Drones in Africa – A Viable Business Model for Small Entrepreneurs
In May, Uganda Flying Labs conducted a drone application training course with 75% of the attendants coming from the nation’s agricultural sector. Uganda is not the only nation in Africa taking steps to adopt drone technology. In Togo, in West Africa, e-AgriSky, a vocational farmer’s training school, has recently admitted 16 students from across Africa to learn more about drones. Such private sector-driven initiatives may be the baby steps towards fully adopting the technology in Africa’s agriculture. While some argue that the small-scale nature of most African farms limits the application of drones, offering drones as a service is a viable option that entrepreneurs should consider. This model allows a few drones to be used by many farmers, delivering the benefits of drone technology in agriculture while realizing reasonable profits to ensure sustainability.
Drone technology traces its history to military applications, where it is deployed in aerial surveillance. In recent years, drones have found their way into agriculture in various applications, including land and crop surveying, inspection and monitoring, and agricultural assets and insurance. Previously, other technologies such as satellites and helicopters performed most of these applications at substantial operational costs and limited efficiency. Thanks to drones, which usually come equipped with sensors and software to gather and process data, most of the mentioned agricultural operations are now much easier to conduct and at a lower cost. While the technology’s adoption is at advanced stages in other parts of the world, its application in Africa remains a challenge for various reasons.
The African Union and NEPAD, in a report back in 2019, identified issues limiting the adoption of drones in African and grouped them into four categories, namely: technological, social, regulatory, and economic issues. Technical issues include limitations on a drone’s battery capacity, while social issues range from public safety and security to even data privacy concerns. Addressing these issues is a challenge, considering the absence of appropriate legal frameworks for adopting drone technologies in African states. Field data shows that a paltry 26% of African nations have come up with laws to govern the adoption of the technology. The civil aviation authorities of member states formulate these laws, and in many cases, agricultural applications are not prioritized. When coupled with the limited demand and supply of the technology in the continent, these challenges can continue limiting the adoption of drones in Africa unless remedial actions are taken.
Technological, social, and legal issues are likely to be solved at some point in the near future. As technology improves, drone features, including battery capacity, will likely improve, addressing technical and social issues such as public safety. Equally, as more African states commit to creating a legal environment to support agricultural technologies, the regulatory framework for adopting drones is likely to emerge. Solving the economic challenges is much more difficult as it entails, on the one hand, stimulating the demand for the technology while simultaneously developing a viable business model for suppliers to meet demand. I am optimistic that the latter will come naturally as more people become aware of drones and their relevance to agriculture. Developing a viable business model for the supply side, on the other hand, requires some work. Perhaps a good point to start is not to reinvent the wheel. Instead, let us look at other technologies that faced similar challenges and the models they adopted successfully in Africa.
When most modern machineries landed in Africa, they faced the same challenges as drone technologies. The small-scale size of African farms and subsistence production limited farmers’ ability to acquire the technology. Suppliers were torn on the best model to adopt to ensure farmers benefit from the innovations while still achieving their profit objectives. The machine-for-hire business model came from discussions to solve the challenges and has been adopted with tremendous success in many parts of the continent.
The model entails funding an entrepreneur to acquire a machine, operate, and maintain it. Such an entrepreneur should have the technical expertise to use the technology and have a sizable volume of agricultural operations to make the investment worthwhile. Here’s the catch, the entrepreneur is funded under one condition; they will hire out the machines to other farmers in their locality. This model has since evolved, and more private entrepreneurs are taking up machine-for-hire businesses without government support. An illustrative example here is the Tinga smartphone app developed in Kenya that allows users to hire tractors and other farm equipment from contracted suppliers via an online portal.
Entrepreneurs interested in launching drone businesses in Africa could consider this model. Instead of targeting the sale of drones in the continent, they could hire out drone-related services. When properly priced, even small-scale farmers should afford the services. The model will ensure that individual farmers benefit from drone technologies without bearing the burden of adopting a costly technology that they may not have the expertise to operate. On the other hand, suppliers will have access to practically the whole African agricultural market, considering that 86% of farmers in the continent operate on a small scale, do not have the means to acquire drones; but could benefit immensely from drone-related services. More importantly, the business model is sustainable as it will ensure suppliers enjoy consistent profits from hiring out drones instead of selling them, a model best suited for Africa.