By moving into high tech, Africa can break free from old industrial business models and accelerate economic growth. During the health crisis, digital has proven to be an essential tool for implementing resilient and inclusive solutions. Here is an insight from Rebecca Enonchong, CEO and Founder of AppsTech, Founder of ActivSpaces, Chairman of Afrilab and Founder of the Africa Technology Forum.
How is digital technology transforming economies on the African continent?
Rebecca Enonchong – Not all African countries are at the same stage when it comes to digital transformation. The most advanced countries are South Africa, Nigeria, Kenya and Ghana, which are all far ahead of French-speaking countries such as Senegal or Côte d’Ivoire.
In these countries, digital innovations serve very concrete needs, adapted to local realities. This includes delivery solutions for goods ordered online by people without a postal address, or enabling people without a bank account or credit card to carry out financial transactions. As such, mobile telephony has transformed the continent. In Africa, we are not mobile first, we are “mobile only”. Many digital services are designed exclusively for the mobile phone, like mobile money or social e-commerce on messaging platforms like WhatsApp.
What are the economic consequences of the current health crisis for African countries?
R.E. - They are not yet fully known. We are only just beginning to understand the scale of the pandemic in the numbers of people infected and deaths on the continent. Moreover, the lockdown measures, for the countries that imposed them, were not as extreme as in Europe and socio-economic activities were able to continue most of the time. By contrast, due to the slowdown in production and imports from Asia, Europe and North America, product stocks are dwindling. We’ll continue to feel the impact in the months to come. This global economic crisis will also affect jobs and exports.
In Africa, we are not mobile first, we are “mobile only”.
This crisis highlighted the importance of digital tools to ensure business continuity and deploy crisis management resources. Do you think it will accelerate digital development on the continent?
R.E. – Yes. Businesses and governments alike have understood that internet access is vital for everyone. Digital tools and social networks have proven particularly essential for staying in touch and continuing to communicate at a lower cost.
On a broader scale, governments play an essential role in supporting digital development and innovation on the continent through their policies. I am a member of i4policy, which has just published a set of recommendations addressed to decision-makers. Our manifesto includes proposals to encourage digital education, make it easier to start a business, set up funds to support innovation and encourage digital entrepreneurship through advantageous tax schemes… a range of measures that we believe will help Africa achieve digital transformation.
How does digital technology help drive socio-economic development?
R.E. – A recent study conducted by the World Bank shows how technology is transforming manufacturing and working conditions and how the latest developments are boosting growth and jobs. What’s more, digital promotes social inclusion among vulnerable populations. For example, mobile apps enable women assault victims to find support, farmers in rural areas to sell their produce directly to consumers and people with limited mobility to work from home... In Africa, digital technology is truly transforming lives.
How does it help in the development of sustainable and eco-friendly solutions?
R. E. – In the absence of traditional infrastructure, digital makes it possible to leapfrog old technologies altogether, for example in the energy sector, without having to make a significant initial investment. This means we can move straight to renewables such as solar energy or adopt connected devices to enable smart monitoring of energy consumption, intelligent waste management and water quality improvement. African start-ups are very proactive in these areas.
How do these start-ups get support and seed funding?
R.E. – First of all, we have to encourage greater African investment. Did you know that only 28% of start-up funding in Africa comes from Africa? What’s more, these start-ups are not always 100% African. This strong foreign investment creates an imbalance. That’s one of the reasons why we started the African Business Angels Network (ABAN) in 2015.
It’s an NGO that doesn’t invest but trains investors and promotes business angel networks in Africa. Among our flagship projects in 2020, I can cite Catalyst, launched in partnership with Afrilabs, a pan-African network made up of more than 150 innovation centres. Catalyst is a co-investment fund that matches the financial contribution of an ABAN member investor in a growing African company. We hope this initiative will help support the African funding ecosystem for start-ups right across the continent.