We live in a world where technology is advancing at an incredibly rapid pace. This involves both challenges and opportunities for emerging economies – the category into which many African nations fall. Technology may offer solutions to some of the difficulties faced by people in African nations, but there is also the challenge of integrating new technology with legacy systems, and ensuring that it is affordable enough to actually benefit people.

Many of the more exciting developments have focused on connectivity and software or apps. However, these can only be of benefit where people have access to the internet. This is one area in which Africa lags behind: currently, only around 26% of Africans have mobile internet access. This is a major limiting factor on their ability to use modern technology.
There are several key factors behind this lack of connectivity. Despite decades of net migration to cities, many African people still live in rural areas, in small, often quite isolated settlements. These can be uneconomic to connect to internet networks such as fibre – the distances are too great, and the density of paying customers too low.
Mobile internet connectivity offers a potential solution, but the infrastructure challenges resulted in high data costs – another barrier to entry for people with limited means. In some African nations, governments restrict access to either parts or all of the internet as a way of controlling the flow of information.

Much modern technology is concerned with the digitisation of services, such as financial transactions. However, Africa is in general underbanked – many people do not have formal bank accounts, and rely on cash and barter transactions which can be hard to digitise.

The pace of change is accelerating
Overall, connectivity costs are falling as 3G and 4 coverage spreads. Data is becoming cheaper, and there are now many more affordable smart devices online. As more people get connected, they often join social media channels which can promote the sharing of ideas, and make people aware of developments in other regions or countries. As people become aware of these advances, local demand for them will be created, further accelerating change.

Where challenge meets opportunity
There is truth in the saying that ‘necessity is the mother of invention’. In Africa’s case, limited infrastructure has proven to be a spur to innovation in many cases. Innovations that began life in Africa include medicine delivery to remote homesteads by drone, satellite internet services, and mobile transaction apps like M-Pesa.
A classic example is the proliferation of mobile phone networks across Africa. Mobile technology came along just in time to save African nations making huge and ultimately redundant investments in landline networks.
Technology offers ‘development shortcuts’ that can allow African nations to bypass years of development headaches. Africa is also renowned for its ability to develop homegrown solutions.

Supply chain innovation
Africa presents a number of logistical challenges which can make ecommerce and other delivery-based industries. These include underdeveloped infrastructure, vast distances, and difficult terrain. In addition, many people in Africa – especially in rural areas or informal urban settlements – do not have formal house or street designations, making deliveries challenging. These problems are exacerbated by people moving between home and work locations, often over significant distances.
Supply chain innovation offers several possible solutions. One of these is the use of alternative mapping technologies such as GPS or what3words, which provide unique identifiers for every location on the globe, and can generate directions to those points.
Rather than door-to-door deliveries, drop-off points and hubs can be used to get goods to consumers, with the consumer then taking on the last mile responsibility. As mentioned earlier, drones could be a viable option in the case of high-value or extremely urgent deliveries. Phone-based payment systems or even cryptocurrencies could be used to facilitate payments and receipts in the absence of conventional banking functionality.
However, as with so many technological advances, supply chain innovation depends on reliable, high-speed internet connectivity. When this is provided, greater efficiencies in order tracking and route planning become possible – and this can empower African online shoppers to become truly global consumers by linking them to sellers everywhere, and reducing the cost of goods and shipping.

Artificial Intelligence (AI)
This significant technological advance allows computers to look for patterns, trends and anomalies in massive datasets that would be beyond the capacity of humans to analyse. The results can be used to drive advances in agriculture, healthcare and manufacturing through the more efficient deployment and use of resources. This obviously has great appeal in developing countries where resources may be in short supply in certain scenarios.
However, as with many of the other advances discussed here, the usefulness of AI can be impacted by any shortcomings in a nation’s digital infrastructure.

Blockchain and cryptocurrencies
This advance – which is generally misunderstood by the public – is also dependent on reliable digital infrastructure. Essentially, it’s an open, distributed ledger system that facilitates faster financial transactions and reconciliations.
As no single entity has complete end-to-end control of each transaction, blockchain provides a secure platform for cryptocurrency trades.

Blockchain – advantages for Africa
Blockchain – and the currencies associated with it – offer multiple advantages for business in Africa. Because it cannot be controlled by governments, it allows businesses and consumers to sidestep complications like exchange rates, bank security and currency fluctuations. This could be said to be a facilitating factor in the growth and ease of ICBT.
However, it should be noted that as cryptocurrencies are not backed by a central bank, their value is inherently volatile.
It has also been suggested that in addition to enabling microfinance transactions, and banking services for the unbanked, blockchain could play a role in securing land ownership registries and protecting the rights of smallholders.

Blockchain – potential disadvantages
Blockchain and cryptocurrencies are surrounded by a swirl of controversy which is in large part due to government scepticism or even suspicion. Regulators can’t control cryptocurrencies, and often don’t fully understand them.
Cryptocurrencies are unstable and prone to sudden, unpredictable changes in value. This can undermine the financial security of investors and businesses. Cryptocurrencies have also gained a degree of notoriety for allegedly making money laundering and other forms of criminal activity harder to detect.

Localisation of technology
This is something that Africa – and Africans – excel at. Where imported solutions cannot be afforded, or are otherwise unavailable, often the only answer is to create a homegrown alternative.

Imported solutions are not always ideal:

  • They can be expensive
  • They require licences
  • They were not designed for a best fit in African applications
  • They may be culturally inappropriate
  • They may well require skills training
  • They are often bound up with onerous maintenance and service contracts
  • They involve a net financial outflow

Organic or homegrown solutions, on the other hand, often provide an optimum fit:

  • They are based on local knowledge and insights
  • They utilise locally available resources
  • They are culturally appropriate
  • They generate revenue that remains in local economies
  • They can facilitate cooperation with other emerging countries
  • They contribute to collective self-esteem
  • They encourage input from African stakeholders

It’s clear that homegrown solutions offer multiple advantages, but how can they be encouraged?

Innovation and entrepreneurship
The need for innovative solutions is a spur to entrepreneurial behaviour, and the success of innovations proves the value of entrepreneurship. At Fondation-LAB, we believe that mentoring is the vital link in this chain as it encourages and inspires the next generation of entrepreneurs, and gives a value to innovation.
We facilitate social entrepreneurship mentoring programmes in Africa because we believe that in seeking solutions to local problems, innovative thinking gives rise to entrepreneurial opportunities.