The market for trade tech in Africa is booming as innovative startups emerge from east to west. We take a look at companies and initiatives transforming the trade industry on the continent – including an app that aims to eradicate child labour from supply chains, and verification tools that identify farmers using their thumbprints. Maddy White reports.
Digital trade is the next big thing for Africa. That’s according to Wamkele Mene, secretary general of the African Continental Free Trade Area – a framework that seeks to make Africa a successful single market.
Meanwhile, the World Bank has said that now is the time for Africa to harness the digital economy as a driver of growth and innovation – the core of its Digital Economy Initiative for Africa, which aims to ensure companies, governments and people are “digitally enabled” by 2030.
As high-level initiatives focus their attention on digitisation and technology, the market for start-ups in Africa is flourishing. The number of African tech start-ups receiving financial backing increased six times faster than the global average between 2015 and 2020, according to a report by Boston Consulting Group. And for trade, tangible benefits are being realised – from unlocking finance for farmers to navigating laborious non-tariff barriers at African borders.
Cameroon: Eliminating child labour
It is clear that child labour in supply chains is unacceptable. However, the opaque nature of commodities trade and the fact that many smallholders live in remote areas can make identifying and eradicating the exploitation of children an almost impossible task.
Olam Cocoa, an arm of the commodities giant, is tackling child labour in cocoa supply chains through an app on its Olam Farmer Information System. OFIS allows staff to collect data, record GPS points for farms and social infrastructure, manage training activities and track transactions, including for financing.
Last year, in partnership with the Fair Labor Association and local cocoa farming cooperatives, the company registered its nearly 7,000 Cameroonian farmer suppliers and their households onto the app.
Olam Cocoa said it was the first time such measures had been introduced at scale in the country.
The system means that with training and a smartphone, community leaders and field officers can collect detailed social data on individual farming households, helping to identify children at risk and take fast and effective action, a spokesperson tells GTR.
When asked to quantify the solution’s success so far, they add: “Our CLMRS [child labour monitoring and remediation systems] app has been rolled out in all nine countries we source from, covering a total of 183,000 farmer households. The data we’ve collected paints a clearer picture of child labour in the supply chain and the interventions needed.
“For example, in Côte d’Ivoire, which has a reported high prevalence of child labour, we found that 79% of school-aged children attend school and 75% of children identified in a situation of child labour combine school and work. In 97% of child labour cases, children were working for a parent or a relative.”
Kenya: Thumbprints for farmers
Tracking commodities throughout complex value chains that involve multiple stakeholders and transactions is a long-running issue across Africa and the wider world. An array of solutions are emerging that attempt to improve transparency and traceability.
One company offering several solutions to verify and trace commodity supply chains is Kenya-based Capture Solutions.
Provided under the two umbrellas “VeriCapture”, for verification tools, and “AgriCapture”, to weigh, log and track commodity value chains, the company states it exists “to ensure ethical standards are upheld, and the transparency and accuracy of produce is traceable, from source to shelf”.
Its VeriCapture solutions verify the identity of people and goods through biometric tools such as thumbprints, as well as GPS, mobile and cloud technology. AgriCapture allows traders to accurately weigh and digitally log goods through the value chain, eradicating tampering and shrinkage by leveraging biometric technology to enable transparency and traceability.
The solutions have been used by 150,000 farmers across Africa, with the company supporting total payments of US$56mn and completing 20 million transactions since it was founded in 2014.
Such technologies, coined “nature tech”, are advancing rapidly. Tedd George, chief narrative office at Kleos Advisory, an advisory service for African markets, tells GTR: “It’s incredible what you can do for agriculture with nature tech.
“There is a lot of tech out there which is enabling commodities to be tracked back to the farmer. With detailed information on farmers’ production, analysts can say, ‘this farmer tends to need financing at this time of the year’. After a few years of this, a very efficient system will emerge.”
Zimbabwe: Proving the health of cattle
In June, social enterprise E-Livestock Global and payments company Mastercard launched a solution powered by the latter’s blockchain-based Provenance platform to prove the health of cattle for farmers in Zimbabwe.
Outbreaks of diseases across the country have led to the deaths of tens of thousands of cattle over the years. With no way to track and prove the health of livestock, farmers have struggled to export beef and prove its quality to lucrative international markets.
“Our traceability system allows farmers to both protect their reputations and product quality standards while providing end-to-end product journey visibility. This is all beyond our primary focus of improving cattle health for the smallholder farmer,” Chris Light, CEO and founder of E-Livestock Global, tells GTR.
