~ Archive for Personal ~

And now the EXITS courtesy of the Pandemic


As the third quarter comes to an end am going to give you a run down on EXITS – the big elephant in the Africa investing room. Yesterday, Autocheck announced the acquisition of Cheki Nigeria and Ghana from ROAM Africa. On 9th September 2020, US based blockchain investor, Digital Currency Group (DCG) bought Naspers-backed South African cryptocurrency exchange Luno and Transactions Capital took a $109M position in WeBuyCars also from South Africa. According to Bloomberg, WorldRemit acquired Sendwave for $500M on 25th August 2020. In late July, Network International, a Dubai-headquartered enabler of commerce bought Africa’s leading online commerce platform, DPO Group, for $288M. But it all started in January when Circles Gas acquired KopaGas’ proprietary technology for $25M. These are signs of the times – the EXITS are finally here. But it been a long time coming since 1999, when Mark Shuttleworth had the first exit of selling Thawte to Verisign for $575M. Since then, there have been spates of exits, like Visa’s acquisition of Fundamo for $110M, and others that have not being disclosed. The Covid-19 pandemic has not only catalyzed M&A activities, but now we are beginning to see a new wave of exits sweeping the industry and it is just the tip of the iceberg because:

1. The pandemic created a ripple effect from the dislocation of other sectors and asset classes whilst
2. The Application (tech) industry in Africa has come of age almost two decades later.

When Mobile was introduced in Africa in 1993 by Vodacom , it was least known to be a profitable venture. Then came the Internet Service Providers (ISPs) with Internet services in 1994 and then in 2004 the Mobile Network Operators (MNOs) ventured into providing Internet services on the mobile device. In 2001, Africa’s first submarine fiber cable SAT3 had been launched, but it was not until 2009 that multiple cables connected the continent to the rest of the world. The submarine cables brought high speed Internet connectivity to the mobile devices that had proliferated across the continent, making Africa not only a mobile-first but a mobile-web continent. Many African till today see the web primarily through their mobile device.

In 2014, Freshfields Bruckhaus Deringer conducted a study of the sector, looking at the performance of forty Telecom, Media and Technology (TMT) companies across eighteen stock markets in Africa over the decade and concluded that the TMT sector out-performed Oil and Gas, as well as the Africa MSCI Index as presented in the graph below.

This basically means if you invested in the stocks of any of these companies, you made 19%, which is more than three times what you made in Oil and Gas, so Freshfields concluded that the Africa tech sector was ready for a take-off. That take-off was the new companies building unique applications on top of the mobile web infrastructure that had been developed by the TMT sector. A decade later, we are now seeing M&A as well as exits in the sector one of which is the recent $1.4B IPO of Helios Towers.

But before the pandemic, Jumia’s IPO last year proved that the African market is the next big tech market. Jumia was started in Nigeria in 2012 (same year as Konga) and it took them almost a decade to go public. Which begs the questions, “who are the next prospects to go public?”. The leading suspect is Interswitch, founded in Nigeria in 2002, but they have been unlucky twice with going public. The third attempt is likely to be in 2021 and hopefully the gods of the capital market will eventually make peace with the Nigerian gods, due to the new world order the pandemic creates.

IrokoTV’s Jason Njoku has been forthright about his intentions of listing on the London Stock Exchange in 2021, but he has had to put this off due to the negative unintended consequence of the pandemic on his business. Why is that the case? It turned out that the salary cuts and layoffs across the job market meant that, though people were at home, they were cutting down on “entertainment costs,” since they could get some elements on free-to-air TV, so IrokoTV’s Average Revenue Per User (ARPU) did not only go down, but their subscriptions also dropped. Secondly, the sudden focus of Netflix on Africa meant there is more competition for those that can afford OTT services. These and other factors forced Jason on 28th August 2020 to announce a resizing of the business – essentially focusing on the US market, which has much higher ARPU. This is a short to medium term measure to shore up the revenues needed to go public hopefully in 2022, eleven years after IrokoTV’s founding. Even with the struggles Covid-19 has brought, all these companies coming out of Nigeria explain why the Information Communication Technology (ICT) sector contributed 17.83% to the country’s GDP in the second quarter of 2020.

Cellulant from Kenya is another prospect for an exit in this decade. Started by Ken Njoroge from Kenya and Bolaji Akinboro from Nigeria in 2004, Cellulant first raised a venture round of $1.5M from the TBL Mirror Fund in 2011. In 2014, they raised a $5.5B Series B from Velocity Capital Private Equity and then in 2018 they raised a series C of $47.5M from TPG. WeBuyCars is another prospect from South Africa, which got Johannesburg Stock Exchange (JSE) listed Transactions Capital to take a significant minority position this month which sets them on the path to an IPO. Other prospective candidates are Andela, MSF Africa, Jumo, Mkopa, Mall for Africa and Link Commerce which recently got an investment from DHL. From our own portfolio, Hubtel, which made $30M in revenue last year, is a candidate and HotelOnline — which became profitable during the pandemic and struck a relationship with Yanolja, the only traveltech unicorn in South Korea — is another.

An African unicorn in payments, Fawry, was started in Egypt in 2009 by Mohamed El Sayed Okasha and Ashraf Sabry. In 2015, a consortium bought 85% of the business, led by Helios Investment Partners with 40%, MENA Long Term Value Fund at 25%, and Egyptian American Enterprise Fund at 20%. The International Finance Corporation was left with 5% whiles the remaining 10% sat with the Founders and Management team. That investment was used to reinforce the company’s opportunities to diversify its activities and expand into the African continent and the UAE.

Within four years of that investment, Fawry grew significantly, processing about 600M transactions with a total value of 34.2B Egyptian pounds in 2018, making a core profit of 152M Egyptian pounds. Beginning of 2019, Fawry started the process of going public and raised $22M in IPO funding on 1st August 2019 – the first by an African company on the Egyptian Stock Exchange. After one year of being on the market, Fawry turned unicorn during the pandemic on 17th August 2020.

It’s co-founder Mohamed El Sayed Okasha left to start his own investment firm, DisrupTech Ventures with Dina H. Sherif, Malek Sultan as partners and Mohamed Aboulnaga as a Senior Advisor, in order to back the next generation of tech entrepreneurs. As more exits happen in Africa this decade, we will likely see repetitions of this phenomenon of prior founders being the next investors – establishing a new normal in Africa.

