Agriculture Practice

How digital tools can

help transform African
agri-food systems
Higher income for farmers, increased output, and improved food
security are among the benefits of utilizing digital tools in an
agricultural setting.

by Lutz Goedde, Ryan McCullough, Amandla Ooko-Ombaka, and Gillian Pais

© Martin Harvey/Getty Images

January 2021
 Digital technologies have the power to transform real-time data more frequently to assess the state of
agri-food systems in emerging markets by food security and agriculture within their countries,
accelerating the work of participants across the particularly during lockdowns (for example, to
value chain, including input players, producers, better target cash transfers to farmers). This has
offtakers, and retailers. Governments could assist encouraged more data sharing between the private
them by deploying digital tools for important and public sectors in service of the public good.
tasks, such as distributing subsidies to farmers or There is potential to build on this momentum that
managing the inventories of emergency food-relief could support a more systematic transformation of
stocks in government storage facilities. When used agri-food systems across the continent.
as part of a national agricultural-transformation
program, digital tools could help raise the incomes
of smallholder farmers, increase crop output, and Challenges to scale
support food security. For example, an e-wallet can In sub-Saharan Africa alone, more than 400
help increase affordability of inputs by efficiently digital agriculture solutions are in use, including
distributing subsidies to farmers. applications in financial services, market linkages,
supply-chain management, advisory and
While governments can play a significant role in information services, and business intelligence.1
helping private-sector players and development Despite their abundance, many digital solutions
partners to invest in digital projects by supporting struggle to scale and fail to improve the lives of
policy and data infrastructure, they are also farmers and other end users. For example, in sub-
developing their own digital solutions to support Saharan Africa, most applications have less than
their stated sector priorities. This article focuses on 30 percent active users. Twenty applications (about
use cases—projects with a clear beginning and end 5 percent) account for more than 80 percent of
that apply a digital or advanced analytics solution farmer registrations and have achieved scale of
to achieve a measurable benefit—that governments more than one million farmers, including the 8028
in Africa can deploy to support agricultural Farmer Hotline, a government-run advisory service
transformation, working with development partners in Ethiopia.
and the private sector.
The availability of a digital agriculture solution
We first highlight challenges African governments does not guarantee smallholder farmer uptake and
have faced in applying digital agriculture adoption. To improve participation, three elements
technologies at scale. Second, we offer a set of are necessary:
ten priority use cases for governments to consider
as they seek to speed up agri-food system — Digital solutions must create value for end users
transformation. Finally, we identify important so they have an incentive to adopt. In the case of
lessons that governments in emerging markets farmers or growers, that means improving crop
have learned as they launched and scaled digital yields, boosting profits, or reducing input costs
agriculture use cases. and crop loss.

The COVID-19 crisis has forced many governments — Farmers should receive some level of physical,
in emerging markets to accelerate the use of digital in-person support. The most effective tools
agriculture technologies to support emergency allow farmers to supplement access to
responses, making the issue especially topical— agricultural knowledge from mobile phones
and Africa is no exception. Throughout the crisis, with face-to-face interaction with extension
public-sector decision makers have sought more officers, such as those from the Kenya-based

1
Benjamin Addom et al., The digitalisation of Africa agriculture report, 2018–2019, The Technical Centre for Agricultural and Rural Cooperation,
August 2019, cta.int.

