Africa on the verge of a tech boom

Philip Marais, CEO of business incubation centre LaunchLab, says mobile technology can be used to get relevant education and training material to young people. Photo: Supplied

By all accounts, Africa is on the verge of a tech boom akin to a latter day gold rush. Such is the enthusiasm that this year’s World Economic Forum (WEF) posed the question: “Is Africa leading the innovation revolution?”

The Wall Street Journal ventured that Africa might give rise to the next Mark Zuckerberg, referring to the founder of Facebook.

Much optimism stems from the explosion in cellphone use, which has made up for the dire lack of internet access on the continent. More than that, technology has become more profitable than traditional economic mainstays such as oil.

“Of all the regions in the world, mobile’s impact is greatest in Africa,” tech entrepreneur Eric MK Osiakwan wrote earlier this year on “Cellphone services account for more than 6% of the continent’s GDP, according to the GSM Association in its report, Sub-Saharan Africa Mobile Economy 2013.”

This has fuelled entrepreneurial zeal and spurred a wave of innovation, Osiakwan said. He also points out that over the past decade investments in the telecoms, media and technology sector in Africa made 19% annualised returns, compared to the African MSCI Index of 11% and the oil and gas sector of 6%.

Elsie Kanza, head of Africa for the World Economic Forum, agreed with WEF founder Professor Klaus Schwab that the global tech revolution would result in a transformation “unlike anything humankind has experienced before”.

“In no place is that more true than Africa, a continent that has yet to see all the benefits of previous industrial revolutions,” Kanza said in an article published ahead of the African leg of the WEF.

“And yet, with all of Africa’s unique resources – from its young and growing labour force to its largely untapped internal markets – this digital revolution offers unprecedented opportunities.”

Already this has manifested in 200 African innovation hubs, 3500 tech start-ups and investments worth $1billion across Africa.

“Mobile technology can be used to get relevant education and training material to young people so they can access personalised learning programmes to take them a step closer to purposeful work,” said Philip Marais, chief executive of Cape Town-based business incubation centre LaunchLab.

“At this point, government and industry (big business as well as the entrepreneurial ecosystem) need to step in. First, realistic assessments need to be done about what a region’s key strengths are to identify what sectors and industries should be focused on for development.

“Then government and industry need to collaborate around providing funding for infrastructure and manufacturing facilities that can be used to produce higher value products which can be exported within Africa and internationally.”

 History offers bitter lessons

It’s easy to see why observers are so upbeat about Africa’s prospects. But history offers some bitter lessons. Will Africa reap the benefits of this boom, or will the region’s intellectual resources go the way of its raw materials in the previous century?

African tech lovers swooned in August when Facebook’s Mark Zuckerberg declared that the future of the world would be built in Africa. On a visit to Nigeria, he touted Facebook’s efforts to connect communities without internet access to the web, through a project called FreeBasics.

Not so fast, say some wary observers. FreeBasics has been criticised for shoving Facebook down the throats of users. The programme allows access to a limited number of sites. The idea was rejected by rural Indians earlier this year. They felt that the internet should be neutral and that all people should be granted equal access to it.

Some were also offended by Facebook using the internet to gain a commercial foothold in the country, although the social media giant insists that its intentions are humanitarian. Facebook has rolled out FreeBasics in 30 countries, including Kenya and Iraq.

But all that’s academic, it could be said. For the moment, Africans are contending with a host of infrastructure problems, such as the fact that only 40% of the population has a reliable energy supply.

David Pilling, the Financial Times’s Africa editor, cautions against getting too caught up in the hype of the “Africa rising” narrative. As is often the case, the devil is in the detail – that is, in the numbers.

“A lot of the ‘growth’ comes through the simple addition of people. Stubbornly high fertility could deprive Africa of the demographic sweet spot, expanding workforce and low dependency ratios that propelled takeoff in several Asian countries,” he said.

“The transformational power of technology, too, can be exaggerated. Unless governments provide basic infrastructure, technology will be more of a scrappy fix than a productivity-enhancing miracle.”

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