Zimbabwean billionaire Strive Masiyiwa is transforming farmers’ fortune through innovative cell phone technology
Strive Masiyiwa, founder of Zimbabwe’s biggest telecommunications company, Econet Wireless, is a firm believer in agriculture. He sees the sector as a lucrative investment focus for companies and a significant contributor to economic growth, boosting commerce and enhancing opportunities for the business sector.
Econet Wireless already has 8.5 million mobile network subscribers and 3 million users for its mobile money transfer platform, EcoCash. It has invested $1.2 billion in the Zimbabwean economy since it was licensed, helping grow both the telecommunications industry and local economies by creating jobs – more than 50,000 if you count both direct hiring and indirect employment, says its CEO Douglas Mboweni. According to Mboweni, Econet Wireless has also created opportunities for over 20,000 small businesses and has signed on more than 25,000 people as airtime and EcoCash agents. All this growth goes a long way to- wards achieving Masiyiwa’s vision of bettering people’s lives through technology.
The next step in bringing Econet’s motto to life is EcoFarmer, a mobile-based weather-indexed insurance, agricultural information and trade platform. The application aims to boost agricultural productivity in Zimbabwe, help cover farmers during drought periods and inform them about markets for their crops. It could become vital for agricultural planning purposes, as it also serves as a conduit for weather information.
“EcoFarmer is an all-round tech solu- tion packaged for agriculture, covering not just insurance but also access to fi- nancial services, market linkages, trading (mobile commerce), and agriculture tips dissemination,” says technology expert and blogger, Soul Kabweza. According to Kabweza, Econet is “effectively seeking to address farmers’ problems in producing as well as selling; traders’ problems buying from the farmers; financial institutions’ problems providing insurance cover; and access to finance for the farmers.” It will also help input manufacturing companies more efficiently sell fertiliser, seed and other inputs to farmers.
Masiyiwa believes the concept has the ability to “totally transform agriculture” in Africa. He is not the only African magnate to see possibility in the continent’s croplands: Aliko Dangote, the richest per- son in Africa, chose to invest in agro-processing businesses because he believes the sector offers good returns on investment.
Investing in Zimbabwe’s future
Economists in Zimbabwe told Ventures Africa that the EcoFarmer initiative would benefit other parts of the country’s economy too, such as companies in Zimbabwe’s insurance and re-insurance sectors. Econet requires an underwriter to successfully run the weather-indexed insurance component of the platform. “There is a value chain coming from this innovative initiative,” says Zimbabwean independent economist, Moses Moyo. “It runs from seed manufacturing, insurance, agriculture-produce marketing and even manufacturing, as most of Zimbabwe’s manufacturing industry is agro-based.”
Aggregating specialist information about the planting and preparation of various crops and bringing the result right to the farmers’ mobile phones will boost productivity in agriculture. Indus- try and Commerce Minister, Mike Bimha says that a revamped agricultural sector – along with better access to raw materials in general – could help revitalise the country’s economy. As things currently stand, Zimbabwe’s food manufacturing companies have resorted to imports of crops such as potatoes, citrus, tomatoes and onions, brought in mostly from Mozambique, South Africa and other neighbouring countries. Zimbabwe’s manufacturing industry is currently bogged down at 39 percent capacity, a figure most executives attribute to these and other ex- pensive raw material imports, as well as inadequate working capital.
A Sound Bet for Econet
Branching into sectors beyond traditional telecommunications is key for Econet’s sustainability as a business. Mboweni has admitted that growth in the company’s traditional revenue driver, voice, is slowing down, due primarily to intensifying competition from cheaper alternative-call technologies and emerging data platforms such as WhatsApp, Viber, and Skype. “We have been aware of [the market shift] for a long time and we are addressing it by investing in and developing new sources of revenue,” says Mboweni. Econet is currently pursuing an investment strategy aimed at diversifying the company’s revenue stream to encompass financial services, buying into Steward Bank and developing EcoCash. The strategy, which Mboweni said is riding on the infrastructure that Econet Wireless has invested in over the past few years, also led to the establishment of EcoFarmer.
Despite shifts in the telecommunications market, Econet is on a path of solid though not increasing growth. The company reported in November 2013 that first half revenues for the period to the end of August had increased by 11 percent, to $376.6 million. This translated to a net profit for the period of $70.56 million, down from the previous period’s net profit of $78 million. The company invested $85.4 million on its network during the same period.
Econet is still one of the most attractive counters on the Zimbabwe Stock Ex- change, owing to its strong fundamentals and market dominance in the telecommunications industry in the country. According to Mboweni: “More shares are traded in Econet than any other company and we are the main vehicle for foreign [buyers] investing in the country by way of the stock exchange.” He says share- holders in the company have received more than $190.5 million in dividends and share buy-backs.
A Good Deal for the Farmers
Zimbabwe’s agricultural sector was destroyed by a haphazard land reform that the country embarked upon in 1999. The agrarian reform displaced productive commercial farmers who supported the sector with their high yields. Before the produc- tivity falloff, the country also exported surplus produce to its neighbours in the Southern African Development Community region. Today, the unemployment rate hovers around 80 percent and the rural populace is mostly impoverished.
Technology products such as Eco- Farmer could help the farming sector get back on track. Most farmers in Zimbabwe operate against important-to-predict risks like changing weather patterns, which in the past four years have produced less and less rainfall. George Hove, an agricultural expert who specialises in agricultural technology and innovations, says that before EcoFarmer most farmers would not have had access to vital weather and climate information. But now, thanks to the cell phones in their hands, they have the chance to plan well ahead. “Innovation and technology platforms are needed in agriculture. They enhance productivity and create easy access to markets and information,” says Hove. Berean Muk- wende, vice president for the Zimbabwe Farmers’ Union (ZFU), agrees. “Almost all the farmers own mobile phones and with this new technology, information can reach a wider range of farmers, which will keep them equipped and informed,” he says.
Zimbabwean farmers are happy with the EcoFarmer platform. Agricultural producers have in the past lacked data on where to sell their crops at market price, which often forced them to accept low prices offered by middlemen, who then sold the produce to manufacturers and other buyers at a large mark-up. But perhaps the most exciting thing for the farmers is the simple guarantee in case of hardship that comes with EcoFarmer in-surance coverage. Says Masiyiwa: “Econet will pay the farmer cash if the crop has failed. The farmer buys the insurance for as little as 8 cents per day, spread over the season, which is deducted from the pre- paid phone account.”
As part of the EcoFarmer initiative, Econet has invested in high-tech weather stations, positioned at the company’s base stations across Zimbabwe. The stations are vital for collating local information about weather patterns; information that is also forwarded to the Zimbabwe Meteorological Service Department, which is said to be poorly equipped.
With Zimbabwe desperate to restore its breadbasket status in the region, Masiyiwa’s decision to invest in agriculture via EcoFarmer is seen as contributing significantly to the country’s bid to boost its economy.
