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16
Sat, Dec

African potential goes beyond mobile money

Every couple of years, I try to get to the GSMA’s Mobile 360 Africa event. Without wanting to sound like a cheerleader for the organisation, I find it is a good way to discover what has been happening in a market so very different from those where I can normally be found.

Unsurprisingly, there was much cheerleading about the incredible success of mobile in Africa, in its role connecting the unconnected and with mobile money platforms providing a means with which to bank the unbanked.

Of course there is much still to be done with connecting more of the continent a real challenge due to the massive geographies, dispersed populations, and low income levels of subscribers, but this is something which needs to be considered in order to minimise the digital divide (it is a long-standing irony that those who could most benefit from connectivity are the hardest to reach).

However, for all the big numbers trumpeted across the keynotes, it was often the smaller stories which stood out. There were many reminders that by providing connectivity and a mobile finance platform, the mobile industry is enabling a solid infrastructure on which a promising future can be built.

Comments from Econet founder Strive Masiyiwa (pictured, left), for example: “The greatest challenge that this continent faces is the creation of jobs. We have to create jobs.Five hundred people, mostly from this continent, drowned last week trying to cross the Mediterranean Sea. It’s happening every week. Looking for a job. It is an indictment against us.”

Digital services

There is something important about the solutions to a continent’s problems coming from within. While international projects are – and will remain – particularly important around infrastructure projects, as far as mobile goes, what can be delivered using that infrastructure gives the scope for home-grown innovation.

On the agenda were presentations from SafeMotos, a Rwanda-headquartered company which uses data from sensors on cheap Android smartphones to detect “risky road behaviour” from motorcycle taxi riders. While motorcycle taxis are fast, convenient and cheap, “drivers do not have an economic incentive for driving safely,” Peter Kariuki, co-founder, said.

With the company seeing a 6 per cent week-on-week increase in rides, it is looking to raise cash and find partners “to help us scale beyond Kigali”.
“We would like to be able to do in a month what it takes our team a year with our access to capital and the current team,” Kariuki said.

Another company on stage was Twiga Foods, a business-to-business player enabling vendors to order stock to be delivered to their stores “with a low-cost, better-quality product than informal markets can provide”. Caine Wanjau, CTO (pictured, right), said the company has “digitised the whole value chain” being driven by apps, and 95 per cent of payments are by mobile money – with regulatory restrictions accounting for the other five per cent.

Unique challenges

Of course, what Africa really lacks so far – beyond mobile money – are digital success stories. It is probably due to the relative immaturity of the market that to date high profile successes are few and far between, but the continent also faces challenges that are not so evident, including affordability of technology and digital literacy.

Languages are also a factor, with a massive variety of dialects spoken even within one country, let alone across international borders. But while this can provide challenges when it comes to reaching scale, it also presents a barrier to entry for potential overseas rivals, and may prove crucial to bringing more people online.
As Mohamed Dabbour, EVP, Africa, at Millicom (pictured, left), said: “They come online because there is something relevant to them”.
Masiyiwa’s chosen examples of success were also interesting, although it is not clear how much of this was by design in what was an informal, conversational setting: “There will be African Alibabas. There will be African Tencents and Facebooks,” he said.
By choosing Alibaba and Tencent, he highlighted companies which don’t hail from the US or Europe, and which have built their success on the peculiarities of their home market, China. Could the path to large-scale success in Africa be based on adapting international models to local markets, which have been largely ignored by international players due to issues such as language and a complex regulatory landscape?

Operator innovation

Of course, the Mobile 360 Africa audience was heavy on operators from the continent, who would also be wise to look at international markets where so-called “over-the-top” players have taken the juicy parts of the value chain.

Certainly in Africa operators are already in a stronger position due to their role in financial services, but it would certainly be wise for them to look at how they can support entrepreneurs. The region also does not have a Silicon Valley-esque community of financial backers, and access to finance is not easy for those without access to formal banking – something GSMA is helping to address through its Ecosystem Accelerator Innovation Fund.

Econet’s Masiyiwa took an honest view when asked about Africa’s role in the “Fourth Industrial Revolution”. Not to lead, but “what we should be focused on right now is being part of it”.

Certainly challenges remain, and there are a lot of difficult problems to overcome, but there are also some incredibly positive signs. I just wish I could invest in the African Alibaba. — MobileWorld/GB