Last month we surveyed the business environment that makes Africa a force to be reckoned with in the global marketplace. One in three Africans are classified as middle class; real income has doubled throughout the continent since 2000; 11 of the top 20 fastest growing economies are located in Africa (seven of which are in the top ten worldwide). The shift from an agrarian economy towards manufacturing and service industries has transformed the landscape for the way business gets done for the 1.1 billion people living across the continent.
A decisive leader of the technology industry in Africa comes as a surprise to many — Rwanda. The country still has fresh scars from the civil war and resulting genocide that occurred during the mid-1990s, and yet has literally created a virtual economy that has caught the eye of foreign investors. Rather than develop a manufacturing economy and then delving into the hi-tech industry later on, Rwanda has adopted an aggressive plan known as Rwanda Vision 2020 that aims to build the country into an African information communication technology (ICT) hub to vault Rwanda into the middle class.
The Information Technology Authority of Rwanda recently completed a state of the art, nationwide 1,430-mile fiber-optic network. Rwanda is an avid participant in the One Laptop Per Child program, a US-based effort aimed at getting crucial computing technology into the hands of children in the developing world. So far Rwanda has distributed over 200,000 laptops to participating schools nationwide. The country is currently building the infrastructure needed to implement a cashless society by 2017, and already has an 80 percent inclusion rate.
“We understand the crucial role ICT plays in all sectors of the economy, including finance. This is why we have endeavored to promote a cashless economy by digitizing financial transactions,” said Claver Gatete, Rwandan Minister of Finance and Economic Planning. “Today the Government conducts its business electronically, including paying salaries. We have put in place policies that encourage payment digitization and continue to support the private sector, especially financial institutions to embrace the use of ICT to champion financial inclusion.”
Foreign investments are reaching all time highs as well, now that Rwandan companies such as Klabs (a collaborative ICT think tank for young students and graduates to meet, innovate, collaborate, and participate in workshops in order to bring their ideas into fruition) are beginning to crop up in cities across the country. Rwanda has been boasting eight percent growth rates annually, has reduced poverty rates by 12 percent, and closed the income gap considerably since committing to becoming the cutting-edge of the African technology industry.
Rwanda highlights the fact that telecommunication and information technology is one of the fastest growing sectors of Africa. Current mobile subscription data indicates that roughly eight out of every ten Africans own a phone (people in Kenya are four times more likely to have a mobile phone than have access to a toilet, according to a Global Sanitation report).
“As a continent, Africa requires a very significant commitment in terms of local offices and resources in order to build out a presence and logistical capabilities across so many countries,” said Simon Baker, program manager for mobile handsets at International Data Corporation’s Central Europe, Middle East and Africa offices.
Although throughout the Western world computing on the Internet is associated with PCs, laptops, or tablets, approximately ten percent of Internet usage is conducted via mobile devices (with mobile usage is trending upwards). People in Africa have been early adopters to using mobile technology to surf the net; mobile web usage rates are regularly between 40-50 percent in the countries of Sub-Saharan Africa.
“In the last decade we’ve seen a lot of transformation [in Africa],” said Solomon Assefa, an IBM researcher and vice president of Science and Technology in an interview with Tech Crunch. “There’s increased stability and a lot of bandwidth that’s come on line, tremendous economic growth, plus a lot of infrastructure being built and a lot of foreign investment.”
The telecommunications industry has exploded throughout the continent since the turn of the century. Between 2000-2010, mobile subscription growth rate was at 44 percent. Although the growth rate has slowed in recent years, the numbers are still impressive. Over the past five years unique mobile subscriptions increased 18 percent year over year, making it the fastest growing segment globally, according to a telecom industry report by GSMA, an international association of mobile providers.
According to the 2013 annual report on the mobile industry of Sub-Saharan Africa, the GSMA reported that the mobile industry contributed $60 billion in GDP to the region, which is predicted to rise to $119 billion by 2020. Also, the mobile industry was directly responsible for 3.3 million jobs and $20 billion in public funding (licensing, fees, etc). These figures are expected to double by 2020.
“Despite the significant impact of the mobile industry in Sub-Saharan Africa in recent years, even greater opportunities are ahead,” said Tom Philips GMSA Chief Regulatory Officer. “Beyond further growth for basic voice services, the region is starting to see an explosion in the uptake of mobile data.”
Almost 20 percent of mobile phones in the market are smartphones, with numbers projected to continue to increase exponentially. In Nigeria alone, its six million smartphone users are expected to increase nearly six-fold to 35 million subscribers by 2017. Now that smartphones are beginning to creep into the market, the technology is spurring further growth and development innovation in the development of novel uses.
“The mobile industry has already had a transformative effect on the social and economic life of Sub-Saharan Africa, but there is scope for far greater growth and innovation if the right conditions are established,” said Phillips. “In addressing key regulatory concerns, policy makers throughout the region have a major opportunity to unlock the potential of a dynamic and interconnected Africa.”
Mobile technology is not only about helping business, but securing the future for the individuals of Africa rather than monolithic corporate entities or shady government characters. The land of Big Game is metamorphosing into the land of Big Data and entrepreneurial app developers across the continent are integrating the technology ergonomically to meet the needs of the people:
In Senegal, fisherman use a mobile app to determine which ports they should bring their catches to in order to make the most profitable sales that day. In a similar vein, a team from UC Berkeley developed an app to help African fishermen combat overfishing, in which users can report the illegal vessels that encroach sovereign waters.
MobiPay is an app akin to a PayPal service, and was created in Kenya to help customers send and receive secure payments cross-continent — easily bypassing the inconveniences of distance and currency exchanges. “A subscriber in Kenya need only know the beneficiary’s Uganda telephone number to make a fast, secure cross-border payment, and we look forward to a rapid expansion in the number of active mobile remittance corridors between many African markets,” said founder and CEO Felix Musau when the platform was released in late 2012. The app also features business systems that can be used by farmers to develop equitable pricing for crops and to capitalize on processes that reduce overhead costs normally only seen by large urban corporations.
PollAfrique is a Ghana based data mining company that looks to harness information locked in remote corners of the continent in order to enlighten international and continental stakeholders about consumer preferences. The corporation undertakes all aspects of the data mining operation, from creating surveys, finding and screening the population for target respondents, and guaranteeing credible and secure answers are returned, in order to supply data driven analytics to corporations, NGOs, and research groups alike.
And the list of apps goes on: they diagnose and mitigate livestock disease and prevent tainted meat from getting to market in East Africa, or book bus tours or private cars in an Uber-esque fashion throughout Morocco, and can even help find appropriate home-furnishings in Kenya. The limited access to computers has actually made people in Africa early adopters of mobile technology. By utilizing the application platform, smartphone users in Africa can help it be at the vanguard of the technology industry for years to come — given the continent can find enough energy to supply the burgeoning electronic demand.
Next month, we will wrap up our series on Africa with a look at the energy sector of the continent, and how governments and corporations are tackling the unique problems posed by the geography of Africa.