An investors’ guide to Africa’s emerging seed markets : Report of the research on generating seed market intelligence

Abstract

Fragmented market intelligence is the major barrier to investment in Africa’s emerging seed markets, according to participants in our June 23rd conference session on An investor guide for Africa. There is significant demand for a service of assessing the attractiveness of emerging seed markets in Africa for (impact) investment. The service should go beyond collating relevant information from diverse sources, by interpreting it and making informed recommendations to (impact) investors. We intend for our report to offer a substantiated value proposition for an entrepreneur or institution interested in prototyping and anchoring this service. We do this with the view to increase intelligence on Africa’s emerging seed markets. This report shares what Wageningen Centre for Development Innovation has uncovered through research about seed market intelligence in Africa. The research has been conducted mostly online involving literature review, key informant interviews with 20 leaders in government, industry, science, and civil society and panel discussion about the actual intelligence and minimum viable product for a service they require in making investment decisions. Among them were respondents from: the African Union Commission; the regional economic community COMESA; national, regional, and multinational seed companies; development finance institutes and commercial lenders; international agricultural research institutes, other knowledge institutes, and consultants; the African Seed Trade Association (AFSTA); and an International NGO. The research revealed several useful platforms, indices, and reports offering data for indicators of relevance to investors. Sources of market intelligence for the entire African region are included in the report. However, each does not cover all countries and dimensions of interest. We assessed 12 of them and learned that The African Seed Access Index (TASAI), Access to Seeds Index of the World Benchmarking Alliance, and Enabling the Business of Agriculture index of the World Bank overlap in 17 countries where data from CAADP Biennial Reviews are also available. These countries across Western and Central, and Eastern and Southern Africa offer the most readily available information for making investment decisions. Our research also resulted in the convergence of multiple indicators around four categories. This includes those that assess: (i.) seed sector performance; (ii.) the potential absorption of crop harvests in outputs markets; (iii.) current progress against targets for development impact; and (iv.) other variables of the country context. Cascading from that level of aggregation are three topics (sub-categories) in each. For the seed sector these include indicators of seed demand, seed supply and seed regulatory function. For output markets these include the size or value of these markets, the level of investments made in farm productivity, and organization of producers in leveraging economies of scale. For impact these include different indicators of poverty reduction, food security and nutrition, and climate change adaptation and mitigation and biodiversity conservation, management, and use. And lastly, for country context these include demographics, political and economic stability, and infrastructure. A mosaic of data is available from the indices and other sources of information mentioned above. Important to our efforts to collate these data are their availability in the public domain. Our research offers a substantiated value proposition and minimum viable product for the service. What it falls short of doing is outlining a viable business model for anchoring this service in the seed sector. Should an entrepreneur or institution be interested to pilot the service in Africa, we advise that they thoroughly consider the business model, including partnerships and revenue streams. A critical resource (and cost in the model) includes expertise on seed, seed business, and/or seed systems. Without this knowledge, based on our determination of the minimum viable product, accurate interpretations of the data cannot be made reliably. Collation is not enough to inform investment decisions and (impact) investors are looking for qualitative recommendations as well. We offer some cues for the curation of these data.