Can Africa become the world's next Technology hotspot? Africa 2.0

Can Africa become the world’s next Technology hotspot?

                      Africa 2.0

Currently 1.2 billion persons call the continent home. From a global

perspective, the available labour supply has never been fully utilized

(due to a myriad of reasons beyond the scope of this article). Such a

premise has historically resulted in the migration of the region’s best

and brightest minds, to other places in pursuit of their professional

ambitions (ie the much discussed “brain drain”).

However, with modern technology now making it more possible for

anyone to work anywhere (even more so in a post pandemic context),

improving connectivity rates are now making it easier for companies

(both indigenous as well as foreign) to seriously consider expansion

plans into more places on the continent.

According to the website Interesting Engineering (a global digital

publication that highlights the latest developments in science,

technology, and engineering) – “Africa's technology industry is rapidly

growing. There has been a massive growth in tech hubs across the

continent, increasing by over 50% in the last several years.

This expansion of technology business in Africa is propped up by the

increase in computer engineering talent being trained there. Microsoft

alone is spending over$100 million dollars on a development center to

employ 500 employees in the next five years.

This trend of technological skills growth in Africa is poised to accelerate,

and as more talent becomes available, more companies will be looking

to invest.” (February 2020)

 As of early 2020, there were 643 tech hubs across the continent, with

the largest groupings being in Nigeria, Egypt, Kenya, and South Africa.

However, there's still a lot more room to grow, as 41% of the "tech

hubs" are incubator facilities, 24% are innovation hubs, and 14% are

accelerators ( Forbes Magazine).

INTRODUCING SILICON SAVANNAH

A 2016 World Economic Forum report noted, that most discussions on

the origins of Africa’s tech advancement point to Kenya. Between 2007

and 2010, four benchmarks were established to inspire the country’s

tech ecosystem( now referred to as “Silicon Savannah”)-: mobile money;

a globally recognized crowdsourcing app; Africa’s tech incubator model,

and a genuine government commitment to ICT policy.

In 2007, the Kenyan mobile network operator Safaricom launched

the M-Pesa mobile money product. It grew rapidly to become perhaps

Africa’s most recognized example of technological leapfrogging:

launching ordinary citizens with mobile phones right over bricks-and-

mortar banking into the digital economy (World Economic Forum).

Another Kenyan milestone was the government’s 2010 completion

of The East African Marine System (TEAMS) undersea fibre optic cable

project. TEAMS increased East African broadband and led to the

establishment of Kenya’s Information and Communication Technology

(ICT) Authority. As a result of this initiative, Kenya now boasts of having

one of the world’s fastest mobile internet speeds.

As of early 2021,“Silicon Savannah” is home to a tech industry worth

roughly $1 billion USD, with over 200 startups, as well as established

firms like IBM, Intel and Microsoft (Wired Magazine). They're working

to solve local problems through tech application. The company BRCK,

for instance, is connecting off-the-grid schools to the internet through

solar-powered routers and tablets. AB3D turns electronic waste into

affordable 3D printers that produce artificial limbs (Interesting

Engineering).

However, if Kenya’s key decision makers have their way, the epicenter

of Silicon Savannah would be the Konza Technopolis, a proposed

“smart city.” This new city will span 5000 acres, and is in the early

stages of construction 40 miles south of Nairobi. The long term aim is to

attract companies involved in Business Process Outsourcing; Software

Development; Data Centres, Disaster Recovery Centres, Call Centres and

Light Assembly Manufacturing industries. There are also plans to build a

university campus focused on Research and Technology, as well as

hotels, residential areas, schools and hospitals. It is also intended to

include a science park, a convention centre, shopping malls, hotels,

international schools, and a health facility. Konza Technopolis is

projected to cost $14.5 billion USD and should be completed in the early

2030s (BBC News).

As impressive as Kenya’s Silicon Savannah is, it is only one facet (albeit a

large one) of Africa’s continued emergence as a global technology hub.

Increasingly, Nigeria is also becoming a key destination for big tech

investment and commercially oriented start-ups (World Economic

Forum). As to be expected, investors and entrepreneurs are attracted by

the prospect of scaling applications to Africa’s largest population and

economy (An examination of Nigeria’s economic potential through to

mid century, was discussed in a previous article by this author). Many

such investors/entrepreneurs have established a presence in Lagos’s

Yaba district. Located there are the headquarters for the e-commerce

start-up Africa Internet Group and digital payments venture Pagar,

which are not too far from the incubators Andela and Co-Creation Hub.

In reference to this phenomenon the World Economic Forum has the

following observation-:

“Nigeria’s tech sector is becoming representative of repatriate

entrepreneurs reversing some of Africa’s brain drain and IT, and in so

doing reshaping the continent’s global linkages.

All three of Africa’s most recognized e-commerce startups – Jumia,

Konga and MallforAfrica – were founded by Nigerians who earned their

university degrees and initial private sector experience in the US. A

noteworthy portion of the roughly $600 million in VC to these entities

comes from American and European investment firms. And the

management of Jumia’s parent, Africa Internet Group, is a mix of

repatriate Africans and MBA types from the US and Europe attracted to

the continent’s IT opportunities over development work.”

South Africa is also home to one of the largest ICT markets in Africa, with

leadership positions in the subsectors of mobile software, security

software, and electronic banking services (This will be examined in

further detail in the next article of this series, which will focus on

investment opportunities in South Africa).

As though all of these intriguing developments weren’t enough, in 2019

the Rwanda based Mara Group launched the first-ever “Made in

Africa” smartphone. The Mara X has 16GB (US$ 130) of storage, while

the more advanced Mara Z has 32GB (US$ 190). Each phone is

comprised of over 1000 subcomponents, all of which were produced on

the continent itself. As such, Rwanda is now home to Africa’s first

smartphone manufacturer, with the Mara Group producing up to 10,000

phones a day (World economic Forum).

From Silicon Savannah in the easternmost part of Africa, to Nigeria’s

Yaba district in the western portion, to South Africa’s burgeoning ICT

program, the favourable economic developments taking place across the

continent since the early 2000s (as discussed in the first article of this

series), has left Africa uniquely positioned to benefit from the ongoing

“Digital Revolution.” This is mainly due to its young, growing and

increasingly educated population; its vast resource base; significant

growth potential, and the early effects of a “reverse brain drain.” All of

these being strong indicators of the continent’s possibility of becoming

the next global hub of technological innovation

As such, sophisticated investors from anywhere in the world (particularly

those with special interest in the technology space) should find ample

opportunity to participate on the continent in this arena.

Sean Valley Msc

Co Founder/ Director of Business Development

Lanniup Consulting

Lanniup Consulting is a company based in Port of Spain, Trinidad

&Tobago. It was established in 2013 by Dr. Oritsetimeyin (Oti) Esimaje

and Sean Valley.

 Our primary mandate is to source and subsequently develop avenues

by which West Africa, the Wider Caribbean Basin and, subsequently the

Americas can develop greater economic and trade relations with each

other during the first decades of the 21st century. The end goal is the

development of a free flowing trade corridor among said regions.