Africa’s health sector attracts more investments during the pandemic


My July op-ed focused on the increased M&A activities in Africa under Covid-19. Network International announced the acquisition of Africa’s leading online commerce platform, DPO for $288M on 28th July 2020, confirming my analysis that we are going to see more M&A activities going forward. “According to Keet van Zyl, Managing Partner of Knife Capital (which turned ten last week), who managed Mark Shuttleworth’s ‘Here Be Dragons’ Fund – this is likely the largest tech acquisition in Africa since Shuttleworth sold Thawte to Verisign for $575m in 1999“. SoftBank, which had a $16.5B loss in Q1, returned to a $12B net profit in Q2, courtesy of the merger and partial sale of its stake in Sprint to T-Mobile, as well as a recovery in its $100B vision fund portfolio. This means global M&A is also picking steam in the “valley of coronavirus” as Masayoshi Son put it.

Under COVID-19, healthcare investments in Africa have also surged due to the demand and prominence of the sector as a result of the pandemic. Healthcare investments are ascending also due to the numerous innovations around access, data, testing, therapeutics and vaccine in and around the continent. I will focus this op-ed on healthcare delivery and investment with three examples from Ghana, including Nyaho Medical Center on whose board I serve. The International Finance Corporation (IFC), the private sector arm of the WorldBank extended a $5.2M loan facility to the Nyaho Medical Center to augment their operations in Accra and to expand into other parts of Ghana. New Crystal Health Services (NCHS) also got a $2.5M loan from the IFC and an equity of 3M Euros from impact investment group, Investisseurs & Partenaires (I&P). Guidepost a diabetes telemedicine startup from South Africa received a joint investment from AlphaCode, the fintech investment of Rand Merchant Investment Holdings, and local investment fund Endeavor. Helium Health a Nigeria healthtech venture raised $10M in May to expand their services across Africa. That same month, Ghanaian healthtech company, mPharma raised $17M from the Commonwealth Development Corporation (CDC) and others. In April, another Nigerian healthtech venture, 54Gene raised $15M in their series A lead by Adjuvant Capital (which was seeded by the Bill and Melinda Gates Foundation), Novartis, IFC, Ingressive Capital and others. Before the virus hit, Consonance Investment Managers backed Lifestores, a tech enabled platform for pharmacies to provide access to healthcare for the last mile with a $1M investment in fresh capital to expand their operations in Nigeria.

The Ghana Infectious Disease Center (GIDC), a 100-bed infectious disease and treatment center, opened on 24th July 2020 after the Ghana Covid-19 Private Sector Fund invested to get it from scratch to finish within 3 months during the pandemic. The Ghana Covid-19 Private Sector Fund, a consortium of the private sector in Ghana has so far raised GHC42M out of their targeted GHC100M and have done three things with the funds;
1. Built the Ghana Infectious Disease Center within a record time of 3 months,
2. Donated PPEs to the Ghana Health Service and
3. Fed 150,000 people over a ten-day period.

mPharma, a data and cost management platform connecting Africans to affordable quality prescription drugs led by Gregory Rockson played a critical role in sourcing and distributing PPEs during the outbreak in Ghana. Between their series B of $12M and C of $17M that happened during the pandemic – they acquired Haltons, Kenya’s second biggest pharmacy chain for less than $5M thrusting them into a critical position in the Kenyan healthcare space. Since its launch, mPharma’s focus has been to make pharmaceuticals accessible and affordable so they became the go-to company during the pandemic, since they also help pharmaceutical companies to keep stock of their inventories. Over the years, the company has grown steadily (and through acquisitions) with operations in five countries supporting over 250 pharmacies with total funding of about $40M to date. One of the investors in mPharma is Golden Palm Investments Corporation (GPIC) based in Ghana who also owns Africa Health Holdings – an investor in Carepoint and Rabbito Clinics Limited. Rabbito Clinics opened two additional branches in Accra during COVID19 bringing their total number of hospitals in Ghana to 15.

The GIDC cements Ghana’s impeccable record of growing the healthcare delivery space for the last 50 years since Nyaho Medical Center was started in March 1970 by the late Dr. Kwami Nyaho Tamaklo. His vision was to give the best in nursing and medical care in Ghana and outside of its borders, as the first private medical establishment in the then independent Ghana. Nyaho was modelled after the world renown Mayo Clinic in the USA. In 2001 his wife Mrs. Janet Tamaklo took over the baton, moving the vision to second gear until her retirement in 2015. Vako Ferguson and Janis McKenna daughters of the founder were a critical part of the second gear in executive and non-executive roles at Nyaho. Meanwhile, their son, Elikem Tamaklo had been training in medical practice in the UK and as fate would have it returned to Ghana to build on the vision and execution of his family from 2015 till now. Elikem’s gear three has technology at the core of healthcare provision the Nyaho way. The Nyaho way is the corporate culture that has been handed down by the previous leadership and at the core of it is patient centered holistic care. Elikem’s vision of the future is using technology to drive patient-centered care holistically across Africa. That started with investment in the technology infrastructure both on the airport campus which is the hub of operations and the Octagon satellite facility in old downtown Accra – the first spoke. Additional spokes are planned for Tema, Kumasi and Takoradi using high-speed links to interconnect them so they can share information and transact in real-time with patients.

Nyaho already has a state-of-the-art Health Information System (HIS), so doctors use their computers to input and extract information when consulting with patients. This means every patient’s health information is electronic and stored in very secure servers that are backed up remotely. Nyaho has partnered with Clearspace Labs to build Serenity Health – an electronic medical records (EMR) system that currently enables, online COVID-19 assessment anywhere and then connects you to a medical facility, if necessary. It also enables virtual healthcare. This is the beginning of the next 50 years of the Nyaho way – with technology driving holistic patient-centered healthcare delivery across Africa.

This oped is in honor of my friend and investor colleague Christopher Yebuah of Casey Family Program who passed away in the line of duty and is being put to rest today – fare de well Bona —- from the Chanzo Capital team.

