ICT / Technology shines brightly on Africa
The ICT sun is shining brightly on Africa as sweeping changes driven by the telecom and digitisation boom make the growth in the region seem nothing short of remarkable. Interestingly, it’s not just a time for seeking potential business in Africa. Countries from the region, supported by National ICT agendas are also looking to make their mark outside.
There is no denying that the telecom boom, particularly the migration to 3G has set off a time of accelerated growth for Africa, and in the bargain given the supporting ecosystem an impetus for growth. While the market may have been characterised so far by a race to bottom to lower prices, today the spotlight is on driving value to customers.
Prolific telecom usage, the growth of 3G as a sustainable option to bridge the connectivity gap and digitisation from social media to CRM and mobile payment applications are making game worth watching.
Let the numbers do the talking
Let’s try to size up the opportunity here. According to a recent report from Booz & Co, there have been here have been three distinct growth phases of mobile penetration in Africa from 2000-2010. In the initial tentative growth phase (2000-2002), penetration rose from 2 percent to 6 percent, followed by a period of accelerated growth from 2003–2005 that saw a surge at a 52 percent annual rate with 21% penetration. From 2006–2010, penetration expanded to 51 percent, however growth decelerated slightly to a 26 percent annual rate. Even adjusting for non-addressable market, which can exclude 25 to 35 percent of the population, the report states that Africa’s growth has been nothing short of remarkable.
Another Wireless Intelligence: Dashboard, Africa 2012 report states that with over 700 million cellular connections across Africa in Q2 2012, the market is seeing a 19 % annual growth, 66% penetration.
Besides transforming access, the telecom boom has also paved the way for a burgeoning digital ecosystem that promises the build out of a strong software development and applications industry.
Build out of the software ecosystem
Of particular importance are countries like Kenya which are spearheading the software industry with the development of mobile payment solutions. Besides technology development, efforts are also being made to create a supporting environment for entrepreneurship development through initiatives like the iHub in Nairobi.
This synergy of efforts is clearly conducive to growth as my chat with Kamal Budha Datti, CEO of Craft Silicon reveals. Operating in over 40 countries across Africa, Craft Silicon today is a software development leader based in Kenya with over 300 developers on the home turf.
“The mobile space in Africa is booming and the movement which started with the operators is now spreading fast into the supporting applications industry,” Datti says. It’s no wonder that as a products company with a focus on the finance vertical, building on a portfolio of mobile payment solutions is being seen as the future.
Datti and his power team are putting their weight behind ELMA, Craft Silicon’s mobile commerce solution that is being built to enable consumers to link all accounts and loyalty programmes into one platform that allows them to benefit from a value added experience. While so far offering mobile payment solutions might have been in the domain of the telecom operators, companies like Craft Silicon are moving fast to transfer power directly into the hands of the consumer.
“If you are familiar with solutions like M-Pesa that were launched as a virtual wallet solution through an operator, you could consider EMLA as a logical extension. As a stand-alone consumer offering, the software will be available to consumers as a free download, which gives us the opportunity to monetise our investments through transactions that take place on the platform,” he explains.
The next stage will also see the company tap new markets including the Middle East and I believe that this is just the beginning of a new era of collaboration with Africa.
A platform for match making
While digital applications have offered African companies the potential to contribute to economic and social development, creating new models for ICT collaboration will be essential to future transformation. Supported by National ICT agendas, my opinion is that we will soon a significant increase in cross border buy-seller interactions. And GITEX TECHNOLOGY WEEK 2012, with its Africa focus certainly confirms that.
In a quick chat with the team that recently led the first delegation to Kenya, I find out that they are following up fast enough with road shows to Morocco, Tunisia and Algeria to raise government and industry level interest for collaboration. Last year alone, GITEX TECHNOLOGY WEEK 2011 saw a 20% increase in African visitors to the show.
Another interesting statistic came from GITEX’s Business match-making Portal – ConneXions that saw close to 13,000 meetings take place between international buyers and sellers through appointments made through the service. This year, there will be a renewed focus on enabling African visitors to benefit from this, further bolstered by the show’s International Zone, that has already pulled together over 40 country groups.
The end game, of course can only see what began as a movement to create in-country capabilities result in a mutually beneficial regional collaboration. So time to be ready when Africa comes calling.
Boosting National Agendas
ICT Agenda can boost National competitiveness and drive socio-economic impact. Here are five recommendations for policymakers to accelerate digitisation and maximise impact:
- Elevate digitisation on the national agenda: Ensure that national policy and senior government stewardship provide the platform for progress
- Evolve sector governance: Segregate regulatory and policy roles; clarify both ownership and accountability for ICT and digitisation
- Adopt an ecosystem philosophy: Address the convergence of telecommunications, media, and information technology; develop a strategy that addresses all stages of the value chain in a holistic way; and consider the local ecosystem as well as export opportunities
- Enable sustainable competition: Develop a competitive ICT model that stimulates both innovation and adoption, while ensuring sector sustainability and investments.
- Stimulate demand: Invest in boosting digitisation usage and service adoption; ensure that public services are available through e-channels
Source: Booz & Co