Energy can generate growth in Tanzania's rural economy

05Apr 2021
Editor
The Guardian
Energy can generate growth in Tanzania's rural economy

A new study shows that lack of robust energy services in Africa’s agriculture sector is a major obstacle to the sector’s growth. Agriculture and agribusiness together are projected to be a $1 trillion industry in sub-Saharan Africa by 2030, and access to sustainable energy should be at the top of-

-the agenda for the sector’s transformation.

The November 2020 study by Factor[e] Ventures titled, “The Opportunity at the Nexus of Energy and Agriculture” reveals existing gaps in designing solar-powered irrigation, agro-processing, dairy farming, and cold storage projects in Uganda, Nigeria, and Kenya, lessons learned, and five agriculture-energy opportunities that can attract commercial investors.

With limited energy and technology to grow, harvest and process crops, profits are lower, restricting the potential income for farmers and frustrating the growth of rural communities and the agricultural sector, the report notes.

According to the report, agricultural systems in sub-Saharan Africa are underpowered. Energy is an essential service for modern agricultural economies enabling farmers to irrigate, work the land, refrigerate, dry, heat, process, and transport crops.

The lack of robust energy services in rural areas is a fundamental obstacle to development. With limited energy and technology to grow, harvest, and process crops, profits are lower, restricting the potential income for farmers and frustrating the growth of rural communities and the agricultural sector.

Growing agribusinesses and smallholder farmers need modern energy to thrive, but lack the technical knowledge, financing, and project development and management capacity to access energy services. Rural energy enterprises, in turn, need reliable energy consumers anchoring demand for their services.

“Agriculture in sub-Saharan Africa is underpowered. Growing agribusinesses and smallholder farmers need modern energy to thrive, but generally lack the technical knowledge, financing, and project development and management capacity to access energy services. Rural energy enterprises, in turn, need reliable energy consumers anchoring demand for their services. Agriculture should be a key market for rural energy providers.

To power Africa’s agricultural economies, we need a stronger foundation of agricultural businesses and farmer-aligned intermediaries, a deeper pool of quality innovative enterprises and relevant technology innovations, matchmaking to pull agricultural actors, energy providers, and technology innovation together, and partnership from governments, developments finance institutions, and philanthropies to absorb risk and drive scale,” Silverman added.

True energy is an essential service for modern agricultural economies, enabling farmers to irrigate, work the land, refrigerate, dry, heat, process, and transport crops.Engines supply only 10 per cent of farm power in Africa. Only 4 per cent of agricultural land in Africa is irrigated.  

If agribusiness in sub-Saharan Africa is to become a one trillion-dollar industry in the next 10 years, rural development efforts will need to span both energy and agriculture. Projects need to focus on big target opportunities to encourage agribusiness, energy, and technology actors to work together.

Energy access and technology adoption in agriculture must accelerate through motivated agricultural, energy, and technology enterprises. This means building the capacity of those operating in agriculture and assembling the physical and financial infrastructure they need to grow.

According to the report, renewably powered technologies could fix agriculture’s problems. However, the many established innovations that have not been widely adopted show that technology alone is not enough. Solar irrigation pumps remain substantially underutilised despite attracting lots of funding. To unlock the value that solar dryers can deliver, drying centres need strong leadership from a motivated dehydrated products trader to operate effectively.  

As to what do these findings mean for the agricultural sector in Africa, Silverman, said: “Unlocking the opportunity at the nexus of energy and agricultural is essential for agriculture in Africa to realise its potential. Productive and efficient agricultural sectors cannot be built without reliable access to reliable, modern energy

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