Africa’s Mergers and Acquisitions gain momentum during COVID19


On the 10th of July 2020, Helios Holdings Limited announced a merger with Fairfax Africa Holdings Corporation to form Helios Fairfax Partners Corporation – a pan Africa focused alternative investment manager. On the same day, Eversend, an African fintech startup also announced over a $1M raise through crowdfunding. Prior to that Helios announced a $100M investment from the Commonwealth Development Corporation (CDC) into their fund IV. On the 1st of July 2020, our portfolio company, HoltelOnline announced the acquisition of two travel tech companies. On 30th June 2020, MSF Africa announced the acquisition of fellow fintech Beyonic based in Tanzania. On 23rd June, 2020 Acumen announced their exit from KopaGas of Tanzania as part of the $25M acquisition by Circle Gas. Then on 22nd January 2020, Paga announced the acquisition of Apposit an Ethiopian software company as the entry strategy into the market. These recent deals have created undeniable momentum in mergers and acquisitions in Africa – with majority in tech — setting an unexpected tone for more positive developments in the second half of 2020 during this COVID crisis.

Whilst Covid19 has brought unimaginable devastation to the world and stoked racial revolt in America, which is now spilling over to Europe, in Africa, our fast adaptation to the new normal spared us not only mass casualties and pain, but the lockdowns triggered an unintended consequence of speeding up the digital economy. This resulted in investments in the second quarter like our portfolio company Zulzi closing $2.5M and AMP Global Technologies closing a $2M prior to COVID19 setting the stage for our Africa original content format and series launching this quarter @ www.takebackthemic.com. Then on 24th June 2020, Ingressive Capital closed their maiden $10M seed fund to invest in tech companies across Africa. On the same day, the Africa Venture Capital and Private Equity Association (AVCA) published their VC in Africa report for 2014 to 2019 showing a total of 613 deals totaling $3.9B with 2019 recording $1.4B of those transactions. Majority of those deals happened in South Africa, Kenya, Nigeria, Ghana and Egypt. South Africa, Kenya, Nigeria and Ghana are four of the KINGS countries (excluding Ivory Coast) that I had postulated back in 2013 would be leading the digital economy in Africa. Ivory Coast was replaced on the list by Egypt partly because of the civil war of 2011 that ousted incumbent president Gbagbo and set back the country’s development tremendously.

A lot of these deals were surely in the pipeline before COVID-19 but the fact that they still materialized is a function of resilience and the positive unintended consequence of the lockdowns across the continent. This momentum we are seeing in tech M&A is the result of the Capital, Capacity and Community building that has gone into the sector over the years which was accelerated by the COVID-19 lockdowns making online the new normal across Africa.

Off course some deals did not materialize, and we have seen some funds shut down due to the harsh environment. We have also seen African innovators launch innovations that are tackling the virus head-on and some of them could be big winners in the not too distant future. Some of these entrepreneurs have had to adapt and pivot under unusual conditions to launch these new ventures and also keep their boats sailing. The ingenuity of African entrepreneurs and tech ventures were put to great test under COVID-19 and some like HotelOnline a travel tech venture, which was severely impacted, pivoted towards a new business model. By the end of March, revenues had gone down to 20% and Endre Opdal the CEO was under intense pressure. His first move was to trim down the operations and staff which the board approved. The second step was evaluating the existing business to find the right pivot.

As investors and board members we rolled our sleeves and engaged with him to review things systematically – it was in that process that he came up with a new business line. The new line was always there in our blind spot but when necessity kicked in, we were able to spot it. We did not need to do any heavy lifting except to implement it right away with some minor tweaks. The new business line fetched $20K revenue in April increasing to $30K in May to make the business profitable again. This spoke to the speed of execution of the management team from loss-making in March to profitability in May. A second business line is now being implemented and yet to show results but a parallel process to make acquisitions of companies that were struggling under the crisis also gained momentum in April. On July 1st Hotelonline announced the acquisition of AfricaBookings and Cloud9two travel tech companies that were going under.

Cloud9 has had an existing working relationship with HotelOnline through our senior management team and that working relationship has been in place. They grew very fast and in 2019 merged with Heartbeat Venture. Cloud9 is one of the portfolio companies of the Mesozi Group whose other company is Marketforce which raised $350K from Viktoria Business Angel Network in May 2020. Whiles their Marketforce venture is doing well under the crisis Cloud9 got severely hit so instead of shutting it down they agreed to an acquisition which now gives them shares in Hotelonline. Africabookings was started by Bruce Tappings and had Kanak Puri as one of their investors who was also an investor in HotelOnline. In May, Endre saw that they were shutting down due to the crisis so he reached out and by the end of June they consummated another share swap that allows HotelOnline to leverage their existing customer base across Africa.

Whiles a lot of the current transactions have been in the pipeline prior to Covid, the acceleration to digital models has increased investment activity to support organic growth as well as expansion through acquisition and consolidation opportunities. This should continue to grow in H2 as existing portfolios are stabilized in the new normal. Suggesting that the continent’s resilience to the virus has far reaching implication on the business front. As the continent begins to re-open in the second half of the year, we are most likely going to see more of such deals that would propel Africa’s 21st century agenda.

Africa’s COVID19 platform for the new normal


President Obama’s chief of staff, Rahm Emanuel once said “you never want a serious crisis to go to waste. It provides the opportunity to do things that were not possible to do before”. When the COVID-19 crisis hit the global north the fear was that it would be most devastating in Africa with Bill Gates predicting that ten million lives would be wiped out by the virus. But he was wrong because African leaders did what was not possible before – they locked down their countries and instituted adherence to the protocols of social distancing and washing of hands. These preventive measures and the sudden change of behavior slowed down the virus’s serious impact in Africa. According to Harvard Health preventing the spread of the virus is rooted in behavioral change. Starting up new behavior in the new normal was what the US and Europe could not do but Africa was able to – in record time and so was Asia. Latin America is facing the consequence of not starting up the new normal.

After a successful digital industry response to COVID-19 project in South Africa, Andile Ngcaba requested an online meeting with a group of African technology entrepreneurs and software engineers to discuss the COVID-19 pandemic and its impact on the African continent. During this online meeting we discussed ways in which we could leverage technology to solve the pandemic across the continent. Andile muted that he is building of an Ubuntu driven Cloud Native Platform that will be host to African Tech Volunteers. The platform will showcase COVID-19 innovations by African entrepreneurs. After this meeting Andile got a group of software engineers together and began building Combat COVID-19 Africa. The platform allows for Africans to combat the pandemic through sharing, collaboration and resource allocation. We continued to have these meetings discussing different functions the platform should have and how it can be adopted all over the continent. The Cloud Native platform uses Kurbenetes as an orchestrator and Tensorflow for the Machine Learning Framework.

