#AfricaNow #1: How tech is driving Africa’s growth
We recently hosted an event called Africa Now, with Google, at the OECD. The event saw the gathering of key opinion leaders from public institutions, investment funds, large corporates and tech startups with one common denominator: a vested interest in Africa, today. Over the next two weeks, we will share some of the best insights and practices that were shared throughout this half-day tech convention, to help you understand why all the facts are pointing to Africa as the world’s final tech frontier.
The event began with an introduction by Tidjane Deme, General Partner at Partech Africa. He contextualized the Africa tech investment narrative and shared his insights on the future of the continent and the role that the collaboration between corporates and startups will play in shaping it forever.
Let’s start with a number, $1.2 Billion. The amount that was invested in tech startups in Africa last year, more than double the year before. It’s clear that the growth is accelerating, but what are they doing to attract so much investment? I believe the answer is clear. They are going across all sectors and industries and using technology to drive transformative changes. African entrepreneurs are doing something at the core of African economies in all industries: retail, logistics, fintech, insurtech, edtech.
Let’s take Fintech for example. Particularly, Yoco, a South African startup that is driving the digitization of trillions of cash transactions in unbanked Africa. With the digitization of a cash economy, the government can put a handle on both money and its management. This, in turn, drives growth, increases the number of consumers and creates better access to basic services like insurance. Indeed, with only 4% of the African population insured, the potential of the market still needs to be seized, and startups like Reliance HMO that provide digital insurance in Nigeria have started to lead this opportunity.
What’s at stake in FinTech is also visible in other sectors, specifically FMCG retail. Africa is driven by millions of small and informal retailers who struggle with distribution and logistics. And as a consequence, huge international brands and FMCG companies face challenges to collaborate with these informal retailers and serve the market. But thanks to startups like TradeDepot, the game is changing. African SMEs finally have a route to market, the right products at the right time and access to an even bigger amount of consumers.
Startups are driving the growth in Africa but they need to find talents: there is a reservoir of young uneducated people and a large unmatched demand for skilled talent. We need to take the talent and train them for specific roles in society. How do you match skill and demand as well as deal with the vast lack of education? It’s difficult, but some startups like Gebeya and Edacy have set out to train talents to match corporate demands.
We need to build a foundation by working with startups to harness innovation, so we can continue this extraordinary transformation across the continent. It’s not just about working with startups and working with corporates on two ends of the spectrum, it’s about working together and collaborating. Traditional banks need and look for new FinTech actors just like FMCGs need local startups to help structure their logistics. If we continue this collaboration between the corporate world and new, exciting startups, the African landscape will be transformed forever.
We were lucky enough to welcome Minister Cina Lawson at our Africa Now event. The Minister of Posts, Digital Economy and Tech Innovation for Togo, sat down with Tidjane Deme to answer an important question: “How does tech contribute to the development of the continent?”
TD: From your perspective and experience, how can technology enable public service?
CL: It’s not about technology, it’s about service. One of the things you notice is that we are not good at serving people. In Togo, we are creating a digital ecosystem, giving people access to public information: all the procedures, addresses etc. for any type of needs. Enabled by technology, we deployed fibre infrastructure to connect all public buildings in Lomé, worked with all administration and put it online for all the population to access. These are the first steps in using technology to better serve citizens. We want to implement open data, we have a lot of data we want to be used and be accessible to the public. Additionally, we have the example of e-village, a low tech but high impact initiative. We gave phones to village chiefs to ask them questions once or twice a month. We want them to use their phone to give us information on what is important and we analyse this information to see the top priorities like water. Technology enables the flow of information from the people to the government and vice versa.
TD: Do you think technology can be used in government? How can it make it better operationally?
CL: The way to go is to partner with the private sector. In Togo, we have the number one port in West Africa, in order to remain number one, there is a great need to digitize port services. It’s about finding the right partner to deploy and serve this technology. The port interacts with lots of services in the public and private sector. We are going to extend the digitization of the whole economy through the digitization of the port.
TD: And what about working with startups?
CL: The way we would work with a startup would be with a partnership with a bigger company. If there is any issue with the technology etc. the risk would be huge for the government. There is safety in a larger company. We are also aware that experience is what you need as a startup, so we are building a tech hub, a governmental sandbox, and sponsoring it to build a special relationship with and contract startups on a pilot basis.
TD: What about education and the lack of it? How are you solving these problems?
CL: It’s true for Togo and for Africa. There aren’t enough teachers, we don’t have enough resources to train and educate our population. We need to find technology providers to help create a solution for this lack of teachers. We need projects that help with the digitization of education, how to become a better electrician etc. We wanted the students to have access to the best classes through being able to watch videos so we have implemented many educational tutorials. We are also ensuring that the teaching is relevant for where jobs are appearing in society, e.g. data scientists. Society is becoming very technical, so we need the right people to train our people.
TD: As a government, what is your role in facilitating the technological revolution?
CL: Create the legal and regulatory framework. It’s not a financing issue, it’s about finding and creating this framework. Making startups feel like they have an ecosystem to thrive in.
TD: Can you name one or two trends that you think will be really transformational for Africa and Togo?
CL: The use of technology within education. When you think about Africa, it’s all about young people and how we can better prepare them for what is to come. There is a push for the entire continent to act as one, we want to make sure that Africa is identified as interoperable. We see an Africa that is going to be one interoperable market, to better transact and implement mobility solutions etc. If we succeed in creating this free trade zone, we could be extremely developed in a few years time just due to the sheer size of the continent and population.
Check out our other wrap-ups of the #AfricaNow event:
- #AfricaNow #2: How to thrive in Africa, advice from Georges Desvaux and Marc Rennard;
- #AfricaNow #3: Tech, talent and social impact: hands-on feedback from the Africa continent.
- #AfricaNow #4: How Google is bringing Internet access to emerging markets
- #AfricaNow #5: The vital role of AI & tech in transforming Africa, with Moustapha Cissé
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