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Africa has an economic sector worth $1 trillion a year, but the people who work there are largely invisible.
“Farmers are the invisible people,” says Akinwumi A. Adesina, President of the African Development Bank Group. “Banks don’t see them. Buyers don’t see them. Traders don’t see them. Insurance companies don’t see them.”
These smallholder farmers often live in remote areas with little connectivity, have no digital footprint, and have limited access to better prices, financing, and innovative agricultural inputs such as climate-resistant seeds. Masu.
But a new initiative called the MADE Alliance, which stands for Mobilizing Access to the Digital Economy, aims to bring 3 million farmers in Kenya, Tanzania and Nigeria into the digital economy. This is the first phase of an ambitious plan launched by the African Development Bank Group and Mastercard earlier this year to enable digital access for 100 million people and businesses across Africa over 10 years. be.
Farmers will be provided with a digital ID and access to a network of 6,000 digital farming agents through Mastercard’s Community Pass infrastructure. This provides access to the digital economy through digital credentials that allow farmers to access all services on the platform.
Adesina, African Development Bank Vice President for Agriculture, Human and Social Development Beth Dunford, Community Path founder Tara Nathan and other partners attended a reception on the sidelines of the United Nations General Assembly last week. shared their insights. We hosted the first MADE Alliance Steering Committee meeting to review progress and discuss outstanding challenges and support needed to scale MADE programming.
Beth Dunford of the African Development Bank
Programs rolled out by MADE include unlocking affordable digital financial services for sunflower farmers in Tanzania, internet connectivity and digital skills for agricultural cooperatives in Kenya, clean energy asset financing for Kenyan farmers, and community passes. This includes access to markets through.
Mastercard Newsroom spoke with Dunford about the challenges facing small-scale farmers, the opportunities digitalization offers, and why investing in women farmers in particular is, in her words, “smart economics.” I talked about whether there is.
Why did MADE Alliance Africa choose to focus its initial efforts on digitalization of agriculture for smallholder farmers and women? And why does it believe there is so much potential in Africa’s agricultural sector? Do you think?
Mr. Dunford: Africa has 65% of the remaining uncultivated arable land on the planet and we believe agriculture is a key sector driving Africa’s development. Agriculture accounts for nearly 60% of total employment in Africa and more than 25% of GDP in low-income countries. Across the continent, agriculture cannot exist without women. They provide an estimated 60% to 80% of the labor input to the sector. Agricultural growth has a huge role to play compared to many other sectors in lifting people out of poverty, giving women some agency, feeding Africa’s people, and positioning the continent as the world’s breadbasket. It is effective for
Beth Dunford (left) is part of the African Development Bank Group’s Affirmative Financing Action for Women in Africa (AFAWA), which aims to reduce the $42 billion financing gap for women in Africa. I visited a coffee roaster in July. (Photo provided by African Development Bank Group)
Our challenge is that the majority of food system producers in Africa are smallholder farmers, and simply put, they lack access to quality inputs such as seeds and fertilizers and affordability to purchase agricultural necessities. It is a seasonal struggle due to lack of access to financial resources. Africa’s smallholder farmers have a variety of needs that MADE Alliance Africa can help address by facilitating sustainable digital access to critical services. Working with local banks, MADE Alliance aims to first provide digital IDs to millions of smallholder farmers and women. Digital ID is your gateway to access digital services and high-quality input.
Consider, for example, that an estimated 99% or more of agricultural transactions in Africa are cash-based. 99%! Digitizing agriculture and product distribution will bring significant efficiencies to markets and reduce waste and fraud across the ecosystem.
Tara Nathan, founder of Mastercard Community Pass, spoke with partners and other development leaders at a MADE Alliance reception during the United Nations General Assembly. (Photo by Awa Dia) Akinwumi Adesina at the MADE Alliance event at Mastercard’s New York City Tech Hub. (Photo provided by Awa Deer)
Mastercard’s Community Pass establishes a digital identity for millions of farmers, increasing pricing transparency and helping them access agricultural inputs. What are the challenges involved in bringing this solution to market and how can they be overcome?
Dunford: Community Pass is designed to operate in remote and rural communities, where connectivity and energy access are often limited. This technology will, in the popular phrase, “meet farmers where they are.” But bringing these solutions to the “last mile” and connecting smallholder farmers and women with financial institutions presents challenges. We believe these challenges can be overcome or mitigated, including the need for capacity building, infrastructure, and new models for government and governance. Private sector cooperation.
To scale these technologies to more farmers in a timely manner, we need to work with agricultural cooperatives, networks of member farmers who enjoy many benefits from doing business as a unit. The challenge is that the majority of agricultural cooperatives in Africa do not operate as efficiently as in other regions, and digital literacy rates are 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 the cost of transporting products to market remains a barrier. To take advantage of the digital economy, it is critical that farmers and women need digital devices and reliable connectivity.
Finally, local governments recognize the benefits of digitalization in agriculture, but could benefit from access to clear models for developing robust digital ecosystems in partnership with the private sector. . The trend toward centralizing agricultural digital infrastructure is inhibiting private sector participation and making it difficult for companies to develop sustainable models for serving farming communities.
Beth Dunford at the MADE Alliance event. (Photo provided by Awa Deer)
Can you tell us a little more about how MADE Alliance benefits women?
Dunford: About half of Africa’s smallholder farmers are women, and they make up the majority of the workforce in the agricultural sector. However, women farmers struggle to make a sustainable living from farming because they are less likely than male farmers to own real estate ownership and other assets needed to access financial services. . Women farmers have less access to information and extension services, and lack access to inputs such as seeds and fertilizers. They are disproportionately affected by climate risks. Taken together, these challenges mean that female farmers typically produce up to 20% to 30% less than their male counterparts.
The Community Pass initiative helps women make agriculture a sustainable livelihood by enabling access and increasing transparency to critical service providers such as banks and produce buyers.
Women are the backbone of Africa’s economy, and investing in women entrepreneurs fosters women’s empowerment and ownership of decisions about their businesses, families, and communities. Investing in African women entrepreneurs is smart economics. Investing in women in Africa is a cornerstone of the Bank’s work. In fact, no World Bank project or program will receive World Bank financing without a detailed explanation of how it will benefit women.
Akinwumi Adesina (left) and Beth Dunford. At a UN Women event last week, Adesina was celebrated as a HeForShe Champion for her work in advancing gender within the African Development Bank Group and across the continent. This year, the bank celebrates 25 years of mainstreaming gender into its operations. (Photo provided by African Development Bank Group)
Beyond community passes, what role can the private sector play in strengthening Africa’s food supply chains, especially the resilience of smallholder farmers? What can governments do?
Dunford: MADE Alliance includes Equity Bank Group, Microsoft, Heifer Foundation, Unconnected.org, and will soon have four to five more global and local partners signing on to membership. More welcome. The MADE Alliance offers a new approach to partnership. It is private sector-led and commercially sustainable by design. Our partnerships are established in line with the national policies of the Bank’s regional member countries.
Importantly, the MADE Alliance argues that sustainability means profit for the private sector. The alliance-facilitated partnerships between donors and governments are critical to providing catalytic funding and regulatory support that de-risks private sector entry into agricultural markets and areas where profit margins are extremely thin. All MADE Alliance programs are supported by private sector entities, and other partners flock to the same communities to provide complementary services and funding to make the programs a reality.
Originally published by Mastercard
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