent and make both software and mechanical technology. African problems require African solutions after all. They make new mechanical machines and operate them for and with small shareholder farmers to reduce post harvest loss of produce in the food processing processes.
By inventing machines which help small scale farmers/small shareholder farmers more efficiently process their produce, they are literally saving huge amounts of potential post harvest loss. This is very crucial as most farmers of this type need every penny from the harvest and cannot afford to lose out due to any inadequacies or failures on any level of their work system.
To reiterate the problems listed earlier that impede a re-revolution of African agriculture are:
- Lack of industrialized farm processes for small scale farmers
- Lack of financial aid and storage
- Monopolization of market by trans-national corporations
We already delved into these problems earlier on here. Now let us concisely see how Releaf tackles each and everyone of these problems in order to solve them:
-Lack of industralised farm processes for small scale farmers:
Releaf have already started on this and are making progress on it. To be very specific the first machine they have built which has indutralised the agricultural processes for a lot of the small scale farmers is dubbed “The Kraken”. This device is west Africa’s most advanced palm nut de-shelling machine. It de-shells palm nuts as fast and efficiently as possible whilst increasing general output. This invention is specific to palm nuts because they made it for the people in African countries who export and grow the most palm nuts, i.e: Nigeria and Cameroon. The “kraken” is 85% more efficient than it’s counter parts with 25% faster than local cracking equipment and x240 times faster than de-shelling by hand.
-Lack of financial aid and storage:
Releaf actively works to counter this issue through the only real solution there is. The solution is to simply fund these small scale farmers so that they may buy the necessary equipment, seeds etc to upgrade their overall production output to contribute more to the industry value chain they are apart of, also known as Business-to-Business investment (B2B). Releaf does this. They fund farmers and unlike banks or a traditional monetary funders they tailor their funding specific to your business.
-Monopolisation of market by trans-national corporations and :
By working with small scale farmers they are actively pushing against corporations. This is because as Releaf works with the farmers and sponsors them monetarily or gives them machinery to boost operations or all of the above, the farmers will eventually be able to micro-compete with their corporate competitors.
Will Releaf be our Relief? (lol)
Releaf really might RELEAF-VE Africa of it’s food insecurity issues. Will it be instant? no. Will there be mass failures and at times stagnation’s? that is more than likely as they are an agritech and supply chain company and startups always have ups and downs. Releaf is an anomaly as they are working with mechanical innovations, lite mobile banking, acts as a small venture capital firm for agribusinesses in Africa and at the same time they also work with geo-spatial innovations for better farming evaluations. They are tackling all this at once. It is even more strange because they are actually succeeding in all these endeavors at once.
All of this adds up to their goal of revolutionizing the way small share holder farmers contribute in the value chain in Africa. It would not even be surprising to see them get into Web3 technologies and decentralization as a whole. No matter what you may think of them, if they are doing to much or in the wrong industry etc. They are successfully pioneering home grown agricultural solutions to the people of the continent and one day maybe even beyond.