E-commerce and the Future of Food Security in Africa

 

My effort to address work-life challenges of working professionals by creating an e-commerce platform for their shopping needs revealed the need to view Easyshop Easycook as not just a tech platform but a crucial player in the agriculture value chain. The challenge of delivering fresh produce to the customer successfully highlights the necessity of partnerships with farmers across Nigeria and the need for better infrastructure.

It is evident that e-commerce companies like Easyshop Easycook play a crucial role in expanding market reach for farmers, allowing them to connect with customers globally, broadening their customer base, and boosting their income. This is particularly significant for small-scale farmers who face limited access to local markets and resources for traditional sales channels. Our partnership with the World Bank and the Ministry of Agriculture in Lagos on the APPEALS project, Oxfam and other partnerships we have continues to support this stance.

E-commerce not only expands market access but also decreases transaction costs and minimizes adulteration. By cutting down on middlemen in the value chain, e-commerce platforms decrease business expenses for farmers and increases their profits restoring trust in the system. This is especially relevant in Africa where high transaction costs and contaminated goods pose significant trade barriers and hinder farmers from reaching markets and receiving fair prices for their products.

Food security is a critical issue in Africa, where millions of people lack access to adequate nutrition and suffer from hunger and malnutrition. The agricultural sector is a crucial part of the solution, providing food and livelihoods for millions of people across the continent. 

The agricultural sector is a vital part of the African economy, employing more than 60% of the population and contributing to over 30% of the continent's Gross Domestic Product (GDP). Despite its significance, the sector faces numerous challenges, such as limited access to markets, low productivity, and limited access to finance. In recent years, e-commerce has emerged as a potential solution to these challenges, offering farmers in Africa new opportunities to increase their income and connect with customers.

According to the African Development Bank (AfDB), e-commerce has the potential to transform the agricultural sector in Africa by improving market access and reducing transaction costs. In a recent report, the AfDB found that e-commerce could increase agricultural productivity by up to 25% and reduce transaction costs by up to 60%. These benefits are particularly significant for small-scale farmers, who often struggle to access markets and finance.

Despite these advantages, e-commerce adoption in the African agricultural sector remains low. According to the AfDB, only 5% of African farmers are currently using e-commerce platforms to sell their products. This is due to a number of barriers, including a lack of infrastructure, limited access to technology, and a lack of awareness of e-commerce opportunities.

To overcome these barriers and increase e-commerce adoption in the African agricultural sector, there are several key infrastructure components that need to be in place at the farm end. These include:

Reliable electricity and Storage- Farms need to have access to reliable and affordable electricity in order to power the technology needed for the sourcing process. This includes refrigeration and storage systems to keep produce fresh, as well as computers, printers, and other technology to manage orders and shipments.  

Internet connectivity - A dependable internet connection is vital for maintaining communication with farms, executing orders, and overseeing supply chain logistics. This internet connectivity also gives farmers access to market data and information, enabling them to make informed decisions on crop selection and sales timing. Many farmers today cultivate crops based on readily available seeds from government agencies rather than market demand.

Transportation - A robust transportation infrastructure is crucial for transporting produce from farms to e-commerce companies. This can encompass a combination of road, rail, and air transportation, and may also entail the establishment of logistics centres and cold storage facilities to preserve produce freshness during transit. While it is encouraging to see investments in cargo airports and rail in Nigeria, further action is required to ensure that farm roads are suitable for and accessible by logistics companies.

Packaging and labelling - Proper packaging and labelling of produce is vital for food safety and maintaining quality standards, which is imperative for e-commerce companies. Standardized packaging and labelling systems that conform to international food safety norms must be adopted. Currently, there are several states using various local measuring methods such as bowls, baskets, tubs and cups, which cannot be accepted as standard units of measurement in e-commerce platforms.

Traceability and transparency - Maintaining a clear and comprehensive record of the journey of agricultural produce from the farm to the customer is essential for ensuring the transparency and traceability demanded by e-commerce companies. In order for these companies to meet international food safety standards, farmers must have accurate documentation covering each step of their farming process; which needs to be enforced by relevant agencies.

The issues in this sector present clear investment prospects for the private sector, but not all challenges can be addressed through monetary means. That is why we have more investment in FinTech than in E-commerce or AgTech. It's important to acknowledge the limitations of market-based solutions and collaborate to resolve the complex issues that cannot solely be solved through financial means. This necessitates a comprehensive approach that brings together government, communities, and individuals to work towards a shared objective. This also encompasses reducing obstacles for e-commerce startups, enhancing intellectual property protection, and expanding financing options for farmers and other industry players.

The growth of e-commerce has greatly influenced the agriculture industry in developed nations, leading to more efficient processes, lower expenses, and higher revenues for those involved in the sector. African countries can benefit from these examples by investing in necessary infrastructure, enhancing the business environment, and highlighting the advantages of e-commerce, which can result in increased food security and economic expansion.