The CombatCovid19 Africa (CCA) startup was born through an open participatory process and was later described by the ATU Secretary General Mr. John OMO as a “platform of platforms”. Andile charged the team “we would be flying this aircraft whiles building it” and they launched unto it – working twenty hours a day from March 15th and by the end of April they had a Minimum Viable Product (MVP) for use. According to Andile “this is a cloud native platform built on Open Source principles and systems”. It is the birth of Africa’s indigenous knowledge and digital platform with cloud resources, virtual machines and deep learning frameworks. He has emphasized the need for a large open source community in Africa to help drive innovation around the continent. Today the platform is widely adopted with 44 countries and 263 cities on it so we would soon be showcasing Africa’s ingenuity and innovation – celebrating the entrepreneurs and engineers who made this possible in record time. It is an African platform built by African that has gone global virally with no markeing spend or advertising.

Some of the platforms running on the platform are; Covi-ID – a privacy-preserving, open-source platform that uses QR codes to share health credentials from South Africa. Existing track and trace solutions to fight COVID-19 depend critically on widespread adoption of smartphone usage, but 55% of users in Africa do not own a smartphone. Alternative methods to obtain geo-location data, including cell tower triangulation are imprecise and likely to be ineffective so QR codes are one way to go.
AfrikanCreate is a free online volunteer platform for African creatives to share ideas and collaborate on relief projects aimed at addressing COVID-19 challenges. These creative works by volunteers on the platform is used in campaigns to provide messages of hope to affected communities. Echoing messages of encouragement to the people that are working in the front lines of the pandemic. Of course, other people may not be as expressive but do want to share their creative perspective on what is happening around them, this is the platform for that, as long as it raises awareness or education about the pandemic to make the situation bearable.
OurEC is a food donation and volunteer platform for people living in the Eastern Cape of South Africa. The platform connects individuals who wish to donate food, medication and clothing with underprivileged communities around the province. It does this through what it describes as District Committees (DCs), who are groups of volunteers that represent the different districts in the province. Angolan entrepreneurs led by Julio Chilela of Angola Cables have designed an artificial intelligence application that helps the government track potential COVID-19 cases. They were able to predict close to 85% of new cases in Angola.

In the Democratic Republic of Congo (DRC) one of the solutions developed is www.stopcoronavirus.cd aimed at raising awareness about COVID-19 in the country. A second application developed by some of our platform volunteers from the DRC is a smartphone application called STOP Coronavirus that offers users tips on how to prevent the virus. In Botswana some of our volunteers were involved in helping build a COVID-19 dashboard for the government, they also built a digital platform for applying for movement permits in the country.

According to Andile, Africans are future proofing the continent from pandemics and other tougher challenges ahead. His vision of an open source driven Africa is clear when one looks at how this platform is actively enabling open source solutions. Another initiatives on the platform is Open Source Africa, a platform aimed at developing the open source ecosystem on the continent. This initiative will help with knowledge sharing, whilst also reducing costs for companies that wish to adopt open source around the continent. The open source initiative will also allow entrepreneurs deploying open source solutions to be more flexible and agile when developing. This initiative will lead to the increased use of OpenStack around the continent for cloud computing. Andile also believes that advocating for more open source projects around the continent will reduce the barriers to entry for young entrepreneurs looking to deploy solutions by using community version of open source technology online. Lastly, Andile believes that open source allows companies to attract more talent, this is because professionals in the technology space can see that is where the industry is headed, so they are embracing it.

Other startups have risen to the occasion, like the online COVID-19 self-assessment chatbot developed by the Nyaho Medical Centre in Ghana in collaboration with ClearSpace Labs on their Serenity health platform. It basically allows you to take a self-assessment at home and also get virtual care so that you only go the hospital if necessary – reducing the pressure on the limited medical facilities to take care of COVID-19 patients.

Given the numerous innovations we were seeing, on May 27th, 2020, Andile and I partnered with Teresa Clarke of www.africa.com to host the first Africa online pitch competition under the auspices of “Brilliant African Innovations Against COVID-19”. Through the Angel Fair Africa platform, Africa.com shortlisted six leading African innovations from the KINGS countries to pitch in a virtual environment. Laud Basing of Incas Diagnostics from Ghana who has built a rapid COVID-19 diagnostics kit won the first prize followed by a tie of Mary Mwangi from Data Integrated, Kenya who has built a passenger app for public transport to ensure social distancing, online ticket purchasing, etc. and Dr. Wale Adeosun from Wellvis, Nigeria who built a COVID-19 self-assessment platform with a link to patient care. The other three innovations in the competition were, AfrikanCreate by Aya Dlova from South Africa, Maisoin by Dede Tounkara from Cote d’Ivoire and Epione Health by Jessica Chivinge from South Africa.

All these platforms and applications are being built by young Africans who have taken to digital. It is important to emphasize that Africa has more digital native than any other continent or put differently Africa’s young people present the largest digital demographic dividend of the 21st century. Responding to Rahm Emanuel, they are not wasting the pandemic haven taken the opportunity to do things that were not possible before. Who would have thought that African entrepreneurs whom the odds were stuck against would be starting up the new normal? But as Nelson Mandela once said, “it always seems impossible until it is done”.

Africa’s four MEGA TRENDS that are overcoming COVID19


Africa appears to have narrowly escaped the level of devastation that COVID19 is wrecking in the global north with China as its entry. As if the virus followed the global supply chain to destroy it. The global supply chain links China to the global north before connecting to Africa so by the time the virus got here African leaders shut the boarders – that is the saving grace despite the doom’s day prophecies of Bill Gates. Africa got it right this time around without the help of the western saviors which begs George Ayittey’s famous quote “Africa is poor because she is not free”.

According to the IMF and WorldBank, Africa would experience her first recession in 25 years, but it would not be as severe as the global north. Her recovery in my view could be fast tracked by four MEGA TRENDS that are already in motion before COVID19 ever invaded the continent. The first of these trends has actually gained 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. Semi-mobilized businesses that qualify as essential services like food and grocery delivery are going strong. The World Economic Forum has said “Diverse sourcing and digitization will be the key to building stronger, smarter supply chains and ensuring a lasting recovery“.

