Three Reasons Why We Need To Watch, Follow, And Invest In Africa In 2022
Despite the COVID-19 pandemic's harsh economic impact on the region's economies (with it having ushered in the first recession in 25 years), the economy is set to grow by 3.8% in 2022.
Having spent the majority of 2021 in sub-Saharan Africa, what has become blatantly apparent to me is the scale and speed with which the subcontinent is growing. Despite the COVID-19 pandemic’s harsh economic impact on the region’s economies (with it having ushered in the first recession in 25 years), the economy is set to grow by 3.8% in 2022. The COVID-19 crisis has also pushed for the structural and economic changes needed in this region, such as the reform of fuel subsidies in Nigeria.
Most of our recent work at Mirai Partners, an award-winning business in edtech, literacy, and innovation that I co-founded, was in Africa. Thanks to our collaboration with HP, we are now actualizing our vision of bringing world-class education to the most vulnerable and disadvantaged. This past month, we planned school improvement for future education with different ministries, trained more than 100 teachers, and successfully launched the first literacy assessment powered by artificial intelligence (AI) in rural Maasai. Indeed, Africa offers a huge opportunity for edtech businesses- and we aren’t the only ones tapping into it.
For instance, South Africa owns fluency in digital jobs creation, with the country finding itself able to meet the strong demand for digital businesses. According to Freedom On The Net scores, the country maintains high digital transparency. It is also a leader in the use of drones in the mining industry, as well as in the application of biometric data for social security.
Kenya, on the other hand, has always been a hub for innovation. It is home to Ushahidi, M-KOPA, and M-TIBA- some of the best digital enterprises on the continent. Moreover, Kenyan policymakers promote maximum use of digital payments. Two initiatives include eCitizen, an online government-to-citizen platform, and Huduma E-Centers, offering 200 digitized services countrywide. But, due to gaps in education and health, Kenyans born today will achieve only 52% of their potential if they survive to adulthood. Therefore, by leveraging the digital hub, investments need to go into policies that promote education, digital skills, and healthcare.
Rwanda too has always been a pioneer in exploring emerging technologies, such as banks that issue digital currencies, and drones that deliver crucial supplies to difficult areas. E-certificate authentication and digital education policies are what works best here.
Meanwhile, in the north, Egypt has become a leader in the media realm, with it housing some of the region’s best online freelancer pools in writing, translation, creative media, and software. Digital tech is the country’s second-fastest-growing field. Half of the population are millennials with access to a massive e-commerce market, making it the fastest-growing entrepreneurial hub in the region.
In West Africa, Nigeria boasts of a powerful climate in agriculture, fintech, logistics, travel, education, and healthcare. It is home to innovative ventures such as Jumia, Interswitch, Kobo360, and Andela. But unfortunately, the country has an informal economy (65% of GDP and 80% of workforce), its citizens have poor public trust in technology. Policies facilitating digitization therefore must acclimate to challenges, and they need to be addressed over time.
Ethiopia ensures that 70% of students train in science, technology, engineering and mathematics (STEM) for a strong human capital base. However, to limit cheating in examinations, intentional internet shutdowns and unreliable power supply are barriers to the country’s digital evolution. Reliable infrastructure is priority here, and there's also a need for privacy. Privatizing the telecoms sector catalyzes competition, and entrepreneurship would also be a shot in the arm for the nation.
By the way, it’s not just me who is keeping a close eye on all of the aforementioned changes happening in sub-Saharan Africa- Big Tech is watching too. The middle class is exponentially expanding in this region, and sub-Saharan Africans have increased access to education, mobile phones, and the internet. People here, now more than ever, have access to disposable income. Keeping such factors in mind, here are three reasons why big tech is already investing in Africa- and why you need to start as well:
1. AFRICA IS WHERE BIG TECH LOOKS Today, legislations and terrorism limit corporate growth. Trading is increasingly difficult. But, Africa accepts risk, value, and long-term growth. Also, today, such markets are rare.
For instance, IBM recently decided to invest in a research facility in Nairobi, saying, "We believe research for Africa, solving Africa's grand challenges, has to be done on the ground in Africa, and this is why we set up and made this investment." Similarly, Microsoft initiated the project, 4 Africa, focused on building the local workforce. "We want to focus on young people,” the company said. “We want to focus on skills. We want to focus on small and medium enterprises. We want to focus on access to technology.”
New York City-based SHop architects developed cutting-edge construction through an app that allowed virtual supervision from another country. "This technique can eliminate the need for conventional drawings, aligning the imagination of our designers as closely as possible to the capabilities of the automated machinery used in component manufacturing," SHop said. This explains how the Barclay Center's construction in Brooklyn had contributions from South Africa’s Cape Town and Botswana’s Gaborone. Indeed, virtual supervising made co-construction between local architects and fabricators from Cape Town possible. Barclays now substantiates "a national priority of transforming the country into a knowledge-based economy," according to the South African government.
2. AFRICA HAS ADOPTED THE MOBILE Mobile adoption offers cross-sectoral opportunities, and Africa trumps the industry in this regard. According to a 2017 report by the World Bank, Africa has totally terminated landlines through mobile phone technology. Mobile payment networks have opened the global economy to poor cities and rural dwellers, with them being pioneered in East Africa.
This adoption has resulted in a myriad of successes. For example, Novartis used mobile communications to maintain its supply chain seamlessly. Olam used it to connect with new prospects in farming. And, in 2014, Ethiopia developed a hotline that connected small farmers to agronomists- three million calls happened in the first six months of the pilot.
3. AFRICA IS FULL OF GAPS Compared to the rest of the world, Africa is the only continent that has so much poorly used arable land. But it is also absolutely compatible with new tech in energy and supply chain design. For instance, it can generate power with conventional (oil, gas) or amenable (wind, bioenergy, solar energy) fuel grids, both of which are equally abundant. At the same time, the current state of African food production does present the potential for massive agricultural breakthroughs.
For an economy with such an abundance of resources, Africa severely lacks investment and governance. As the Chairman of Renaissance Capital Christophe Charlier said, "If the African governments assist and invest and create the environment where these children are being properly educated and then employed, that will create a massive middle class that’s going to be looking for more products. That could be a huge boost to the economy.”
Legislations and terrorism cyclically impact the continent. But tech In Africa may be able to put an end to this cycle. Indeed, with tech and entrepreneurship on the rise, investors are keener to invest in the continent. But while all of these are substantial reasons, human connection needs to remain always at the heart of what we do. For us at Mirai, there is nothing as inspiring as the human connections made with people, teachers, parents, and children. And if we are to build a sustainable world, Africa is where we need to look.