Are we at the dawn of African agri-tech innovation?

Africa is often associated with problems such as food security, water scarcity and the need to make crops more resilient to climate change. But as the continent’s population grows, so does its investability, said Kesseba.

CRAF is a recently launched US$50 million pan-African impact fund. It backs early-stage startups in sustainable agriculture and the nature economy. Kesseba, a 25-year veteran of the agri-food sector investment ecosystem, explained the challenges and rewards on offer in Africa.

The continent is 18% of the global population, yet it attracts a mere 1% global agri-tech investment, with the large bulk of that going to just three countries: Kenya, Nigeria and Egypt. Population growth, meanwhile, is set to explode in the next two decades in a so-called ‘youthquake’.

Investors are taking note. Yet the food and agricultural challenges are steep.

“We are looking to support and drive investments to transform our African food system which is under severe pressure,” Kesseba told AgTechNavigator.

“How can we help reduce loss of natural capital?” asked Kesseba. “Africa is blessed with so much natural capital; so many vibrant and biodiverse processes that are getting lost and we are investing in ways to create value where the value allows you to preserve.”

Meanwhile, as it grows, commentators in Africa have urged that the Western model based on mass industrial agriculture, fossil-fuel-based inputs, and ultra-processed foods is avoided​.

'We have the worst food security in the world'

Africa has one of the fastest-growing populations in the world, with Nigeria now projected to be the third most populated nation in the world after India and China by 2050. “But we still rely massively on huge imports. At best, countries will import 40%. That can rise to 90%. So although we have the most available arable lands; the most available youth; the most available natural capital, we have the worst food security in the world.”

These challenges have resulted in CRAF investing in Ghana-based edible insect start-up Legendary Foods, which grows vertically-farmed insect larvae from the palm weevil as a food and beverage source – particularly milk substitutes. It was founded by Shobhita Soor, formerly of the Aspire Food Group in the US, which makes cricket-based pet food. “Ghana is very reliant on food imports and she saw a massive value in creating products out of the protein of this insect,” explained Kesseba.

Another member of the CRAF cohort is Egypt-based precision agriculture start-up Visual and Artificial Intelligence Solutions (VAIS), which offers farmers geospatial analytics. “On average using their systems can give a farmer 30-40% direct cost savings,” Kesseba claimed.

CRAF has also invested in biotech company Chitosan Egypt, which extracts chitin from shrimp cells to make organic fertiliser.

‘Africa must be competitive if it is to truly develop’

As well as investments that promise to transform the African agri-food sector, what other qualities does the fund look for? “A starting point is always the team and founders and how passionate they are, followed closely by: what problem are they addressing, and it is it a real problem within our geographies? We want to know how are they addressing that.

“Lastly and but very importantly for us, we are of the mindset that in order for Africa to really develop we cannot look at investment opportunities as being patient or purely impactful only. They must be commercially able to compete with the rest of the world.”

CRAF is looking to deploy investments in the coming two years and then start working on its second fund. While the agri-food sector makes up 60 to 75% of its investments currently, climate-focussed spending will increasingly its area of focus as the fund seeks nature based solutions to mitigate further loss of natural capital in Africa.

“Fintech was the enabler for agri-food in Africa,” Kesseba said. “We believe that agri-food will be that same unlock for climate, as fintech was for agri-food."