Agriarche Calls for Priority Funding for African Agric Startups

Agriarche Limited has called for priority funding for African Agric startups to bolster investment in the agriculture sector in enhancing Africa Gross Domestic Product (GDP).

The co-founder of Agriarche, Deina Mayaki stated this while highlighting the glaring insufficiency of funding directed towards the agriculture sector, despite its role in employing over 60 per cent of the continent’s population.

She noted that, in the first quarter of 2024, a mere $50 million (11 per cent) was attracted to agriculture, in stark contrast to the $151 million (32 per cent) directed towards Transport/Logistics and $105 million (23 per cent) towards FINTECH.

She lamented the lack of prioritisation for agricultural funding, citing a PWC report that showed less than 3.8 per cent of commercial bank funding went into agriculture. Despite agriculture’s immense potential, access to finance remained a major hurdle, particularly for smallholder farmers.

“Agriculture claims to have about 60 to 70 per cent of the African population employed by it. If we are serious about feeding the nation and being self-sufficient in food, then we should invest in agriculture,” she added.

Mayaki emphasised the imperative of channelling adequate funding into agriculture, pinpointing the issue not as a lack of capital but rather the structural and delivery mechanisms in place.

“Agriculture should attract the necessary funding. We need to prioritize the funding that is coming into agriculture. The government can quote the 2015 subsidy programme and the 2020-2023 Anchor Borrow Programme that was done, but the capital itself is not the problem; it is the way it is structured and delivered,” she said.

She lamented the sector’s informality and fragmentation, leading to a dearth of feasibility throughout the ecosystem. Mayaki stressed that agriculture encompasses not just farming but also production, distribution, logistics, and last-mile delivery, with technology playing a pivotal role in enhancing visibility and addressing these challenges.

Among the obstacles hindering funding access to the sector, Mayaki cited insecurity in rural areas, the prevailing structure of agriculture in Africa, and the absence of a credit system for farmers. She underscored the significance of financial inclusion, noting that, it extends beyond mere access to credit but encompasses digital and financial connectivity to global opportunities.

Mayaki argued that the lack of financial inclusion perpetuates a vicious cycle wherein financial inflow into the sector is stifled, ultimately impacting millions of farmers.

She also bemoaned the decline in startup funding, attributing it to a myriad of macroeconomic challenges, including currency devaluation and higher interest rates.

She advocated the need for structured frameworks and the availability of talent to attract more venture capital into the continent.