By Strive Masiyiwa*
Talking with young entrepreneurs from Abuja to Dar-es-Salaam, I’ve become ever more convinced that Africa can compete with any region in the world in terms of the imagination, ingenuity and energy needed to invent successful and purposeful businesses for the digital age.
Indeed, if you’re sitting in Johannesburg, Lagos or Nairobi, the current epicentres when it comes to attracting start-up investment, it can feel like the good times are here. Tech hubs and accelerators are proliferating. Global interest, particularly in our fintech companies, is high, with mobile payments, remittances and lending platforms seeing a flurry of investment.
However, outside of these hubs, the innovation story can be decidedly less vibrant. Africa still lags far behind other regions when it comes to the investment flowing into our new tech-based enterprises. While venture funding for African startups jumped more than 50 per cent last year to a record high of US$560 million, it is still not even one per cent of the amount invested globally.
The fact is the kind of inclusive growth and development our continent needs will not just happen if we carry on with business as usual. Technology is going to drive rapid and radical change across the continent over the coming five years and beyond but its ultimate impact on the lives of citizens, especially the poorest and the excluded, will only be as good as the systems we put in place to manage it.
Forging these ecosystems is not a job for governments or businesses alone; it demands a national conversation that draws in citizens as well, especially our younger digital doyens. Too often, debates on the impact of tech on societies are driven by, and focused on, rich countries offering little voice or guidance for developing countries. The end result can be policy paralysis.
At the Pathways for Prosperity Commission, which I am co-chairing, along with Melinda Gates and Indonesia’s Finance Minister Sri Mulyani Indrawati, we are working to provide countries with positive ideas and practical tools to help them ride this unparalleled wave of disruption and opportunity.
The Commission’s initial research suggests a range of new tech-enabled pathways to prosperity that developing countries could actively be pursuing. These include one focused on raising value from agriculture – using advances in data analytics, biotechnology and communications to improve farm yields and logistics.
Agriculture really is one of the key frontiers for African entrepreneurs. We’re seeing an exciting range of ‘precision agriculture’ apps being pioneered from South Africa, to Kenya, Ghana and Nigeria; but there is scope for so much more. If we do not #Re-imagineRural, we will just end up with ever-growing urban slums and despair amongst the youth who have fled to the cities seeking non-existent jobs.
And although the most recent manufacturing boom has largely bypassed Africa in favour of Asia, that doesn’t mean, with the right strategies, African countries can’t capitalize on, say, a new global trade in services that could be unleashed by virtual communications. There is also growing potential to move away from dependence on exports altogether, to create more connected and diverse domestic economies, as digital platforms and advances in logistics and supply chain management drive growth by cutting the cost of moving goods.
Whichever pathway they favour, African countries – by which I mean governments, businesses and citizens – need to move quickly to harness the opportunities. Of course, we need the basic building blocks of peace and stability, sensible macroeconomic policies, good governance and the rule of law. But beyond this, countries need to: 1) ensure they are ‘digital ready’ with the right kinds of ‘hard’ and ‘soft’ infrastructure and human skills, 2) foster innovation, through careful regulation and tax policies among other things, and 3) actively support the kinds of business models that will benefit the poorest and most marginalized in society.
An example of where governments and businesses could be working together is in the provision of ‘soft’ infrastructure such as open access ‘microservices’ to entrepreneurs. India is leading the way in this field via its IndiaStack platform that allows start-ups to incorporate digital services such as identity authentication, route planning or payments processing into their products free of charge. This dramatically cuts the cost of creating a digital service from scratch.
If we seize the day, the possibilities opening up right now through digital communications, artificial intelligence, enhanced data management and other technologies are limitless.
The success of mobile money in East Africa shows what can happen when authorities take an enlightened approach, in this case to regulation. In spite of stiff opposition from the banks, Kenyan and Tanzanian regulators took a ‘wait and see’ approach to mobile operators getting involved in banking. The result was a revolution in access to life changing financial services for millions of people, especially low-income rural women.
While I am continually looking for ideas and inspiration from India, China and other parts of the world, I am proud of our homegrown innovators. Let’s accelerate the national conversations around how we can better support them, using new evidence and ideas coming from the Pathways Commission and others. Responding to technological change requires vision, purpose and strategy. If we can truly unleash Africa’s entrepreneurial spirit, we can lead the world in pioneering tech-fueled inclusive growth.
*Strive Masyiiwa is Founder and Executive Chairman of Econet Group and Co-chair of the Pathways for Prosperity Commission on Technology and Inclusive Development.