COVID-19 is SPEEDING up the digital economy in Africa

Introduction
When I postulated the digital economy in Africa in 2013 as a precursor to becoming a fulltime angel investor and subsequently writing about its KINGS in 2016, it never crossed my mind that in 2020 COVID-19 would be the SPEEDING agent. Who could have predicted COVID-19 except Bill Gates who alluded to a viral outbreak in his 2015 TED talk whiles George Bush and Barack Obama were more accurate in prospecting 2020 as the year? However, none of them envisaged the extent of this epidemic which has pretty much collapsed the capital markets and slowed down the economies of many countries with many of us at home – literally trying to survive the pandemic.

Policy action
African leaders took the major decision to declare a lockdown and, in some cases, daily curfews for fear of the virus spreading and overwhelming the (in some cases non-existent) healthcare systems. While those decisions have being contested in some cases on the basis that the informal sectors of our economies (that earn a daily wage) are going to suffer the most, the bright side of that decision is the need to go online while in self quarantine. The need to go online was helped by the rapid adoption of smart phones in Africa as a result of the reduction in price and supply of handsets some of which are being locally assembled and manufactured by the like of Mara Phones, etc.

Bandwidth
My friend Ben Roberts, Chief Technology and Information Office (CTIO) of Liquid Telecom asked in his article last week “Did corona just kickstart the digital economy in Africa?” – my answer is NO because the digital economy has been in Africa but YES, it is being speeded up in ways that no one would have thought off before. The premise of Ben’s article is the sudden growth in bandwidth that he can see on their network from March 15th, 2020 when these lockdowns came into effect. People are home so off course they would have to commute virtually and so suddenly they would have to purchase more bandwidth. This is helped by the reduction in bandwidth price as a result of the huge investments made by the fiber and satellite providers (FSPs), mobile network operators (MNOs) and internet service providers (ISPs) over the last decade. Some of these operators recently moved to uncapping the provision of broadband and in some cases removing the expiration of prepaid broadband purchase. With the benefit of hindsight, it would seem that the operators got the lockdown memo… – maybe Kenya greenlighting Google loom for 4G was it?

Digital Media
Around the world we’ve seen an overnight spike in Digital Media consumption, which offers a variety of opportunities in the African context. One of our portfolio companies, AMP Global Technologies, is leveraging an original interactive TV series, called The Mic: Africa, as a gateway to the internet for African youth. They are partnering with telcos and other brands to reward audiences by subsidizing discounted smart phones, zero-rating content, and offering data packages to the most active fans. With improved affordability of 4G mobile connectivity , young Africans can better access established platforms like Facebook, and Google, while also leveraging homegrown technology solutions to gain computer literacy, financial literacy, creative resources and critical public health information. In response to the crisis, the company has shifted the season finale of The Mic: Africa to make it a fundraiser for UN-designated public health organizations offering on-the-ground relief for the Covid-19 crisis.

Mobile Money
In late 2007/8 I was in Kenya working with some colleagues to launch The East African Marine System (TEAMS) when in December the election violence pushed us to the curb but like now one of the unintended consequences of that outbreak was the rapid adoption of Mpesa – a mobile money (MOMO) service that was introduced by Safaricom an MNO. Suddenly everyone in Kenya was transacting using Mpesa because not only was cash not available but mobility was restricted. Fast forward to COVID-19 in 2020 we are all on lockdown so access to cash is limited since mobility is restricted so guess what’s happening on the mobile operator’s networks – a surge in MOMO adoption and use.

Evidence
My personal experience happened yesterday, I needed to get some groceries from the convenience store in my neighborhood and for the first time I was able to pay with MOMO. Two years ago, the same store demanded that I go withdraw the money from a MOMO agent and come pay with cash for my groceries. While time may account for the change in mindset, coupled with the current situation where people have limited access to cash, the store has no choice than to accept MOMO. I noted in my exchanges with the store owner last night that they even take visa and master card on the point of sale (POS) they have installed – suddenly my local convenience store has gone digital and so is the case in other parts of the continent.

