VENTURES AFRICA – Africa’s innovative prowess may not attract significant global attention, but when discussions arise regarding the continent’s willingness to harness the potential inherent in information technology, it certainly cannot be overlooked.
The continent now has a number of countries listed in the top 100 nations exploiting technological solutions to promote socio-economic development. Mauritius, Africa’s most developed financial hub, leads the pack. It ranked 45 in the 2015 Networked Readiness Index (NRI) compiled by the World Economic Forum. Mauritius is the only country to make the top 50. Seychelles (74), South Africa (75), Rwanda (83), Kenya (86), and Cape Verde (87) are the only other entrants to the top 100 list.
Ironically Nigeria, despite overtaking South Africa last year to become Africa’s largest economy, failed to feature in the top 100. It has a rank of 119 out of 143 countries.
Africa still has work to do in getting its countries to enjoy the dividends of a connected community. Sub-Saharan Africa only produced six countries in the top 100 tech adopters. Europe, however, had 37 representatives (the most by any continent), while the Americas and Asia contributed 19 and 24 respectively.
Despite these shortcomings, a few sectors have blossomed with the infusion of technological solutions. One of those is the financial sector. Cashless economies are springing up while mobile money transfer platforms, which are targeted at ‘banking the unbanked’, are now a common feature. A prime example is the revolutionary money transfer service M-Pesa. Brought to Africa by Vodafone in 2007, M-Pesa has made Kenya home to one of the most renowned financial solutions of the 21st century, solving one of the most critical issues that has long plagued Africa’s financial sector—moving money. Kenya, as seen in many sub-Saharan African nations, is predominantly made up of rural settlements. This scenario often limits the spread of traditional banking services, thereby hindering family members in urban settlements or in the diaspora from sending money home cheaply. But M-Pesa has helped address this challenge within East Africa, registering more than 17 million accounts in Kenya alone. It has also been adopted by countries in Europe and Asia.
The success of M-Pesa was driven by largely by mobile phones, which the continent welcomed en masse just a decade ago. Since then, mobile penetration has skyrocketed, climbing to 85 percent as at December 2014. It remains the world’s fastest growing region in mobile adoption. “Mobile telephones may become ubiquitous around the world, but the ICT revolution will not be carried over voice or SMS,” says Thierry Geiger, a Senior Economist at the World Economic Forum. The French economist, who was also a co-editor of the report, suggested that without better and cheaper internet, a significant proportion of the world will continue to live in “digital poverty.”
This can be noticed in parts of Africa, despite the pockets of advancement recorded in a number of countries. Internet proliferation still hovers around 26 percent, well below the global average of 35 percent, and though smartphones are becoming increasingly popular by the day, data charges remain very costly.
While Africa has made significant progress with its impressive M-Pesa, increasing mobile penetration, and a new cluster of internet-powered companies as proof, the report makes clear that an attempt to compete with other continents will require a more holistic approach that cuts across the entire socio-economic value chain.