2 How digital tools can help transform African agri-food systems

 agriculture-knowledge-sharing program digital use cases with legacy manual and digital
Shamba Shape Up. systems. Also, public-sector procurement
processes are designed to carefully control public
— Governments should enable technologies spending, and while vitally important, this does not
to flourish. Governments, which often play a always enable more agile digital solutions that can
critical role in providing the core digital and evolve rapidly as user feedback emerges.
data infrastructure and regulation, may invest
in farmer registries, the base data that many Governments cannot address all these challenges at
digital solutions rely on. Farmer registration is an once. Our experience suggests that starting with a
expensive public good that few want to pay for handful of well-scoped and targeted use cases can
yet many benefit from. jump-start a broader use of digital technologies to
accelerate agricultural transformation. At a macro
Beyond low adoption, governments often face level, prioritizing a set of digital interventions allows
broader challenges to scale. These include issues governments to address some of the external
like uneven digital access and digital literacy in their barriers described above in a targeted manner, such
populations, low data accuracy and usability, and as focusing on areas where 3G access exists. At a
limited tailoring of content for local contexts. more granular level, prioritizing use cases reduces
resource requirements, such as scarce digital
Most germane for smallholder farmers is basic talent. Prioritizing use cases to test is a helpful way
access to digital technologies. Half of sub-Saharan to articulate the data architecture and underlying
Africa does not have access to electric power.2 The data platforms, sort through complex issues of data-
average cost of an entry-level second-generation sharing policies and guidelines, and ultimately start
(2G) or third-generation (3G) wireless device building the skills and capabilities to manage digital
accounts for more than 70 percent of the monthly interventions at scale.
income of a farmer in sub-Saharan Africa, compared
with 17 percent in India. Also, 3G network coverage
in rural areas—where most farmers live—is limited: The digital opportunity
about 70 percent in urban areas versus about To better understand the digital opportunity, we
40 percent in rural areas in sub-Saharan Africa.3 identified ten relevant public-sector use cases
Although non-internet-based approaches (including based on an analysis of more than 400 digital
messaging services) are more widely accessible, solutions in sub-Saharan Africa and interviews with
internet-based solutions can provide a wealth of more than 70 ag-tech and other private-sector
additional data that are critical to offering tailored players, government officials, and development
products to farmers, such as geolocation. partners. We identified gaps in the existing solutions
and potential areas for public-sector intervention
Finally, it is important to highlight the operational (Exhibit 1; see sidebar, “Methodology”). We grouped
challenges that can be experienced when delivering the resulting use cases into four categories:
digital transformations. All transformations are
hard—less than 30 percent succeed.4 Our recent — increases in farmer income
research suggests that digital transformations are
even more difficult, and many fail in execution.5 — increases in agricultural output
These transformation hurdles are not unique to
Africa, but they are particularly acute in the public — government savings and more effective
sector. They include a shortage of digital talent in management of food security and
the public sector and reconciling sophisticated agricultural transformation

2
Addom et al., The digitalisation of Africa agriculture report.
3
Calum Handforth, Closing the coverage gap: How innovation can drive rural connectivity, GSM Association, July 2019, gsma.com.
4
Hortense de la Boutetière, Alberto Montagner, and Angelika Reich, “Unlocking success in digital transformations,” October 2018, McKinsey.com.
5
de la Boutetière, Montagner, and Reich, “Unlocking success in digital transformations.”

How digital tools can help transform African agri-food systems 3

 Exhibit 1

Ten digital
digital case studies offer
case studies offerexamples
examplesofofhow
howto
toaccelerate
acceleratethe
the
transformation
transformation
of of agri-food systems.
agri-food systems.
Feasibility based on country composite High Medium Low

Impact Prioritized use cases Case examples Ease of implementation

Execution
Data Tech capacity
Increase 1 Target eligible farmers with Zambia Government provided
government e-vouchers for insured e-vouchers for inputs tar-
savings and inputs based on a farmer geting ~1 million farmers
improve registry, using digital tools
food-security and analytics to improve Eastern Government updated
management performance Europe subsidy allocation and
e-voucher targeting

2 Increase the efficiency Colombia A milk producer conduct-

of government storage ed an end-to-end supply-
facilities through capacity chain optimization to
planning and optimization reduce logistics costs
analytics and optimize storage

3 Manage national food Kenya Government developed

deficit by monitoring a digital FBS to facilitate
countrywide food produc- the tracking of the coun-
tion and consumption try’s food demand and
through a digital food supply
balance sheet (FBS)

Increase 4 Improve value chain selec- Africa Government built a

agricultural tion for optimal land use land-optimization
output with a resource optimiza- model to identify
tion model tailored to spe- high-value crops for
cific outcomes (eg, jobs) prioritization

Increase 5 Improve farmer practices Kenya Arifu has partnered

farmer (eg, input use) by providing with Syngenta to
income farmers with customized provide mobile-based
e-extension advice on an agronomic advice to
easily searchable platform farmers