Farmers and dipping officers tag each cattle with a unique radio frequency identification (RFID) tag and register it onto the solution. Each time the animal gets dipped – when livestock goes through a liquid pesticide wash to get rid of parasites – or vaccinated, or receives medical treatment, the tag records the event.
The solution provides an irrefutable record that proves ownership, supports sales and exports, and allows farmers to obtain loans using their cattle as collateral. Buyers can efficiently manage their operations and guarantee product quality to their customers.
The system is being rolled out in several other countries in Africa, with plans for more markets worldwide. Smart contracts and related functionality for global transactions as well as insurance will also be introduced, GTR understands.
South Africa: Sharing vaccine tech
Earlier this year, the World Trade Organization, the International Finance Corporation and the World Health Organization (WHO) called for the manufacturing of Covid-19 vaccines across Africa to increase supply on the continent.
As this publication goes to press, just 1.56% of people across the whole of Africa are fully vaccinated against coronavirus, according to the Africa Centres for Disease Control and Prevention (Africa CDC). That compares with 60% in Europe and half of the US being fully vaccinated.
A consortium in South Africa is working with the WHO to establish an mRNA vaccine technology transfer hub to scale up production and access to vaccines in Africa. The group includes universities, the Africa CDC and pharmaceutical manufacturers Biovac and Afrigen Biologics and Vaccines.
Technology transfer hubs are training facilities where technology is established at industrial scale, states the WHO.
“Interested manufacturers from low and middle-income countries can receive training and any necessary licences to the technology,” it says.
Tedros Adhanom Ghebreyesus, WHO director-general, says: “Covid-19 has highlighted the importance of local production to address health emergencies, strengthen regional health security and expand sustainable access to health products.”
Covid-19 vaccine technology and intellectual property has emerged as a battleground this year. While the US administration has voiced support for a waiver on vaccine rights, EU leaders and manufacturers of doses such as Pfizer have largely opposed the measure, saying that it will have little impact on supply.
Ghana: Navigating lofty logistics
Shifting goods across borders and through ports between Africa’s 55 countries can prove arduous, with non-tariff barriers acting as a deterrent to trade.
Technologies to alleviate constraints to trading within the continent and to global markets will be welcomed by businesses looking to smooth out their logistics.
Jetstream, based in Ghana, aims to enable people doing business on the continent to have better insight into – and control over – their cross-border supply chains.
The company is powered by a network of freight carriers, customs agents and ground transporters that combine technology and expertise to move shipments within the African continent as well as to global markets.
Jetstream’s platform enables cargo owners and logistics providers to leverage data-driven insights on trade routes. The team is also developing a finance product to support smaller companies in moving larger cargoes.
“We are building a digital supply chain management platform for the logistics providers and cargo owners who are central to African cross-border trade. Our platform will enable them to quickly secure financing and services, process shipment workflows and access information on routes and trading partners,” a spokesperson tells GTR.
The company closed a US$3mn seed round at the end of June. Seven investors, including local and international firms, were involved in the funding.
Tanzania: Crowdfunding-style financing
In Africa, there are an estimated 48 million smallholder farmers. According to AU initiative Grow Africa, only 20% of the US$33bn needed for smallholder borrowing in Sub-Saharan Africa is met today from any source.
A lack of finance hampers companies’ ability to trade, holding back business flows and economic growth. But there are investors hungry to reach Africa’s agriculture market.
Phema Agri is a Tanzania-based company that provides digital and physical infrastructure for the agriculture value chain by linking smallholder farmers to markets, input providers, insurance products and investors.
It focuses on the rice, poultry and pork supply chains, and has plans to widen its scope.
The company has a crowdfunding-style platform for investors to allocate money to businesses that are struggling to access finance from traditional sources.
“We are committed to helping smallholder farmers access finance by structuring various financial instruments to facilitate their working capital needs. Our farmers get access to capital through inputs using our financing product,” the company says.
Its Phema-Insurance solution helps smallholders de-risk their farming operations with access to all-weather agriculture insurance products, which it offers via partnerships with insurers.
While Phema Agri is in its early stages, Daniella Kwayu, the company’s co-founder and CEO, won a US$50,000 grant last year from the second annual GoGettaz Agripreneur Prize competition run by Generation Africa, an initiative for young entrepreneurs.