Why We Invested: Ignitia
There’s a deceptive predictability about the weather in sub-Saharan Africa. Temperatures are consistently high across the year, and two basic seasons — rainy and dry — alternate over much of the region. Farmers prepare, crop and harvest their fields in tandem with the patterns historically developed by these two seasons. Yet, contrary to what we might expect from such seasonal “stability,” agriculture in sub-Saharan Africa isn’t producing predictably and consistently. In fact, production deficits in the region result in persistent food insecurity and significant expenditure on food imports annually.
Several factors account for the deficits, including poor inputs and a growing population but, one of the clearest is sub-Saharan Africa’s overwhelming reliance on smallholder agriculture that is almost entirely rain-fed. In the context of climate change, this means that even slight variabilities in seasonal rainfall have outsized consequences on agricultural productivity. Indeed, the region’s output from rain-fed agriculture is projected to reduce by up to 50 percent by 2020 as a result of climate change.
Studies show how climate change is impacting sub-Saharan Africa; the region has experienced frequent and intense climate extremes in the past few decades, with longer dry periods and more intense precipitation. Worse, the timing of the seasons has shifted, so that what was previously known to all farmers as the rainy season is no longer a given. Irrigation, one of the most effective solutions to weather uncertainty, covers just 7 percent of farmland in sub-Saharan Africa as smallholders simply cannot afford it. Smallholders who rely on knowing the weather to make key decisions in their every day — when to plant, when to apply fertilizer, when to harvest, when to hire casual labor, etc. — are struggling to secure the information they need to make these choices wisely as historical patterns of rainfall are replaced with greater uncertainty due to climate change.
Returning Weather Certainty to Farmers
In this scenario, the outlook for agriculture and food security in sub-Saharan Africa is undoubtedly bleak. This region is often just an unexpected dry spell or flood away from a food crisis. What it needs is a solution that returns certainty about the weather to farmers despite the impact of climate change. In short, a dependable forecasting tool. That’s why FINCA Ventures invested in Ignitia, a social enterprise that provides the most accurate, location-specific weather forecast for the tropics.
Ignitia has developed a proprietary forecasting model that is more than twice as reliable as traditional global methods. Typical tropical weather forecasting is only accurate 39 percent of the time. Ignitia’s forecasts are up to 84 percent accurate and are designed to be as easily accessible to farmers as possible. Subscribed farmers receive a daily text message that includes a 48-hour rain forecast as well as monthly and seasonal predictions. Because subscriptions are SMS-based, anybody with a basic feature phone can access the information. Forecasts are delivered in a consistent, clear and simple format that less-literate people can easily understand.
The combination of accuracy and accessibility is improving farmers’ day-to-day decision-making and, consequently, having a measurable impact on their productivity. A study ordered by Securing Water For Food and performed by a researcher at University of California Berkeley found that farmers using Ignitia’s service experienced massive improvements in yields per acre; they registered average yield increases of 65 percent and improved incomes by $480 on average as a result. That impact shouldn’t be surprising since weather forecast accuracy enables farmers to farm with less inputs and less wastage, as another study of Ignitia’s clients in Mali found.
Combining Affordability and Scalability
Subscription to Ignitia’s service is affordable; at the local equivalent of $0.04 a day, farmers are empowered with weather information that enables them to mitigate risk and make better farming decisions. An overwhelming majority of farmers value the product’s utility (98.6 percent) and impact on their yields (91.9 percent), according to the results of independent customer research. High satisfaction has resulted in strong customer retention, and the number of subscribers continues to grow impressively. To date, daily subscribers to Ignitia’s service exceed 900,000 in Ghana, Mali and Nigeria. Ignitia currently works with six mobile network operators (MNOs), giving them access to over 100 million subscribers and 50 percent of the mobile lines in the three countries. Some of these partner MNOs — Airtel, MTN, Orange — are also large international players that can be instrumental in Ignitia’s expansion into new markets.
Reflecting Quality and Opportunity for B2B Partners
Ignitia’s product would not exist were it not for a team of top-notch scientists and programmers, supported by colleagues with more than 30 years of combined experience growing and managing businesses in the developing world. The team spent a decade developing and perfecting Ignitia’s model. It includes CEO and co-founder Liisa Smits, who has a background in atmospheric physics and meteorology, and Chief Scientist Andreas Vallgren, PhD in Dynamic Physics as well as a graduate in space engineering and meteorology who served in several meteorological positions in tropical regions prior to Ignitia. The quality of the team is reflected in the uniqueness and success of the product.
A quality and highly scalable solution to a common problem in the developing world should interest financial service providers who want to be part of this agricultural transformation. Specifically, Ignitia’s service is a natural fit for microfinance providers like FINCA Impact Finance with a large farmer clientele. Better weather forecasting is a risk mitigation strategy for agricultural loans. If bundled with agricultural credit or crop insurance, Ignitia’s product has the potential to be a powerful value addition. Similar opportunities exist with farmer support organizations and agricultural input providers: Pairing extensions services, seeds or fertilizers with Ignitia’s forecasting product can maximize value for farmers.
In the meantime, we can all take comfort that come rain or shine, the forecast for farmers in sub-Saharan Africa shows blue skies ahead, thanks to Ignitia.