6 Provide farmers with regu- Nigeria Esoko provides farm-

lar crop market prices from ers with SMS-based
geo-located markets information on market
nearby to reduce market prices
information asymmetries
7 Reduce crop losses with an DR Congo, Tumaini is an app that
early warning system for Uganda, uses artificial intelli-
pest and disease outbreaks South India gence (AI) to diagnose
and advice on actions to diseases from pictures
protect crops uploaded by farmers
8 Reduce crop losses with an Ghana Ignitia sends out
early warning system for regular weather fore-
weather fluctuations to help casts to farmers to aid
farmers adjust their planting in decision making
and harvest plans
Enablers 9 Build a digital farmer regis- Rwanda Government registered
try with regularly updated ~1.5 million farmers in
farmer profiles, including partnership with the
farm location, farm size, Bank of Kigali for
and crops grown to inform access to agricultural
all farmer-facing use cases finance

10 Create transparency and Zambia Zambia launched an

improve baseline for statis- integrated agricultural
tics by building a joint- data platform to
access national agriculture support its farmer
data platform e-subsidy scheme
4 How digital tools can help transform African agri-food systems
Source: Arifu; E-soko; Ignitia; UN Food and Agriculture Organization; McKinsey analysis
 geo-located markets information on market
nearby to reduce market prices
information asymmetries
7
Reduce crop losses with an DR Congo, Tumaini is an app that
Ten digital caseearly warning system for
studies Uganda,
offer examples uses artificial intelli-
of how to accelerate
pest and disease outbreaks South India gence (AI) to diagnose
the
transformationandofadvice
agri-food systems.
on actions to diseases from pictures
protect crops uploaded by farmers
8 Reduce crop losses with an Feasibility based
Ghana on sends
Ignitia countryout
composite High Medium Low
early warning system for regular weather fore-
Impact Prioritized
weather use cases
fluctuations to help Case examplescasts to farmers to aid Ease of implementation
farmers adjust their planting in decision making Execution
and harvest plans Data Tech capacity
Enablers
Increase 91 Build
Targetaeligible
digital farmer
farmersregis-
with Rwanda
Zambia Government registered
provided
government try with regularly
e-vouchers updated
for insured ~1.5 million farmers
e-vouchers in tar-
for inputs
savings and farmer profiles,
inputs based onincluding
a farmer partnership with farmers
geting ~1 million the
improve farm location,
registry, using farm size,
digital tools Bank of Kigali for
food-security and crops grown
analytics to inform
to improve Eastern Government
access updated
to agricultural
management all farmer-facing use cases
performance Europe subsidy allocation and
finance
e-voucher targeting
10 Create transparency and Zambia Zambia launched an
2 Increase the efficiency
improve baseline for statis- Colombia A milk producer
integrated conduct-
agricultural
of
ticsgovernment
by building storage
a joint- ed
dataanplatform
end-to-end to supply-
facilities throughagriculture
access national capacity chain
supportoptimization
its farmer to
planning and optimization
data platform reduce
e-subsidylogistics
scheme costs
analytics and optimize storage

3 Manage national food Kenya Government developed

Source: Arifu; E-soko; Ignitia; UN Food and Agriculture Organization; McKinsey analysis
deficit by monitoring a digital FBS to facilitate
countrywide food produc- the tracking of the coun-
tion and consumption try’s food demand and
through a digital food supply
balance sheet (FBS)
— enablers that do not generate direct financial and yields, trade levels, commodity prices, and
Increase 4 critical
impact but are Improvetovalue
sustainability of Africa
chain selec- Government
stocks of food in built a
a country. It draws data from
agricultural tion for optimal land use land-optimization
use cases
output with a resource optimiza- stakeholders across
model to identify the government and the
tion model tailored to spe- private sector,crops
high-value suchforas the revenue authority for
The impact of thesecific
useoutcomes (eg, jobs)
cases varies significantly. prioritization
formal trade and industry associations for informal
Nonetheless,
Increase to5illustrate
Improvethe power
farmer of digital Kenya
practices trade. A well-functioning
Arifu has partnered FBS can support national
farmer to support(eg,
solutions input use) by
agricultural providing
transformation, foodwith Syngenta
security to
by providing accurate and reliable
income farmers with customized provide mobile-based
let us consider a digital food balance
e-extension advice onsheet
an (FBS). information to support
agronomic advice to more-effective policy
easily
This tool measures the searchable platform
consumption, production farmerson trade and food reserve disbursement.
decisions
6 Provide farmers with regu- Nigeria Esoko provides farm-
lar crop market prices from ers with SMS-based
geo-located markets information on market
nearby to reduce market prices
information asymmetries

