Agriculture accounts for roughly a quarter of GDP across sub‑Saharan Africa and employs around 60% of the region’s workforce. Agtech investment surged through the last decade, reaching a peak around 2022 before the global venture downturn began to drag on the sector.
By 2025, total agtech funding in Africa had dropped to just under 170 million dollars, about 20% lower than 2024 and well below the 2022 peak. For the first time since systematic tracking began, both total funding and deal count declined in the same year. Briter’s data further show that 11 startups captured more than half of all agtech investment recorded in 2025, while 12 African agtech startups have each raised over 50 million dollars between 2016 and 2025.
The numbers suggest a sector in transition. Could they also be signalling something else entirely, a sector producing activity without the structural foundations that make that activity sustainable?
What the current trajectory is showing
Briter’s State of AgTech Investment in Africa 2025 shows capital moving steadily away from on‑farm processes such as farm management tools and input supply and toward post‑farm processes such as logistics, warehousing, food processing, and supply chain platforms. The same report and related analyses find that large equity rounds, which dominated agtech funding in 2022, have shrunk sharply: by 2025, equity accounted for less than half of sector capital, with a growing share coming from debt, grants, and hybrid instruments.
On the surface, deals are still happening. Investment is still flowing. Platforms are still being built. A reader scanning the headline numbers could conclude the ecosystem is maturing.
Could maturity and false growth look identical from the outside, only becoming distinguishable when the infrastructure built downstream has nothing left to process upstream?
Despite agriculture’s outsized role in employment and GDP, Briter’s data and other diagnostics show that agtech innovators still struggle to access risk‑tolerant capital at scale. The structural contradiction is not easing: post‑farm and asset‑light plays are attracting attention while on‑farm capital remains constrained.
The risk is not that funding numbers are inaccurate, but that they describe a sector becoming more visible while becoming less resilient: post‑farm infrastructure expanding faster than the on‑farm investment needed to sustain it.
Could the visible activity in the data be masking a structural withdrawal from on‑farm risk that the headline numbers are not yet capturing?
The policies already in place — what they have produced
Policy is not absent from this story. Across the continent, public institutions, development partners, and private investors have introduced instruments that are beginning to change how agricultural risk is shared. The question worth examining is whether those instruments are operating at the speed and scale the sector requires.
Nigeria: NIRSAL
In Nigeria, agriculture accounts for a significant share of GDP yet has historically attracted only a small fraction of total bank lending. That structural gap between the real economy and financial flows created the conditions for the Nigeria Incentive‑Based Risk Sharing System for Agricultural Lending (NIRSAL) to emerge as a flagship attempt to make agricultural credit bankable.
Recent data illustrate both the scale of the challenge and the impact of risk‑sharing. Agriculture’s share of commercial bank lending in Nigeria fell from 6.18% in 2022 to 4.82% in 2024 before rising again to 5.33% by May 2025, according to figures cited by analysts drawing on Central Bank of Nigeria statistics. NIRSAL reports that it facilitated approximately 70 billion naira in commercial financing for agriculture in 2025, describing this as its strongest year on record in terms of credit unlocked through its risk‑sharing mechanisms.
This is institutional risk‑sharing producing measurable results. Banks that previously avoided agricultural lending because they could not price the risk now have a framework that absorbs part of the downside and makes rural credit more manageable.
Yet NIRSAL is a single institution in a single market. Agricultural lending as a share of Nigeria’s total credit portfolio remains well below the sector’s contribution to GDP, and the country’s broader agricultural productivity challenges have not been solved by the increase in lending alone.
What would the continent’s agtech financing landscape look like if a NIRSAL‑style risk‑sharing framework (not the exact institution, but the core logic of government‑backed guarantees and technical assistance for banks) operated simultaneously in ten of Africa’s largest agricultural markets?
Kenya: The One Million Farmer Platform
In Kenya, agriculture contributes more than a fifth of GDP and employs a large share of the workforce. Over the past decade, the country has also become one of the continent’s most visible test beds for digital agriculture and climate‑smart farming models.
