The revenue accruable from agriculture as well as the oil mineral sectors portends bright and promising socio-economic prospects for Africa. Africa’s agricultural and oil-blessed economies could contribute individually and collectively to promoting positive structural transformation and also address poverty, inequality and youth unemployment by capitalizing on their resource endowments and high international commodity prices. Against this background, increasing number of African countries have continued to experience economic growth over the past two decades, partly due to their commitment to achieving the CAADP objectives, as well as the unprecedented inflows of foreign direct investments (FDI) to the strategic sectors of their economies. According to the UNCTAD World Investment Report 2012, investment in extractive industries remains the most important driver of FDI to African countries such as Democratic Republic of the Congo, Mauritania, Mozambique and Uganda. Further inflows to Mozambique, for example, doubled to USD5.2 billion, attracted by the country’s huge offshore gas deposits. The discovery of gas reserves in the United Republic of Tanzania and oil fields in Uganda drew increased FDI to East Africa, expanding the value from USD4.5 billion in 2011 to 6.3 billion in 2012.
By implication, natural resources (including agriculture-related) are still the mainstay of FDI flows in Africa, though FDI in consumer-oriented manufacturing, agro-allied and services are beginning to climb, reflecting the growing purchasing power of Africa’s emerging middle class. Invariably, these Greenfield investments (investment in businesses or economic sectors that are new to a given recipient country) partly reinforces the role of diversification policies as levers for economic transformation in Africa.
However, poverty is still quite high and governance institutions remain pathologically weak, thereby, undermining the capacity of the regional economy to manage its oil wealth and agricultural booms in an accountable and transparent manner. In fact, Africa’s growth has been non-inclusive and highly characterised by insufficient poverty reduction, persistent unemployment, increased income inequalities and political tyrannism.
At the 2012 UNECA Eighth African Development Forum (ADF-VIII) on Governing and Harnessing Natural Resources for Africa’s Development, during the roundtable on ‘mineral resources for Africa’s development: anchoring a new vision’, it was emphasised that Africa should have a vision that dispels the misconception of linking Africa with resource curse.’ In other words, natural resources and agricultural booms should stimulate blessings rather than invoke curses on Africa.
A strategic policy dialogue should be organized in order to identify the conditions under which oil rents will be efficiently collected in order for it to positively transform African economy. According to the 2013 AfDB African Economic Outlook, this dialogue should build on the following two key pillars: (i) how to maximise the utilization of the oil revenue collection while ensuring predictability of outcomes and an adequate rate of returns on investments; (ii) how to develop, establish and strengthen oil revenue management, institutions and governance, such that, managing revenue volatility should be based on the adoption of transparency and accountability tools.
Gbadebo Odularu
Ghana’s six mobile network operators have been slow to take advantage of agricultural value chains in the provision of mobile services.
Visit Ghana and ask for the phone number of any ordinary person on the street, and most likely you’ll be given the option of two or three different mobile network operators (MNOs) to choose from. Ghana has 19 million cell phone subscribers for its over 24 million inhabitants — an impressive proportion — most of whom subscribe to more than one operator.
Ghana is one of Africa’s most vibrant and innovative communications markets. It launched the first cellular mobile network in sub-Saharan Africa in 1992, and was one of the first countries on the continent to be connected to the Internet and introduce ADSL services. A market leader in terms of liberalization and deregulation, Ghana Telecom in 1996.
Ghana is serviced by six MNOs, including: Scancom (MTN) with 50% of the market share; Millicom (Tigo), 21%; Vodafone Mobile, 18%; Bharti Airtel, 10%; and Expresso and Glo, the most recent additions with the smallest market shares.
In mid-2010 the voice market reached more than 70% penetration, but huge potential still exists for the 3G broadband services that were launched in 2009.
Mobile services
In terms of economic impact, the telecoms sector has contributed significantly to the country’s increase in GDP over the past twenty years and there is still massive room for growth. The question, then, is how many of these businesses have ever rolled out an innovation to support agriculture?
Value-added services such as mobile money have created jobs in the telecommunications and banking sectors as well as for the more than 4000 merchants in Ghana’s mobile money system. MTN’s Mobile Money was the first mobile or branchless banking initiative in the country and operates in partnership with nine of Ghana’s banks. They currently have more than two million active users and MTN expects this number to grow through the education of subscribers on the benefits of switching from cash payments to electronic ones.
But outreach activities rarely address the needs of our smallholder farmers. Is it because MNOs consider farmers to be poor to use the services, or perhaps not sufficiently savvy on Information and Communication Technologies (ICTs)?
Operator Risks
Risks factors for mobile banking operators come in the form of strategic, reputational, compliance and operational risks. Operators need to keep a close eye on their outsourced providers, ensuring their activities are consistent with the overall strategic goals of the regulated entity — a task that may not be easy in the isolated, rural areas where most of our smallholders are located.
The same is true of reputational threats, which come in the form of poor service via third-party agents or consumer experiences that are inconsistent with the overall standards of the operator. Operators may have difficulties with ensuring that privacy, consumer and prudential laws are complied with at all times.
Operational risks are usually the biggest risk to operators. Technology failure, human error, cyber fraud, agent fraud, insecurity and unreliability of services and lack of customer education are just a number of factors that put operators at risk when lending their services to all users, smallholder farmers included.
Operator benefits and Africa’s booming mobile market
With so many potential risks, what are the incentives for getting involved in mobile services?
The simple answer is to have the ability to reach millions of new customers and offer a multitude of services from bank loans to account payments. Or, let’s not forget, to supply vital agricultural updates that could improve the quality of lives of millions of people and assist in the economic growth of many countries.
The rapid growth of the mobile market across Africa has had a positive impact on the continent’s economic growth. As the telecommunication sector grows, jobs are created not just within the MNOs, but also for their agents and supply chain partners.
Local businesses are benefiting from mobile banking as payments are easily made in the business to business and business to customer arena. Mobile application development has resulted in initiatives which have a massive effect on agriculture, medicine and the non-profit sector.
My worry is this: During the 6th Africa Agriculture Science Week (AASW6) conference held recently in Accra, Ghana, over 90 booths were sponsored by exhibitors attempting to speak to the theme of the event, “Africa feeding Africa through agricultural science and innovation.” Fascinating technologies like the the all new ‘fufu’ making machine and fresh research findings like the “Push-Pull” strategy for pest management were exhibited by individuals, institutions and research organizations from Africa and the world over.
Among all these happenings, I failed to recognize any of the booths being occupied by an MNO. Maybe they don’t have anything to exhibit. But farmers use their services too — so why aren’t they here?
Full inclusion of the various mobile money services in the agricultural value chain could benefit both farmer livelihoods and the bottom line of mobile operators. I am of the strong opinion that its about time that MNOs are tasked with factoring farmers in to their innovation strategies. Maybe in three years’ time, at the next AASW, we’ll see a couple of MNO booths in the lineup.
Blogpost by Nana Darko, Rite 90.1 FM and a social media reporter for AASW6.
Photo: W. Vota
The 