Methodology 7 Reduce crop losses with an DR Congo, Tumaini is an app that

early warning system for Uganda, uses artificial intelli-
pest and disease outbreaks South India gence (AI) to diagnose
and advice on actions to diseases from pictures
First, to validate our approach, we Second,
protect cropsan extensive scoping exerciseuploadedandby macro
farmersagri-sector intelligence. We
selected about 20 countries, six of 8 identified
Reduce ten use
crop losses cases
with an relevant
Ghana to these interviewed
Ignitia sends out more than 70 key stakeholders,
which are in Africa, that have a strong emerging markets. The selected use cases including government officials, donors, and
early warning system for regular weather fore-
weather fluctuations to help casts to farmers to aid
foundation to support digital agriculture needed to have the potential to accelerate ag-tech and other private-sector players,
farmers adjust their planting in decision making
interventions. This process used three andnational
harvestagricultural
plans transformation to better understand which of the digital
country criteria: classification as low- priorities and have a clear only-government solutions have a government-only role.
Enablers 9 Build a digital farmer regis- Rwanda Government registered
or lower-middle-income economies tryrole
withto implement
regularly or scale, even if the public
updated ~1.5 million farmers in
with an existing agricultural production farmer profiles,
sector including
will partner partnership
with donors and private- with we
Finally, the reviewed case studies where
farm location, farm size, Bank of Kigali for
base, more than 70 percent of farms andsector
cropsplayers
grown totoinform
carry them out. access tosimilar solutions had been implemented
agricultural
are smallholder driven (meaning smaller all farmer-facing use cases finance to identify impact benchmarks. For
than two hectares in size), and basic 10 Scoping
Create includedand
transparency a review of more than Zambia launched
Zambia farmer-facing
an use cases, we considered
digital infrastructure (such as mobile- improve baseline for statis-
400 private-sector integrated
digital solutions in sub- agricultural
farmer incomes; for government-facing use
tics by building a joint- data platform to
phone penetration or internet access) is Saharan Africa and covered five themes: cases we considered budget savings,
access national agriculture support its farmer
in place. advisory
data platformservices, financial services, market food
e-subsidy security improvements, and
scheme
linkages, supply-chain management, agricultural output.
Source: Arifu; E-soko; Ignitia; UN Food and Agriculture Organization; McKinsey analysis

How digital tools can help transform African agri-food systems 5

 It can also inform actions of consumers, farmers, and availability of talent—in addition to any
and producers, and aid in the deployment of food commitments already made to development
relief from development partners. partners.

The Kenyan government recently decided to For example, a North African government recently
digitize its FBS to better monitor food deficits and spent several months drafting an agricultural
reduce spending on reserves. Within 12 weeks, the sector transformation policy before launching
government had completed the steps needed to a digital strategy. Its transformation policy
define, design, and build a minimum viable product articulated priorities such as food security and
(MVP). It is now in use. At scale, this digital FBS is export-oriented growth. A digital strategy could
expected to reduce spending on food reserves by then be built from these priorities and—aligned
up to 3 percent annually while improving the ability with key government stakeholders such as the
to report agricultural data. Ministry of Information and Communications
Technology—ensure that the digital agenda was
Such a tool could be used for other purposes as centered on transformation efforts.
well. For example, it could facilitate improved
subsidy allocation by allowing governments Demonstrating quick wins
to target support initiatives using the tool’s Quick wins are important in early digital
outputs for specific local crop production levels, interventions. They can help lay a strong foundation
prices, and yield differentials. An FBS could also for subsequent scale-up efforts and provide
support investment. Sharing data publicly on momentum to address some of the competing
local agriculture market statistics (similar to US priorities articulated above.
Department of Agriculture data) would offer to
the private sector the transparency it seeks when In one East African country, the Ministry of
considering investments in areas such as storage Agriculture had been planning to build a tool to
facilities and processing and manufacturing. track production of key commodities nationwide
as part of a broader effort to digitize manual data.
A use-case selection framework can help However, the plan to build the tracker did not
governments to determine what tools are available immediately gain support, because the use case
to achieve particular outcomes (Exhibit 2). for the data was not clear. The COVID-19 pandemic
brought into acute focus the importance of a tool
that could monitor food supply across the country
Lessons learned: A digital approach to in near real time. The government conducted a
accelerate agricultural transformation series of workshops that included more than 60
Applying five lessons can help governments private-sector and development-partner actors. In
accelerate agricultural transformations using only six weeks, the government developed a food
digital approaches. production tracking tool and expanded it to track
indicators such as food prices. The tool permitted
Grounding the digital agenda in data to be visualized in real time by senior ministry
government priorities officials and catalyzed efforts to build more real-
Governments have much to consider when time visualizations for decision making.
selecting and building digital agriculture solutions.
In addition to the impact on core transformation Choosing partnerships carefully
priorities like increasing smallholder farmer Governments may seek to partner with private-
incomes, governments may wish to consider sector and development partners when incentives
who would benefit from a digital solution, and in align, including commercial terms, data privacy,
what part of the country; budgetary constraints; and ownership rights. The default answer for