E-commerce
The next step for them is to get their inventory online so I can go online order and have them deliver it to my home (which in this case is walking distance) – that makes them a full fledge e-commerce business. Of course I recommended Hubtel to them to use for their online store because it is one of our portfolio companies and their demand is going through the roof due to COVID-19.

With bandwidth and digital payment sorted, lots of small businesses are going online enabling an escalation of e-commence in ways that were not envisaged before. Even though Jumia’s shares are plummeting with the hit taken by the capital markets, grocery delivery companies like Zulzi are experiencing an escalation of demand for their services to the extent that last week they employed one hundred new shoppers and delivery agents in South Africa. Companies like Sokowatch who just raised $14M and COPIA Global who raised $26M last year are all seeing demand on their network.

Online learning
On Tuesday March 17th 2020 Ghana’s Minister of Education announced at a press conference that students who are home can use online learning platforms like eCampus – a portfolio company – their traffic went through the roof. Since then the use of the platform has being on the rise necessitating a ramp up in resources and investment for a startup that has struggled to gain traction. Earlier in the year, we partnered with the African Business Centre for Developing Education (ABCDE) led by former Minister of Education, Dr. Ekwow Spio-Garbrah supported by Vivo Energy Ghana to commence a nationwide e-learning programme aimed at encouraging students in second cycle institutions to explore e-learning options to augment the traditional classroom and textbook learning. As if we knew COVID-19 would necessitate an adoption of our platform nationwide as is the case with other platforms worldwide.

Online Assessment
Nyaho Medical Centre the leading private hospital in Ghana (on whose board I serve) moved quickly to establish protocols to screen patients who visit the facility for COVID-19 so they can isolate, test and treat them before local transmission kicks in. While that has been very successful, the on-going fear has been the facility being overwhelmed by imported cases even if we could curb local transmission. Our two year partnership with Clear Space Labs to build Serenity – our digital health platform came in handy as our team launched the Serenity COVID-19 online self-assessment chatbot that allows one to take an assessment from home before proceeding to a medical facility if necessary. The uptake has been overwhelming and so is the momentum of the community of African entrepreneurs and technologist who are building a collaboration platform to Combat Covid-19 in Africa.

Is increased disruption a positive consequence?
This morning I jumped on a catch-up call with my friend and fellow investor Ravinder Sikand of Energy Access Ventures and we discussed some of the elements above and then we came to the crucial question “what do you think is going to change post the epidemic?” In addition to the increased digitization discussed above, he is of the view increased disruption of production would also pickup. This has been seen with the delivery of Personal Protective Equipment (PPE) as well as increased recognition for home grown innovation and cooperation. Some examples include, Kenyan university designed ventilator for local conditions or the Safe Hands program launched by a number of Kenyan corporates. To continue riding this wave, policy is needed to increase competitiveness coupled with more recent technology developments like 3D printing and distributed energy will impact the way we develop and implement outcomes that are less susceptible to supply chain shocks. The three trillion common market in Africa created by the African Continent Free Trade Agreement (AfCFTA) could not be more timely for the distribution of these disruptions.

13 Comments »

  1. Adjoa Kakra Kuwornu

    April 15, 2020 @ 8:31 am

    1

    Thank you very much for this insightful article Mr. Eric Osiakwan.

  2. An unintended consequence of the COVID19 lockdown in Africa | KICTANet Think Tank

    April 15, 2020 @ 9:38 am

    2

    […] blogs.harvard.edu […]

  3. Marsha Wulff

    April 18, 2020 @ 11:50 am

    3

    These are valuable perspectives, from a respected sector leader.

  4. Seraphine Kagali

    April 18, 2020 @ 1:24 pm

    4

    Eye opener. Nice read thank for this.

