Agricultural Sector in Africa
The 2022 Global Report on Food Crises 2022 Mid-Year Update estimates that acute food insecurity affects 140 million individuals in Africa. Agriculture has a significant social and economic impact on Africa — according to a McKinsey&Company analysis in 2019, smallholder farmers account for more than 60% of sub-Saharan Africa’s population and agriculture accounts for around 23% of the region’s GDP. The analysis also determines that Africa has the potential to multiply its cereal and grain output threefold. Nonetheless, most of Africa’s agricultural potential remains unexplored. However, realizing the full agricultural ability of Africa will require investments in fertilizers, irrigation, storage, infrastructure and more. Hello Tractor seeks to advance agricultural productivity in Africa.

Agriculture in Africa constitutes one of the primary sources of income as roughly two-thirds of Africa’s people work in the agricultural sector in Africa. Rural farmers have found it difficult to increase their productivity and their capacity to generate more food because of the “cost of mechanizing agriculture,” the World Economic Forum says.

Hello Tractor’s Solution

Jehiel Oliver, the founder of Hello Tractor, tells Forbes that African smallholder farmers typically lack access to the agricultural equipment necessary to expand cultivation and increase yields due to the high costs and no access to financing.

“I realized, if farmers have access to a tractor, that’s as good as owning one,” Oliver tells Forbes. He then started Hello Tractor in 2014, initially in Nigeria, where, via a digital app, one can establish a link between the tractor owner and the farmers, where the latter can rent the tractor to farmers to increase agricultural production and generate greater profits.

Hello Tractor implemented innovative digital tools with the purpose of connecting tractor owners, operators and farmers. The app includes several features. For instance, tractor owners can utilize GPS monitoring to oversee the movement of the tractor and find out information on the active and inactive hours and the number of trips made. Through the app, one can also monitor the fuel consumed by the tractor, the fuel prices and the scheduled activities for each tractor in the field.

“Hello Tractor technology makes fleet management easier and more profitable, supporting every aspect of your fleet from managing your tractor operators to your farmer customers,” its website says. Besides operating in 15 African countries, Hello Tractor also works in Bangladesh, Pakistan, Guatemala and Jamaica.

Pay-as-you-go Model

In January 2022, Hello Tractor launched the pay-as-you-go (PAYG) financing program for the agricultural sector in Africa, which “aims to significantly increase the number of tractors available to service farmers across sub-Saharan Africa by providing flexible financing to entrepreneurial youth and women who want to buy equipment to provide mechanization services to farmers in their network,” Ventures Africa says. The PAYG program is supplying $10 million in tractor loans, reaching more than 111,000 additional farmers. The program has the potential to generate at least 3,500 new jobs.

Hello Tractor is currently collaborating with the Nigerian Federal Ministry of Agriculture and Rural Development and John Deere on a five-year plan to deploy 10,000 tractors. Using the pay-as-you-go system, the government will implement a model that “allows tractors to be leased to new owners over a defined period of time, before being resold to them at a discount,” Oliver told Forbes, with Hello Tractor as an implementation partner.

By the end of five years, Hello Tractor predicts that the initiative will generate 2 million jobs and 37 million tonnes of food using 9 million hectares of agricultural land.

The Impact of Hello Tractor on Farmers

As of August 2022, Hello Tractor has provided tractor services to more than 500,000 farmers, with 55% of them obtaining their first mechanization services through the company. Approximately 87% of these farmers reported gains in profits as a result of mechanization access.

Through the services of Hello Tractor, farmers have the opportunity to gain greater and more precise information on the types of crops to produce, when to ideally cultivate the crops and even the worth of the final harvest. Smallholder farmers can also more easily qualify for bank loans and grow their businesses by providing the banks with projections “based on verifiable targets” from Hello Tractor.

Looking Ahead

In 2021, Fortune’s Change the World list featured Hello Tractor as one of 53 companies using innovation and creativity to address issues impacting communities.

Accessible and inexpensive tractor services for smallholder farmers through this game-changing technology has the potential to boost agricultural output and farmer revenue in the agricultural sector in Africa, resulting in a more secure food system and less poverty.

– Elena Luisetto
Photo: Flickr