6 How digital tools can help transform African agri-food systems

 Exhibit 2
Eachuse
Each usecase
caseisisdefined
definedbybyaaclear
clearkey
keybeneficiary,
beneficiary,
outcome, and digital tool.
outcome, and digital tool. 3

1 Key beneficiary 2 Outcome

2

●Smallholder farmers ●Increase farmer incomes

●Governments ●Enablers
●Increase agricultural output
●Government budget savings 1
●Boost food security

2
3 Tools
Smallholder farmers 3
Governments

●Pests and disease ●Weather early ●Farmer registry ●Agriculture data ●Land optimization
early warning system warning system Build a digital farmer platform model
Reduce crop losses Reduce crop losses registry with regularly Create transparency Improve value-chain
with an early warning with an early warning updated farmer pro- and improve baseline selection for optimal
system for pest and system for weather files, including farm for statistics by build- land use with a
disease outbreaks fluctuations to help location, farm size, ing a joint-access resource-optimization
and advice on actions farmers adjust their and crops grown to national agriculture model tailored to
to protect crops planting and harvest inform all the farmer- data platform specific outcomes
plans facing use cases (eg, jobs)

●E-extension ●Market informa- ●E-subsidy or ●Digitized ●Digital food

platform tion system e-wallet storage and balance sheet (FBS)
Improve farmer prac- Provide farmers with Target eligible farmers logistics facilities Manage national food
tices (eg, input use) regular crop market with e-subsidies for Increase the efficiency deficit by monitoring
by providing farmers prices from geo- inputs and mechaniza- of government stor- countrywide food
with customized located markets tion based on a farmer age facilities through production and con-
e-extension advice nearby to reduce registry, using digital capacity planning and sumption through a
on an easily search- market information tools and analytics to inventory-optimization digital FBS
able platform asymmetries improve performance analytics
of the subsidy program

digital agriculture use cases is not always to One example that emphasizes the importance
partner with private-sector players, many of whom of choosing partnerships carefully is a not-for-
are still figuring out how to make digital agriculture profit innovation called OPAL (“Open Algorithms”)
solutions commercially viable. Nonetheless, from a group of data for development pioneers
governments may benefit from addressing early including the MIT Media Lab, Imperial College
questions on data privacy and ownership. Partners London, Orange, the World Economic Forum, and
may have a commercial interest in maintaining Data-Pop Alliance.6 OPAL aims to create systems
ownership of the data, but this could inhibit and standards to mitigate associated privacy risks
development of a government or public digital tool, and capacity gaps so that data can be used for the
which may require a more open level of access, greater good and in a sustainable, scalable manner.
such as a farmer registry. The OPAL ecosystem is designed to work through

6
“OPAL 4-pager,” OPAL, Opalproject.org.

How digital tools can help transform African agri-food systems 7

 Digital solutions can be a powerful
way to accelerate agricultural
transformation if they are designed to
directly support outcomes such as
increasing farmer incomes.

a four-step process to ensure private data are including a farmer registry and agro-dealer
accessed and used ethically: prices for the inputs that farmers might purchase
from a network of providers. The best tool would
— Partner companies allow OPAL to securely produce a single answer: a specific subsidy amount
access their servers via a dedicated platform. allocated to specific farmers.