The One Million Farmer Platform, developed with World Bank support through Kenya’s climate‑smart agriculture and inclusive growth programmes, connects farmers, extension services, and private agtech providers through shared digital and advisory infrastructure. Project documents describe it as a vehicle for scaling climate‑smart technologies, farmer field schools, and disruptive agricultural technology services across dozens of value chains.
The platform’s logic is straightforward. When public policy connects agtech startups directly to farmer networks at scale, farmers gain access to better tools and information, and agtech companies gain digital data trails that make their models legible to lenders and equity investors. The trust deficit that pushes capital toward debt and away from equity begins to narrow because the opacity that created it starts to clear.
Yet even in one of the continent’s most advanced digital agriculture environments, food security remains fragile, with recurrent episodes of drought‑related shortages, price spikes, and localised hunger.
Is the gap between policies that work in pilot form and a problem that continues to worsen at scale the most important signal for policymakers to examine?
The African Development Bank: Catalytic Finance
At the continental level, the African Development Bank’s Agri‑Food SME Catalytic Financing Mechanism illustrates what well‑structured concessional capital can do. Designed with support from partners such as Canada, it combines concessional finance, technical assistance, and risk‑sharing instruments to make agri‑food SMEs more attractive to commercial lenders.
AfDB and donor briefings present the mechanism as a way to use a relatively small pool of concessional resources to unlock much larger flows of public and private investment along agricultural value chains. Early reporting indicates that each dollar of concessional funding can mobilise several dollars of additional finance when deployed through partner financial institutions under a clear impact and risk‑sharing framework.
This catalytic structure is the blended finance argument made concrete. First‑loss capital and guarantees absorb the riskiest tranche. Private investors follow because their downside is partially protected. Founders access financing without bearing the full weight of sectoral risk alone.
Yet the scale of Africa’s agricultural financing gap, estimated in tens of billions of dollars annually across IFAD, FAO, and IFC diagnostics, dwarfs even a well‑designed facility of this kind. Hundreds of agri‑SMEs reached across a continent of millions of smallholders and thousands of growth‑stage firms is demonstrative rather than transformative.
No continental mechanism currently links these national and institutional efforts into shared infrastructure for risk‑sharing, data interoperability, or DFI coordination, leaving proven models to operate as isolated pilots rather than a coherent system.
Could the distance between what catalytic instruments have proven possible and the volumes they are currently deploying be as structurally significant as the financing gap they were designed to close?
What is actively working against the sector
Not all existing policy and institutional architecture supports the evolution that the data suggests is needed. Two structural frictions stand out in the current landscape.
The first is the typical ticket size and mandate of development finance institutions. DFIs and similar actors, who are formally tasked with de‑risking investment into sectors like agtech, often operate with minimum ticket sizes in the multi‑million‑dollar range and return expectations calibrated close to commercial benchmarks. An early‑stage on‑farm founder who needs 300,000 dollars in patient capital to test a model is invisible to that system.
Could the design of the very institutions mandated to de‑risk African agtech make them structurally incapable of reaching the founders who most need de‑risking?
The second is budget allocation misalignment. Across many African countries, agriculture’s contribution to GDP and employment far exceeds its share of public spending, with agriculture typically receiving a low single‑digit percentage of national budgets despite long‑standing commitments such as the Maputo and Malabo declarations. This structural pattern has remained stubbornly constant in spite of repeated policy statements about the importance of food security and rural livelihoods.
Could that misalignment, where governments extract value from agriculture while underinvesting in its resilience, be one of the root causes of the trust deficit that drives private capital from equity toward debt?
The policy lag reality
Policy debates often proceed as if systems respond to intervention on a one‑year lag. The evidence from instruments already in play suggests otherwise. NIRSAL’s current impact in Nigeria is the result of more than a decade of institutional evolution and learning. Kenya’s digital agriculture infrastructure has taken years of iterative investment and project cycles to reach its current scale.
The policy window that matters is rarely the next budget year. Decisions taken in 2026 will shape the contours of 2029. The choices postponed in 2026 will show up as unaddressed vulnerabilities in 2030.
