Agri investments in Africa remains under pressure

By Glenneis Kriel | 21 November 2024 | 1:00 pm

Investments in agrifoodtech in Africa is showing a slight recovery after crashing from a peak of over US$700 million (about R12,7 billion) in funding in 2022 to US$275 million (R5 billion) in 2023.

In the first half of 2024, Africa agrifoodtech start-up investments increased by a modest 1,6% compared with the first half of last year to US$145 million (R2,6 billion), according AgFunder’s recently released Africa Agrifoodtech Investment Report 2024.

Funding for 2024 up until mid-August reached US$157 million (R2,8 billion) across 47 deals.

Whether investments will be up for the whole year remains uncertain. Louisa Burwood-Taylor, head of media and research at AgFunder, said in the report that the continent might be in for another down year if Nigeria was an indicator of overall African agrifoodtech investment health.

The region has fallen from being the most active regional investment market to the third place, closing a mere five deals worth US$15 million (R270 million) so far in 2024.

Kenya has been the most successful country so far, accounting for 53% of total investments in the continent and closing 19 deals worth US$83 million (R1,5 billion). Egypt took second place with 15% of the deals and six deals totalling US$24 million (R435 million).

South Africa took eighth position, closing four deals totalling US$1,5 million (R27,2 million).

Over the past decade, global investors contributed US$2,4 billion (R44 billion) to African agrifoodtech ventures, with Kenya, South Africa, Nigeria and Egypt jointly accounting for 88% of the total investments.

Kenya took first place, closing 217 deals totalling US$833 million (R15,1 billion), and South Africa second place with 175 deals totalling US$511 million (R9,3 billion).

The rise in funding during the first half of 2024 was accompanied by a 27% decrease in deal count, as investors focused less on seed stage deals and more on financing growth.

Ben Leyka, CEO of African Agric Council, told Farmer’s Weekly that the huge decrease in agrifoodtech investments since 2022 should be seen in the context of what has been happening in the rest of the world where investment also declined substantially for various reasons, ranging from geopolitics to adverse climatic conditions, which might result in a redirection of investments.

Leyka said that most of the funding he has seen is not moving towards primary agriculture, but agri-processing, agri-technology, logistics and storage, which in turn is helping to a more productive farming environment by for example helping to link farmers with markets, reducing climate and marketing risks and reducing wastage.