An innovative new technology is radically improving trading opportunities for small and medium-sized businesses in Africa, and elsewhere. Tradenet is a privately-operated market information system based in West Africa. It links to cellular networks to provide up-to-the-minute market information via SMS. Tradenet's innovator, Mark Davies, gave a presentation at IFAD on 21 February.

Market information is a key ingredient for small farmers striving to increase their incomes. For small producers trading in rural areas in Africa, the challenges are enormous. In the past they relied on governments to provide market information, but these public services have now been withdrawn. Agricultural markets are in disarray; badly organized and inefficient. Transaction chains are long, while the volumes of goods are often small and of varied quality, and prices are highly unstable.

Increasingly, the private sector is moving in to manage what was once a public service. Tradenet is one such enterprise. Although still in its infancy, it already covers 15 countries and 500 markets, and is available to users anywhere in the world. It offers a range of information that is key to producers, processors and others working along the supply chain: from updates about prices, harvests, transport, trading offers, disease outbreaks, weather and more. And it uses a new peer2peer technology that links this vast and growing database of market information to cellular networks.

“Tradenet aims to reflect market activity, not to reinvent it,” says Mark Davies. “It aims to empower small and medium producers, and provide them with the tools necessary to enhance their businesses.” Davies was one of the successful dot.com entrepreneurs who has since chosen to invest in West Africa, encouraging small businesses to take root and flourish.

His company offers valuable tools both for small producers, who can receive up-to-the-minute price alerts on their mobile phones, and for large-scale exporters, who can use available information to manage their supply chains. Davies cites the example of a large-scale fish farmer in Ghana who needs regular quantities of maize as fish feed:

"At present the Ghanaian market is too opaque to allow him to locate the maize he needs quickly, and in the right quantities. So he ends up buying from Argentina. In the future, with a comprehensive database of maize growers in Ghana at his fingertips, he will be able to buy from local producers and both he and they will benefit. Better still, he will be able to track the harvests and availability of maize in different locations as his needs dictate."

Communities linking up
At the moment Tradenet is being pioneered in market kiosks. Here trade agents offer market information advice, register people for the service, and configure alerts for other people’s phones.

Increasingly, Davies hopes, communities with common interests will come together to use the services on offer. These might be geographical communities or groups of transporters or producers. Associations and trade groups can sign up members and set up customized portals where they can quickly advertize goods and services, and broadcast timely and accurate updates on commodity prices to them via SMS.

This ability to link to the cellular networks is the key to Tradenet's potential success. Africa has a total population of 905 million. While only about 45 million have access to the internet, more than 540 million have mobile phone access, and the numbers are growing rapidly. Tradenet’s potential outreach is enormous.  

Tradenet and IFAD
Tradenet and IFAD are looking into ways of collaborating to help poor rural producers gain access to markets and improve their livelihoods. In particular, a number of roots and tubers projects operating through the Regional Cassava Processing and Marketing Initiative in Benin, Nigeria, Cameroon and Ghana, are looking at ways of working with Tradenet.

“The details regarding the real accessibility of the services provided, the costs – given that the information provided was traditionally given out for free – and the long-term sustainability of these services, are still being worked out,” says Andrea Serpagli of IFAD’s Western and Central Africa division.

“However, we are very interested in these innovative approaches that couple private management with a strong trade orientation.”

Future plans and challenges
Tradenet is currently expanding to Asia and South America, to cover a total of 25 countries. It will also broaden the range of information it offers; from weather feeds, information on transport, accounting and crop management, to crop and pest alerts.

Over the longer term, the market information that the system gathers generates a bigger picture of market trends, which can be used for trend analysis. For example, it can provide a map of commodity price variations over a year in a given locality.

Tradenet’s success depends on its ability to implement the system on the ground, and reach small rural producers in large numbers. This is not an easy task. Among the many challenges it faces are how to ensure transaction security, and how to guarantee its viability as a business by partnering with mobile operators. If these hurdles can be overcome, and its technology can be brought effectively to small rural producers, then the impact could be immense for businesses small and large.

"Providing market information services can make for far greater efficiency," says Davies "and can also be profitable, both as a business in its own right and for the small rural producers who use it."

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