Digital Innovation
Digital innovative ventures that are software-based (and, in some cases hardware-based) businesses leveraging mobile web technology to solve pain points, fix bottlenecks and address market gaps that make financial returns and, in some cases, impact. The huge investment in telecom infrastructure like submarine and terrestrial fiber cables, satellite stations and mobile/wireless networks all over the continent, has enabled the leveraging of these new technologies. The private sector has predominantly led these investments, while in some cases, public private partnerships (PPPs) have charted the course.

These innovations are permeating all sectors of the economy like financial services, education, agriculture, health and energy creating “new” sectors like Fintech, Edtech, Agtech, Healthtech and Cleantech just to mention a few which make up the digital economy.
• Fintechs are startups using mobile web and internet technology to disrupt the financial services industry, enabling and deepening financial inclusion with mobile money as the basis for electronic transactions like Zeepay, Finaccess, Hubtel, etc;
• Cleantechs are the fusion of off-grid renewable energy generation and mobile web tools which produce a “mobile-sun” disruption that drive means of supplying power like Mkopa Solar, SolarLight, Freedom Won etc;
• Edtechs are online platforms that make learning available, interactive and fun, breaking down traditional barriers and transforming education like eCampus, Eneza, Imano etc;
• Healthtechs are scaleups developing technologies that make access and delivery of health services available through teleconsulting and telemedicine technologies like CombatCovid-19 Africa, Serenity Health, Talamus, Helium Health etc; and
• Agtechs go beyond access to weather information and market prices provided by startups like Farmerline to those that disrupt and create value within the agriculture ecosystem like Complete Farmer, etc.
For a long time, Africa has arguably leapfrogged the west in terms of telecom infrastructure. Building on this, we can leapfrog our counterparts abroad in terms of business models that make both fiscal and impact returns. Hubtel is an example of such business that is profitable with demand going through the roof and Zulzi who just raised $2.6M in the midst of the pandemic have become a moment to treasure. Africa’s digitizing economy can make real the concept of People, Planet and Profit rising together interdependently. Below is a picture of global tech giants who have visited Africa because of the digital innovation – before the lockdown began, Jack Dorsey of Twitter said he planned to come live in Africa for three months in 2020.


Entrepreneurial Youth
These entrepreneurial ventures arise out of Africa’s youthful brain trust. Just a generation ago, starting a business in Africa was not the “in” thing, but we are now in the midst of a paradigm shift – it is cool to be a tech entrepreneur. This is the result of the world’s youngest population expressing itself through the availability of mobile web technology. Most of these young entrepreneurs believe in themselves and their ability to create the next Facebook or Google out of Africa. They argue that if Mark Zuckerberg and Bill Gates can do it without college degrees, they are no less. This phenomenon of self-discovery, identification with web technology and expression through entrepreneurship is powering the digital renaissance that is changing the narrative led by the youthful population of Africa.

Almost 60% of Africa’s population in 2019 is under the age of 25, making Africa the world’s youngest continent. According to the UN’s demographic projections, the median age in Africa is going to be 19.8 in 2020. And Africa’s population is going to double by 2050. The Mo Ibrahim Foundation titled their 2019 report “Africa’s first challenge in this regard is the youth bulge currently stuck in ‘waithood’. I come from the school of thought that whiles some are waiting, the others are busy building entrepreneurial ventures. In my view that is the only way out because those ventures would in turn hire the rest of the youth who are not entrepreneurial. Therefore, African policy makers need to wake up to the realization that they must create an environment that cultivates more entrepreneurial ventures. That would in turn solve the unemployment predicament we have on the continent. The way to solve unemployment is to enable new businesses that would scale by employing more hands. There is arguably no continent more entrepreneurial than Africa, where we have had to innovate solutions to overcome the export of our resources elsewhere. By making Africa a digital technology powerhouse, we will re-center our resources, and talent here, so that our tide of innovation can raise all boats.

Common Market
The common market came into effect last year when the 54 African states signed the protocol after many years of discussion – this could not be more timely. The IMF estimate puts the common market in Africa at four trillion dollars, so this is a big enough market for these entrepreneurial ventures according to the WEF. The first generation of these ventures have started scaling into multiple markets so are already leveraging the common market that has been created. These ventures are actually acting as the proof point for the common market phenomenon in Africa. As the continent opens up more and more, African multinational businesses would be created through intra-Africa trade and development.

The doubling of Africa’s population by 2050 would most likely double the four trillion dollar common market. This means that more global businesses would be coming into Africa to leverage the market. They would create jobs and add value to raw materials because labor is cheaper and available in Africa. The youthful population would be supplying that needed labor in all sectors — especially technology. This means that we need to be creating the educational opportunities that the youth need to enhance their skills. Guess what – that can now be done online. Harvard is offering fifty-seven free online courses during the pandemic. Many local and international educational institutions are moving their classrooms online, so distance is no longer a barrier to education. eCampus is experiencing exponential growth due to the demand.

Returning Diaspora
The phenomenal success of Ghana’s Year of Return initiative is a result of succeeding initiatives like Panafest, Joseph Project, etc., which were all aimed at getting people of African descent to return home. December 2019 was the climax of this movement which saw 1.5 million people of African descent from the US, Europe and Asia coming to Accra. Racial injustice in the US has led to movements like #BlackLivesMatter resulting in more and more African Americans relocating to Africa. Ghana has actually become the preferred destination because of — among other reasons — the setup of the Diaspora African Forum (DAF). DAF is recognized by the African Union and has worked with the Ghana government to secure citizenship for a lot of the returning diaspora.

Marcus Garvey in 1914 started pushing people of color to connect to their roots – he envisioned an African nation through the Universal Negro Improvement Association (UNIA). Garvey is known for saying “Our success educationally, industrially and politically is based upon the protection of a nation founded by ourselves. And the nation can be nowhere else but in Africa.” Bob Marley who was inspired by Garvey pushed the message in his songs. He personally came to Africa first to visit Ethiopia and Kenya then again in 1980 to visit Gabon by way of his love affair with Pascaline Bongo and then played at the Independence Day of Zimbabwe – paying his own way for the trip. Rita Marley later moved the entire Marley family to Ghana in 2000 making their abode in the mountains of Aburi overlooking Accra. W.E.B DuBois moved to Ghana in 1961 at the invitation of Kwame Nkrumah, where we lived until his death – that history resonates deeply with many African Americans seeking a society that embraces them, rather than treating them as second-class citizens.