  5. Afia Appiah

    April 19, 2020 @ 5:32 am

    5

    Great insights. Do you have any data to show who is using the increased bandwidth? Any new users? Or increased usage by already existing customers? What are the users doing on the internet? Recreational or productive? Are you seeing increase in formerly digitally challenged populations like rural dwellers (outside lockdown zones) who have not necessarily been restricted in their mobility and access to services.

  6. Eric Osiakwan

    April 19, 2020 @ 9:40 am

    6

    Unfortunately, I do not have such data which may bother on privacy and that type of stuff but in this BBC interview https://www.bbc.co.uk/programmes/p088h2g5 one of my colleagues from The Gambia provides some response to your questions.

    None urban population centers show little to no spike in bandwidth consumption so yes there is some correlation between mobility and bandwidth spike.

    Eric here

  7. Noma Rangana

    April 19, 2020 @ 10:09 am

    7

    Very interesting and thought provoking piece.

    While the pandemic is tragic and unfortunate, it has allowed many companies, businesses, organizations and individuals to think outside the box. There has also been technical responses that benefit the working class, students and the poor notwithstanding some crooked companies that are trying to cash in.

  8. Winnie Obumba

    April 19, 2020 @ 12:44 pm

    8

    Great article, thank you.
    I had to adopt Online learning platforms and Zoom App myself to keep up with work and learning.

  9. Dr Hillar ADDO

    April 21, 2020 @ 4:22 pm

    9

    Great article!!
    Policy adoption and implementation are key for us to be abreast if not ahead of technology. No one knows tomorrow. In Ghana, we have all the policy position papers written nicely and available globally. This means, on paper Ghana seems ahead of Africa. On Ground I am not sure.
    How do our last mile projects look like? Hoping they are not lost miles

  10. COVID-19 is SPEEDING up the digital economy in Africa - ITEdgeNews.ng

    April 23, 2020 @ 5:07 am

    10

    […] Eric Osiakwan is Managing Partner of Chanzo Capital, an entrepreneur and investor with 15 years of ICT industry leadership across Africa and the world. He first published this in his Harvard blog. […]

  11. Grace Mahlomotja

    May 1, 2020 @ 6:59 am

    11

    Zoning In On Online Assessments

    Interesting article Eric, makes one reflect where we come from and where we are going as Africa in the digital space.

    Covid-19 has accelerated digital platforms and their usage with easy adaptation and home schooling in Urban Cities in Africa. However Rural usage of digital platforms worries me, that’s the dark side to Covid-19. Not everyone has a laptop to plug in & listen to an online class in rural areas during lockdown.

    How the ministry of education in each country handles this going forward can slow or accelerate education for rural children. It truly shows privilege even though you did not realise you have privilage . The true definition of “The Haves and The Have Not” is glaring, there is nowhere to hide.

    Education and digital learning in my view will be more commoditized in this Covid-19 new normal if particular attention is not provided to the less fortunate in society. Will data be zero-rated or discounted for schools (primary, highschool or tertiary)? The collective partnerships with govt, the telecom industry, teachers/lecturers and home schooling parents will reduce the privilege. We all need to play our part together going forward.

    VUCA times in the context of Covid-19.

  12. Africa CAN » Africa’s four MEGA TRENDS that are overcoming COVID19

    May 13, 2020 @ 1:09 pm

    12

    […] speed on the back of the virus – digitization. With the lockdowns in Africa many went online (in my previous post I alluded to how we are seeing this in our portfolio companies). Virtualized services are doing very well, while mobility businesses are struggling to keep up. […]

  13. Africa’s four MEGA TRENDS that are overcoming COVID19 - ITEdgeNews.ng

    May 15, 2020 @ 1:08 am

    13

    […] speed on the back of the virus – digitization. With the lockdowns in Africa many went online (in my previous post I alluded to how we are seeing this in our portfolio companies). Virtualized services are doing very well, while mobility businesses are struggling to keep up. […]

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