— Certified open algorithms are run on the servers One way to facilitate the development of such
of partner companies behind their firewalls. tools is through the application of agile ways of
working, including fast decision making, early user
— A governance system verifies the integrity of the engagement, and rapid iterations or sprints. The
algorithms and use cases. agile approach is increasingly popular in the private
sector, but governments can also employ it to
— Key indicators are derived from the data—for engage users early in the design of a digital product
example, population density, poverty levels, and and start testing early. For example, data sources do
mobility patterns—and fed into use cases to not need to be perfect. Start with sufficient data to
support decision making. build a working product and a plan to improve data
sources over time. It may require investing in broader
Applying agile thinking to design agricultural statistics improvements, but this could
digital products be done in parallel as an MVP is being iterated.
The digital agriculture space is quickly evolving.
Gathering market intelligence is critical to improve The Ministry of Agriculture of one Southern African
solution designs, ensure farmers have sufficiently country observed that its crops were generating
detailed data that are useful to them, and align low revenue. To change course, the ministry
the sector around a “single truth” on the final commissioned a project to rapidly build a land
output from the digital product. For example, an optimization model to identify crops with the highest
e-incentives tool for farmer-inputs subsidies may economic potential across the country’s major agro-
require the integration of several data sources, ecological zones. In four months and several design

8 How digital tools can help transform African agri-food systems

sprints, the model identified 18 crops suitable for to provide institutional stability separate from the
investment across the country’s five regions and government administration. Third, the government
made suggestions for which crops might be grown invested from the start in developing digital talent
in a particular region. Each design sprint improved rather than outsourcing its needs. It took nearly a
the selections. year to build an MVP and ensure that the bank’s
staff was fully trained to manage the system and
Building for the long term make fixes. Outsourcing this work to third parties
While the design and test phases should work toward could have accelerated time to completion, but it
an MVP, governments should build with a longer time would have made it more difficult to manage the
frame in mind. An MVP version is never complete; tool in the future as it scaled and the requirement for
governments should continue to iterate their digital digital talent grew.
products with user feedback. As a result, officials
should anticipate a program that runs for three or
more years. Implementation at scale will likely extend
beyond a single government administration. Employing digital solutions can be a powerful way
to accelerate agricultural transformation if they
This is particularly true when considering funding are designed to directly support outcomes such
digital talent. The number of data scientists, as increasing smallholder farmer incomes and
engineers, product owners, and other digital talent are not seen as add-ons or isolated digitization
required at scale can differ by orders of magnitude efforts. Governments that are committed to
depending on the MVP under development. digital agricultural solutions have seen or expect
Recruiting and training these people can take years, to see distinctive results in their agricultural
and securing financing for this undertaking early in transformation outcomes.
the process is key to building for sustainability.
These governments understand that both
An East African government partnered with the digital and nondigital aspects of the ecosystem
largest bank in the country to launch a product must be considered to accelerate agricultural
aimed at providing loans to farmers while collecting transformation—from digital and data infrastructure
data to reduce their risk profiles. The bank to regulation, financing, and in-person support
registered all of the country’s approximately 1.5 for smallholder farmers and agribusinesses using
million farmers and provided a platform for them to digital tools. But successfully implementing digital
receive subsidies from the government and to pay projects and transformations is hard—and most
for inputs at agro-dealers. of them fail in execution. Governments cannot
tackle all these challenges at once. Carrying out
To ensure sustainability of the tool, the government a handful of well-scoped and targeted use cases
took three steps. First, it aligned the new data can allow them to address these challenges in
architecture with existing databases and used manageable sprints to accelerate their agricultural
extension officers to verify all the registrations. transformations and improve food and nutrition
Second, the product was embedded within the bank security for all.

Lutz Goedde is a senior partner in McKinsey’s Denver office, where Ryan McCullough is a partner; Amandla Ooko-Ombaka
is an associate partner in the Nairobi office, where Gillian Pais is a partner.

The authors wish to thank Sara Boettiger, Jean Nyaguthii Edwards, Chania Frost, Sian Kiri, Rahmet Mohamed, Caroline
Mutuku, Brenda Odhingo, and Romain Paniagua for their contributions to this article.

Copyright © 2021 McKinsey & Company. All rights reserved.

How digital tools can help transform African agri-food systems 9