Rabbi Kohain Halevi, owner of Mabel’s table guesthouse and restaurant, has lived in Ghana for 25 years. “I was 33 years old in 1987 when I fell in love with Ghana,” said Halevi, 65. “It took me seven years and 13 trips before I could finally move to Ghana and make this my home.” Dr. Marcus Manns moved to Ghana in June 2000 to start his chiropractic and wellness center which is now a successful business and in the process met his wife – they now live between Accra and the US with their five kids. Muhammida el-Muhajir says as an African American in the US, she felt she could ‘never win’ so she relocated to Ghana to setup her business WaxPrint Media which is thriving. Voltaire Xodus moved to Ghana without first visiting to launch his startup, WeUp, because according to him it is peaceful. His sister Ramona, who is a co-founder, has since joined him in Accra. 28-year-old Deijha Gordon left her family in Brooklyn, New York to start a food truck business in Ghana after visiting for the year of return. Ingrid LaFleur who ones run for the mayor of Detroit could not return after her “Year of Return” visit. She has gone on to launch The Afrofuture Strategies Institute (TASI) with a triangulated location in Accra, Kigali and Johannesburg. Derrick Ashong and Lucia Brawley, co-founders of Amp Global Technologies, moved from Los Angeles to Mauritius to launch The Mic: Africa, the first multi-platform TV format created in Africa to be exported around the world, all powered by their Take Back The Mic (TBTM) app.

In conclusion, COVID19 has generated an unintended consequence of speeding up the digital innovation in Africa led by the youthful population with the common market as their reach and the returning diaspora as the icing on the cake – welcome to the new normal.

COVID-19 is SPEEDING up the digital economy in Africa


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.

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.

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.

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.

Going from shortage to abundance – strategies to target Africa’s broadband consumers


2011 is the year that broadband will finally come into its own for Africa’s long-starved Internet users. Operators will need to have a complete mind-shift if they are to come out on top of the new market and it offers interesting opportunities for insurgent challengers. Russell Southwood looks at what operators will need to do to succeed in a changing market.

In almost every country connected to an international fibre connection in Africa in 2010, the speed of the connection increased and prices fell. Our own personal experiences from travelling extensively across the continent confirm what we know from the data that comes to us from other sources. Ookla’s latest Net Index statistics which shows which ISPs in South Africa give the best broadband speeds gives the clearest sense of this shift. According to the results from 184,442 Speedtest.net tests between 14 November 2010 and 13 December 2010, Cell C is the best service provider with an average download speed of 4.62 Mbps. Web Africa is second with 2.81 Mbps and Telkom third with 2.54 Mbps. Mybroadband.co.za has published a table with the top ISPs. To access it click here 2-4 mbps download speeds? Who would have believed that five years ago?

Almost as interestingly, Main One has been running a test site offering free, high capacity bandwidth in the Palms Shopping Mall in Lagos’ Lekki district which is operational until 9 January. According to a blog by Olunyi Ajao who went to try it:” I was more excited with the potential speed, than it being a freebie. You see, Main One is a submarine cable system that carries gigabytes of data from Europe to West Africa and so, I expected their connectivity (without going through MTN or another ISPs that use them) to be an extreme experience. In plain English, Main One is an ISP’s ISP. So, I went to the mall with very high expectations”.

“The speed met my expectations. I commenced downloading all the stuff I had always differed…. I was able to download content at a steady speed of 2 MB/s (with two other downloads in progress) on Main One’s wi-fi but the maximum (unsteady) speed I can get downloading via MTN’s 3.5G service is about 0.48 MB/s”.

“Just to be triple sure, I initiated a video call to a friend in Malaysia via Skype. Though we could not talk much due to the noise around me, he confirmed the video was very smooth. Youtube videos (including HD versions) streamed smoothly for me today”.

His main irritation?:”My Blackberry and (later) my Nokia 5800 XM could not detect MainOne’s wi-fi signal. Consequently, I could not experience the broadband on my smartphones. I was initially able to download some a podcast on the 5800 XM but that started failing after I upgraded the Operating System on the smartphone.The connection went off every hour or there about, and I had to always reconnect via my browser. I reckon this was their lame method of enforcing their “2 hour limit”.

Nevertheless, he concluded “the speed was worth the trouble”. And his not too startling conclusion?:”The ISPs necessarily need to invest in better last mile technologies or improve their existing networks so consumers can enjoy the real broadband that is possible via MainOne. I know of Mobitel‘s 4G and Swift‘s WiMax but both have limited coverage”. For the full blog click here

So now the moment has arrived for broadband Internet in Africa, all operators need to get focused on selling it to individual consumers. For if they don’t, there will be an awful lot of unsold international bandwidth on their balance sheets for years to come.

Currently, there are three broad types of operators who are in this market: firstly, Africa’s traditional independent ISPs who have lived largely on corporate subscribers and a small number of wealthy individual; the mobile operators who have come in and expanded the market with mobile Internet; and alternative insurgent challengers like Wananchi with its Zuku brand. The African consumer broadband market is still just being born so no-one has yet got a full grip on the market. Consumers are fickle and go where price and bandwidth seem most advantageous.

In the interests of creating a strong and vibrant African broadband consumer market, here are our seven tips on making this market work:

1. Be honest and straightforward

When it’s not price wars (which are easy to understand), Africa’s operators seem to offer a baffling array of different tactical marketing offers. Using the techniques pioneered in selling voice, mobile operators offer their customers short-term, tactical financial advantage. The result? Customers game the system about as thoroughly as consumers anywhere in the world. If it’s cheaper at 3pm in the morning, they’ll be awake and using it. Privately, most operators will admit that this is no way to change their market share but seem obsessed by the monthly percentage changes tactical marketing brings.

