The Final Frontier: IT Opportunities in Africa – Part 2
As a global outreach firm, Auerbach International is both a premier language agency and a world marketing consultancy (research, strategies, cultures and skills to penetrate overseas markets). This series on Africa presents unfamiliar markets to help you expand your business. Part 1 presented Non-IT Opportunities. Part 3 will present Challenges and Part 4 will present Success Strategies.
In a continent of over 30 million km2 and with a potential customer base of over 1.1 billion people, over 50% of Africa’s population is under 20 years old. Africa is home to over 100,000 millionaires and several billionaires, with a lot more people destined to be millionaires in the coming years.
INFORMATION TECHNOLOGY OPPORTUNITIES
The Economist in its May 2000 issue described Africa as the “hopeless continent”. Fast forward eleven years to December 2011. The Economist described the same continent as a “hopeful continent”. How time changes.
During this period, many factors have transformed Africa, among the most significant of which is communication. From digital to mobile, communication has grown in leaps and bounds across the continent. Internet connection has ballooned from about 4.5 million users in 2000 to over 167 million users in 2012. Mobile phones are even more prevalent with a penetration of about 80%. Close to 800 million Africans now have mobile phones and over 52 million are on Facebook. No wonder The Economist now uses the term “Africa Rising”.
From being a laggard in the mobile space, Africa has leapfrogged the world in many ways. The most obvious is mobile payments. And the most developed mobile payment system in the world is Kenya’s M-Pesa. This system allows users with a national ID card or passport to deposit, withdraw, and transfer money easily with a mobile device. M-Pesa has over 25 million users in East Africa, and the concept has been successfully replicated in other parts of the world such as Afghanistan and India. South Africa, Nigeria and Ghana are all in various stages of the mobile-payment revolution and within 15 years, the continent will be the world leader in this banking technology.
Beyond mobile payments, the continent is also riding the global craze for apps. Several African grown apps are emerging, targeting and solving problems such as poor access to quality education and infrastructural challenges. Some of the most innovative solutions are:
- Obami, a social media platform that lets people create or join learning communities. It marries the concept of social networking with e-learning, to bring about “social learning,” enabling educators and students to connect digitally, and share and access educational resources.
- Jumia, known to many as the “African Amazon,” offers cash-on-delivery in the populous Nigerian cities of Lagos and Abuja. Ordered online or via mobile phone, the products are delivered by motorcycle couriers to buyers’ homes or businesses where cash is then collected.
- iROKOtv. The Nigerian movie industry, Nollywood, is surpassed only by Hollywood (US) and Bollywood (India). iROKOtv brings Nollywood to the world via mobile apps and it is currently the world’s largest online distributor of African content.
Africa has also been busy cloning western applications, and customizing them to suit the African market. Some examples are:
- NikoHapa (“I am here” in Swahili). Foursquare’s African cousin is a social-location app allowing users to discover new locations and connect with friends. It also acts as a loyalty program by rewarding users who visit certain establishments often.
- mPawa, a sort of automated LinkedIn, matches employers with potential employees via skills and experience. It’s also SMS-based, which is ideal given that much of Africa is mobile.
- Kopo Kopo, a combination of Square and Intuit, enables small and medium enterprises (SMEs) to accept, process and manage mobile money payments (e.g. Safaricom, M-Pesa, and Airtel Money).
The African innovative spirit is constantly kept alive by an ever growing number of innovation hubs springing up across the continent from Kenya to South Africa. One notable innovation initiative is the recently-launched Startup Bus (http://africa.startupbus.com/), a 30-man, five-day bus ride from Harare in Zimbabwe to Cape Town in South Africa. The goal of Startup Bus is to launch several business start-ups by the time the passengers finish the journey.
Several innovative companies such as Microsoft, Google, IBM and HP have set up offices in Africa to ride this wave of technological innovation. Indeed, the world anticipates the next major wave of innovation will come out of “Africa Arising.”