Over the last decade, Africa has shown repeatedly, sparks of technological brilliance that could be fanned and fuelled into widespread flames of innovation and smart technologies for its economic development.
There is the Kenyan mobile money service, M-Pesa that enables financial transactions via SMS and without the aid of the Internet. The service has become a global leader in the mobile payments industry and greatly increased financial inclusion in the country, enabling underbanked and remote villages to access banking services with the most basic mobile phone devices.
Since Safaricom launched M-Pesa under UK-based Vodaphone’s managerial responsibility in 2007, Kenya’s financial inclusion levels have almost trippled from 25 percent to 67 percent (2014). A success story with far less credit given to the kenyan government for facilitating an enabling regulatory environment for non-banking companies to operate as digital financial service providers. The government also permitted Mobile Network Operators to license agents, to perform basic banking services such as registration of customers, opening new accounts, accepting cash deposits and withdrawals, etc.
To the west of the continent, in Lagos, a start-up incubator Co-creation Hub, with support from global tech giants including Google, Microsoft and Omidyar Network, is facilitating the deployment of smart technology for social and economic advancement. Cc-Hub trains kids on software languages and robotics, and develops ideas into highly impacting technology companies. WeCyclers and BudgIT are two of its products.
WeCyclers is an award-winning recycling company that is revolutionizing city waste management by building a cash reward-based refuse and data collection system. BudgIT launched as a public budget analysis and communications start-up intended to compel Nigerian government to imbibe the culture of financial transparency and accountability. Within 3 years, it has received global recognition, served several states and practically enhanced budget attention, information access and understanding in Nigeria.
In the quest to contribute to the development of Lagos as a smart city, Cc-Hub initiated an ambitious plan to develop a free wifi network in the young and tech-immersed Yaba area of Lagos state to catalyse an explosion of businesses and innovation.
Broadband Internet provider MainOne Cable has laid a 1km fibre optic cable for free to support the project and the Lagos State government provided tax waivers of a few million dollars to MainOne Cable for the groundbreaking work.
These are examples of isolated smart feats across the continent but the question remains to see if a productive environment can be birthed to duplicate and automate innovation. While fingers are easily pointed at African governments for not creating enabling environments for businesses and innovation to thrive, the success stories of M-Pesa, Cc-Hub et al demonstrate that scalable innovation is impossible without private sector participation.
The absence of a thriving innovation ecosystem is as much the absence of private sector investment as it is government’s ineffective policy making and support. Most of the technological breakthroughs enjoyed world over today – the smart phone, pharmaceutical drugs, alternative energy products, etc – were incubated R&D projects of bluechip companies.
When South African-born technology visionary and entrepreneur Elon Musk created X.com, the payment start-up that later became Paypal, the pioneer of what today is known as Internet banking, he received $100 million and institutional support from financial juggernauts such as Deutsche Bank and Goldman Sachs. It is easier for innovation to thrive with such partnerships and the two lenders’ risky desire to be innovative and push the envelope for their boring industry has paid off. Paypal has become a dominant global payments player with a $30 billion valuation.
How many African banks have invested $500k in a fintech? How many are really at the forefront of reducing the continent’s high rate of unbanked population, and online banking issues through smart technology? How many true African major companies have innovation labs, are incubating start-ups in their industry and are really invested in R&D to provide cutting-edge technological solutions to unlock the continent’s potential and create wealth? How many are daring to be innovative?
In Nigeria, online payments security and adoption is suffering huge challenges that are dissuading users and slowing down the growth of ecommerce. Yet there is no publicly known investment or interest by the country’s continent-conquering mega banks in fintech start-ups tackling this payment problem. Instead, Nigeria’s fintech hopes, PayStack and SureBids, had to look to Paul Graham’s US-based start-up incubator YCombinator for funding, mentorship and partnerships. Africa’s private sector has also mostly abdicated in its part in the technological creation value chain.
Though there are pockets of financial and institutional input from corporate Africa for technological innovation on the continent, but an industry wide approach is much needed for scalability and significant impact.
These are some of the discussions that will headline the Nigeria edition of Africa’s flagship innovation conference, The Emergent Continent, organized by TheNerve Africa, a global growth information company focused on continental Africa. The event holds in Lagos on November 16, 2016 at the Intercontinental Hotel, Victoria Island, Lagos. There will be five panel discussions covering Smart Cities and Smart Corporations, Smart Payments, Smart Agriculture, Smart Content and Smart Investments.
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