Operators have also sought to “slice-and-dice” the sale of their bandwidth capacity in so many different ways that it’s hard to know what you’re buying. How many Internet consumers know what a 4 Mb download capacity means? How do you know what you’re getting during a hour’s worth of Internet? What does unlimited subject to a “fair use” clause actually mean? Cyber-café and WiFi hot-spot operators continue to dilute bandwidth even though a great deal more is available at cheaper prices: old habits die hard. Take your profit while you can seems to be the unspoken mantra.

The operator that is consistently honest and straightforward has every chance of winning this game. If you say to your customers, you have two choices, price and bandwidth speed: which do you want? For those budget customers, set a much higher provisioning (2 mbps as a minimum) but clearly indicate that this speed may be considerably less during busy periods. For those who need higher speeds, charge more and give them a demonstrably better service (perhaps 8 mbps as a minimum). Set up bandwidth speed comparison tests internally first and then allow your customers to use them. Use the information gathered to drive out bottlenecks at the national and local level.

For the alternative insurgent challenger, there’s the perfect opportunity to arrive as “Honest John” amongst those who seem to speak less than straightforwardly. The challenger can be clear about what it’s offering and that it’s seeking to get all of its customers the best deal possible.

2. Service – Making things work

The mass broadband market in Africa needs to work on a “plug-and-play” basis. The household consumer needs to be able to open the box, plug in a limited number of cables and then follow the on-screen prompts to get things working. Household broadband needs to be cheap, well-supported and reliable equipment so that CPE costs are kept as low as possible.

When things do go wrong, companies need to have service back-up that can deal quickly and efficiently with complaints. Companies need to analyse where breakdowns and other complaints occur and figure out ways of dealing with them as quickly as possible. They need to encourage user forums where customers can compare notes and find ways of overcoming some of the issues themselves.

Two contradictory things are in play: firstly, in order to deliver the best broadband service at the cheapest price, it has to “get-up-and-go” at the cheapest possibly cost; secondly, consumers will become more demanding as speeds and performance increase. On the second, the absence of bandwidth suddenly seems like a “life-and-death” issue, not some minor irritation to be taken with the usual African patience when almost anything doesn’t work. So how to resolve these contradictory pressures? Educate users to pay for service contracts. At the bottom end, the amount charged will be very small but at the top end it will be much larger and contain time-based response clauses. Within this framework, be absolutely rigorous about providing friendly and response service.

3. Branding, character and use

When they took off, African mobile operators were selling aspiration. If you had a phone, you were somebody. Back then, it was all new but now there’s not an African city that doesn’t have billboards showing desirable young models smirking their way through conversations on mobile phones. With the introduction of mobile Internet, these same aspirational images have been simply transferred over. Can you tell the difference between the images used? OK, so the colours and the name are different but what else?

Africa’s broadband Internet brands desperately need some “character”, something that will mark them out and make their customers smile and remember them. They need to be able to convey a different version of the aspiration message. There won’t be necessarily the same level of Internet users so the aspiration message has to be more finely honed.

All the soft, aspirational branding constructs have to translate into “uses”. 99% of potential African broadband customers will not care about the technical attributes of the service, only what it can do for them. The young professional will want to put his social life together on Facebook. The parent will want to know that he or she can get education materials that will help their children in school. Grandmas will want to know how to access family photos on Flikr and use Skype to talk to their children. The taxi driver will want access to maps showing street locations, and so on. Too little broadband marketing translates into both selling these uses and identifying new uses to sell.

4. Encouraging maximum use by offering maximum capacity

The African operator that thinks it’s really smart starts by offering a broadband service at the highest price it can get away with and then slowly cascades the price down to a much level. The problem with this approach is that it fails to grasp that the overall market objective must be to create the largest possible “critical mass” of Internet users as quickly as possible.

Unlike voice, where everyone wants to have access, selling broadband Internet is a much harder sell. It relies on getting the mass of current users (the young, educated) to persuade others (the old, educated; staff like child-minders and drivers) to use it as a primary means of communication.

The strongest way to promote the largest “critical mass” is not by dealing it out in “penny packets” but by offering the maximum available capacity at prices that will encourage young and old to do the kind of things on the Internet that people do the world over: things like social media (Facebook, Facebook and Facebook), Twitter and You Tube are giving some idea of where things can go. If there were 1.7 million Nigerian Facebook users in August 2010, imagine how many more there will be in a year’s time.

5. Expanding the potential market

SMS is really just e-mail in budget clothes, the only difference is the character count and the ease of tee-ing up the browser. SMS-to-e-mail workarounds from companies like ForgetMeNot Africa show the potential for transition to full e-mail. And those that currently use SMS with some facility are all potentially on an upward escalator to a wider range of Internet services.

If you imagine the current handset market as a pyramid, the broad base of the pyramid is made up of extremely basic handsets with very little functionality. At the top of the pyramid is a tiny sharp point representing smartphones and the next band down is feature-rich phones. In most markets, these will be barely 5% of the overall market.

To expand the potential market, you need to expand the number of devices that can handle interesting Internet applications. You need to be offering ever-cheaper smartphones with the prize going to the first to offer one for US$50. You need to offer even cheaper feature-rich phones (with a i-Phone-style interface from someone like Snaptu) to the less well-off at below this price point. In this way, the existing basic phones in the market will shrink and the number of customers with Internet access will increase.

6. Building the device pyramid

The mobile is Africa’s tech device of choice and the one that reaches the maximum number of customers. But building an African broadband market requires operators to understand another pyramid.

This second pyramid is about all the tech devices an African broadband consumer might own. The broad base of this pyramid is composed of feature-rich phones, followed further up by smart-phones. Then there are net-books, followed by tablets (like iPad) and at the top of the pyramid lap-tops and PCs.

The challenge with this device ownership pyramid is the same as for the handset pyramid. Mobile phones that can access the Internet are a great thing but they have their limitations. Therefore how do you get all those people who might have access to a PC at work and/or have a feature rich phone to get some sort of wider PC usability? (The main barrier to greater use is size and use of keyboard functions but there are other issues.) Somewhere around the netbook/tablet area is a device that long-term may cost between US$75-100 that will broaden this part of the pyramid and give PC-like abilities to a much wider number of broadband users.

For the ambition must be to create a world in which there is the ability to do things using broadband almost wherever you are: the bar, the home, the hotel and the school.