Is one of the most serious governance risks in African agtech that policymakers are working on political timelines while the sector operates on systems timelines measured in decades?
Three policy directions the data supports
The first is continental risk‑sharing infrastructure. The experience of NIRSAL suggests that government‑backed risk‑sharing can unlock agricultural lending that would not otherwise occur. What is missing is a way for multiple African markets to adopt variations of this model without each country having to design and capitalise an institution from scratch. Nigeria, Kenya, Egypt, and Ghana consistently appear among the top destinations for agrifoodtech investment in Africa.
What would happen if those four markets embedded coordinated risk‑sharing frameworks into a continental architecture linked to the African Continental Free Trade Area, with technical templates and pooled guarantees that other countries could adapt?
The second is DFI mandate reform. Without more flexibility on minimum ticket sizes, time horizons, and return expectations for early‑stage on‑farm investments, instruments designed to de‑risk the sector will continue to serve the companies that need de‑risking least. Experiences from AfDB’s catalytic financing mechanism show that concessional capital can be structured to mobilise much larger volumes of commercial funding into agri‑SMEs.
Could the single highest‑leverage policy change available to many African governments be a mandate adjustment inside existing DFIs, rather than the creation of entirely new programmes?
The third is data infrastructure as continental policy. Kenya’s climate‑smart agriculture programmes demonstrate how digital platforms and farmer registries can make producers visible to both investors and service providers. What is missing is cross‑border interoperability that would allow a farmer’s digital profile in one country to support credit access and commercial relationships in another.
Could the absence of interoperable agricultural data standards across African markets be costing the continent more in foregone investment than the cost of building that infrastructure?
What happens if none of these policies arrive
If 2026 ends without meaningful progress on risk‑sharing infrastructure, DFI mandate reform, and interoperable data standards, the patterns visible in current data will likely harden. Funding volumes will remain subdued relative to earlier peaks. On‑farm investment will continue to lag post‑farm infrastructure. Over time, capacity constraints in production will begin to show up as throughput shortfalls and margin pressure downstream.
In such a landscape, founders building in agtech will have little choice but to adapt their models to minimise exposure to creditor risk. That adaptation could mean prioritising revenue from the earliest stages, favouring asset‑light services over infrastructure with long payback periods, and seeking hybrid instruments that blend grants, revenue‑based finance, and softer debt rather than relying on traditional loans.
Could that pattern, in which founders rationally build smaller and safer businesses to survive the financing environment, itself become a structural ceiling on how far the sector can grow?
Industry incumbents in logistics, processing, and retail will also need to reconsider their assumptions about upstream supply. Treating smallholder relationships strictly as procurement channels in an era of chronic underinvestment in production risks leaving expensive downstream assets underutilised.
What risks do policymakers incur by waiting for more years of data to confirm trends that are already visible in current funding and lending patterns?
The questions this series leaves open
At the 9th Annual Learning Event hosted by Mercy Corps AgriFin in partnership with Briter in 2025, stakeholders from across the agtech ecosystem gathered to examine these tensions between innovation, investment, and inclusion. A shared diagnosis emerged: agriculture employs most of Africa’s workforce, yet agtech innovators still face persistent capital gaps.
Three hundred people in a room acknowledging the problem is a starting point. The question is what happens when they leave the room.
What might a NIRSAL‑style model look like if adapted into a continental risk‑sharing mechanism, capitalised through AfDB and partner DFIs and standardised across multiple markets?
And what if DFI mandate reform, particularly on minimum ticket sizes and return targets for early‑stage on‑farm investment, is the most powerful policy lever available in the short term?
What would it take for African governments to treat the continental agtech financing gap not as a marginal development issue but as a systemic risk to food security that requires structural intervention at the scale the numbers imply?
What does the continent risk if policymakers wait for 2027 to confirm what the data is already signalling in 2026, knowing that any intervention enacted then will not compound into structural change until the end of the decade?
The window is open. In systems where cause and effect operate on a multi‑year lag, the cost of waiting is always paid by those with the least protection.