7. Spreading everyday usage

The lesson of the success of Facebook is obvious in hindsight. The average African professional organizing his or her social life on a Friday afternoon is the “human equivalent of Facebook”. So the insight is really a very obvious one for operators. They need to introduce apps and services that drive everyday use. These might come from elsewhere but in time there will be local variants. In places like India and Brazil, the local variants stamped out their own ground by not being in English. Watch for local variants and see whether they can be marketed successfully to create new, local social media.

Think about the insights from something like M-Pesa, again so clear in hindsight but not when they were struggling to gain traction. It took something that was a major barrier (carrying and pay most things in cash) and challenged engrained habits. So look at other potential areas. What about finding your way round Africa’s cities? How many times have I witnessed the giving of directions that are of the “go past the third flower seller on the right” variety? Of course, there’s Google but how many people will use it? So somewhere between the “human Google” (phoning a friend or fellow taxi driver) and Google sits a much simpler app to help people find where they’re going.

Operators need to keep coming up with ways to weave the Internet into everyday use so that it becomes as natural as….well, picking up your mobile to make a call.

For more insights on the new Internet market, go to Balancing Act’s Web TV channel:click here

Clips include:

* Jessica Verrilli on Twitter’s African strategy.
* Sean d’Arcy, Opera Software on the use of its mobile browser in Africa.
* Reg Sawrt, Fundamo on M-Money Services
* Herman Heunis on social networking with MXit
* Jeremy George, COO, ForgetMeNot Africa on its SMS to e-mail service.

There are 49 clips in both English and French that contain news and information that does not appear in our e-letter or on our web site.

Broadband and Economic Growth in Africa



In the Ghanaian capital Accra, a government minister takes questions from citizens via Facebook. A journalist in Kenya uses his smart phone to e-mail breaking news instantly from a corporate press conference; the announcements move shares on the Nairobi Stock Exchange. Technology is rapidly changing Africa and at the forefront of the impact of that change is access to broadband Internet. Broadband would be to an economy in the 21st century what electricity was in the 19th century. Empirical evidence has established a correlation between broadband and gross domestic product (GDP) and the growth effects of telecommunications.

In 2009, the World Bank released its Information and Communications for Development report that showed access to broadband boosts economic growth in all countries, but most especially in developing ones. The study showed that in developing countries, for every 10 percentage points of broadband penetration, their economies grew by 1.38 percent. The report, conducted in 120 countries between 1980 to 2006, developed countries’ economies grew by 1.21 percent. Broadband access is key for economic growth and even more vital in developing countries.[1]. Africans are seizing the opportunity that it offers to move their economies forward.


Broadband is usually defined as any always-on, high-speed connection to the Internet, whether from a computer, television, cellphone or other mobile technology. The Organization for Economic Cooperation and Development (OECD) specifies a download speed of 256 kilobits per second or higher as constituting broadband. But recent studies have redefined broadband as an “ecosystem” that ranges from the networks, to the services the networks carry to the applications they deliver and the users.[2]

GDP Growth

Africa has sustained economic growth above 5 percent since the beginning of the 21st century with a peak in 2007 at 6.1percent. Growth declined slightly in 2008 and 2009 due to the global financial and economic crisis.[3]

Overall investment with private involvement represented an average 1.3 percent of Africa’s GDP between 2004 and 2007. In absolute terms, in 2004-2007 Africa attracted on average $11.5 billion, behind OECD and Central Asia with $19 billion and Latin America and the Caribbean with $13.3 billion, and slightly ahead of South Asia with $10.8 billion. East Asia and Pacific countries lagged behind with $5.3 billion.[4]

Telecommunications and GDP

McKinsey & Company estimates that “a 10 percent increase in broadband household penetration delivers a boost to a country’s GDP that ranges from 0.1 to 1.4 percent.”[5] Booz & Company also found out that “10 percent higher broadband penetration in a specific year is correlated to 1.5 percent greater labor productivity growth over the following five years.”[6]

Tunisia’s Ministry of Communication Technologies show that the ICT sector has grown by 17.8 percent in 2008. Its contribution to the country’s GDP reached 10 percent that year, against just 3.9 percent in 2001. The ministry projects growth will reach 13 percent by 2011.[7]

Source: IC4D 2009: Extending Reach and Making Impact

A World Bank report showed that between 1998 and 2008, mobile phone subscribers in Africa soared from two million voice users to 400 million with $56 billion in investment. A total of 65 percent of the African population gets mobile phone coverage, but that only covers 30 percent of the continent’s territory. And mobile phone companies make more money off African subscribers: average revenue per user is $12 each month, compared to $6 in India.[8]

There may be more people using mobile phones than have broadband access, but the table above shows broadband has a much stronger direct correlation to economic growth than access to a cellphone, landline or other Internet platforms. More broadband means faster economic growth.

Investing in broadband is an investment in economic growth and an indirect investment in development.[9] If broadband is made accessible and affordable, it would have a direct impact on health, education and standard of living; the three main indicators in the UNDP Human Development Index (HDI).

[1] http://web.si.umich.edu/tprc/papers/2005/450/L%20Waverman-%20Telecoms%20Growth%20in%20Dev.%20Countries.pdf

[2] World Bank, Building Broadband: Strategies and policies for the developing world

[3] AfDB, AU, UNECA, African Statistical Year Book 2009

[4] Telecommunications Investments with Private Participation (PPI) in Africa, World Bank PPI Database, 2007

[5] McKinsey & Company, Mobile broadband for the masses, February 2009

[6] Booz & Company, Digital Highways: The Role of Government In 21st-Century Infrastructure, 2009, p.5

[7] http://www.tunisiaonlinenews.com/2009/05/15/tunisia-ict-sector-contributes-10-of-countrys-gdp/

[8] World Bank, Opportunities and Challenges for Connecting Africa by Philippe Dongier

[9] http://ipcommunications.tmcnet.com/news/2009/06/17/4231817.htm

A HEROE worth his TIME


“A NATION that does not honour her HEROES, is not WORTH dying for” – the key words are “NATION, HEROES and WORTH”.

The NATION of Kenya honoured her HEROES and one of them is Brian Longwe, a GENERAL in his own RIGHT in the African ICT Fraternity.

Please join me in CONGRATULATING a Living Saint @ http://www.ictvillage.com/icthof_BrianLo…