Samir Abdelkrim travelled the continent of Africa for over three years and has shared his observations on the African tech ecosystem in a book, entitled ‘Startup Lions’ (to date in French only), a 200+ page travelogue describing innovation in Africa. The author, who is also the founder of StartupBRICS, a French media channel specialising in emerging country technology, highlights the struggles and determination of the Startup Lions, African entrepreneurs who are using technology to “redevelop development” in Africa for the good of their 54 countries, their continent and the world. L’Atelier caught up with him recently.
So what’s the picture as regards innovation in Africa today?
Well, you can’t talk really about a single Africa. The continent comprises 54 countries and as many ecosystems. But Africa can be seen in terms of major regions: you have francophone Africa and anglophone Africa, and we can say that anglophone Africa is a little bit ahead. In East Africa the first Tech Hubs – which have really transformed their communities – have emerged, for example in Kenya, with the mobile payments system developed in the early 2000s which became a fully-fledged solution when the FinTech money transfer service M-Pesa launched in 2007. But I’d say that in francophone Africa everything is starting to move very fast and today we are seeing startups scaling up. Partech Ventures, a Silicon Valley-based venture capital firm, has launched an Africa-focused fund, Partech Africa, which is based in Senegal. The fund has raised $70 million of its $100 million target, making it one of the largest Africa-focused funds providing early-stage financing to promising startups and company founders on the continent. We’re seeing extraordinary amounts being raised, sums that we couldn’t even have dreamed of two or three years ago, with startups that have raised between 5 and 10 million. This is something really new. So francophone Africa is catching up.
What’s driving the tech ecosystem in Africa?
The three countries leading the way are Nigeria, Kenya and South Africa. Nigeria, with its huge market of 190 million people, which makes it the country with the largest population in Africa, developed an ecosystem early on; the first ecosystems emerged in 2010. Another driver is the entrepreneurial spirit, the ‘hustle’ as they call it there, the will to succeed, because it’s an overcrowded country, which is very corrupt, with no or very little infrastructure, so people have to manage on their own. Kenyan people have a precocious appetite for digital and mobile. This is where the first tech revolution in Africa took place, with M-Pesa mobile payments, which showed how people there are eager for structural disruption; the future of the country has changed completely. The whole economic structure of the country has changed totally for the long term due to the mobile payments system which was invented in Kenya. There’s a willingness to take the initiative and a thirst for innovation inherent in Kenyans which is extremely entrepreneurial, which doesn’t wait for the government to take a hand. And it’s the same in Nigeria. Last but not least, there’s South Africa, where infrastructure is far more advanced than in the rest of Africa and this has helped to build an ecosystem which is more organised than in Nigeria or Senegal for example.
Your book highlights ‘organic’ innovation and serendipity. Can you tell us a bit more about these things?
When I talk about organic innovation, I mean innovation that runs ahead of any government action. Governments happily ignore, and sometimes don’t even want to see, solutions that come about through tech innovation. Organic innovation is innovation that responds to needs, to people’s tangible daily challenges, and sometimes, almost unintentionally, from the search to find solutions to the country’s problems. The best example of organic innovation is Ushahidi. This is a real tech community which got together quite spontaneously in 2007 in response to a major political problem during the 2007 crisis in Kenya. The Ushahidi community set up a collaborative platform mapping the crisis, which ensured that information on acts of violence could be relayed by SMS. The Ushahidi app – the word means ‘witnessing’ or ‘testimony’ in Swahili, the most widely-spoken language in Kenya – enabled the massacres, the political and ethnic abuse, to be reported, recorded, geolocated and made known to the world. The community of bloggers, entrepreneurs, coders, designers, all Nairobi’s geeks – who at first were relatively isolated and didn’t know how to get together – all worked spontaneously on creating Ushahidi. The great popularity of the platform led the community to want to give something back in return and they created the i-Hub, which became a focal point, the ecosystem’s centre of gravity, a bastion of serendipity where you can meet potential co-founders, investors and entrepreneurs. I was at the i-Hub in September 2016 at the time of Mark Zuckerberg’s surprise visit, which was no small occasion given that Africa is the last region on earth where there is very often no Internet connectivity. It’s the world’s least connected continent, so there’s a huge market up for grabs.
So Africa’s challenges are being transformed into digital opportunities?
The problems act as catalysts for setting up ecosystems in the sense that they open the way for lots of talented people, a host of startups, a whole community to manifest themselves, and often it’s in the form of a Tech Hub. Far from the image of Epinal [an area in the east of France that has seen a resurgence thanks to technology applied to its main raw material, wood – editor] or Silicon Valley created in a garage, what’s often forgotten is that it wasn’t entrepreneurs who started Silicon Valley, it was pressure from the state, it was the manufacturing sector during and after World War Two which invested billions and billions to develop technology, attract skilled people, build universities and draw up a digital strategy that made the Silicon Valley cluster blossom. In Africa, organic innovation is all about entrepreneurs who create their own ecosystems, their own incubators, their own investment funds.
AFRICA, very different from the image of EPINAL OR SILICON VALLEY created in a GARAGE
The M-Pesa mobile payment solution has re-shaped the future of Kenya’s economy. Is M-Pesa a good example of organic innovation and serendipity?
Well, a lot of people know about about the wide popularity of M-Pesa, the mobile payment solution which made the headlines in 2007 by enabling the – largely ‘unbanked’ – people of Kenya to send and receive money via SMS, to remit funds to their families, make transaction safely without the risk of being attacked and robbed – quite simply to stay alive. But the story of how this disruptive innovation, the first on the continent, actually came about is much less well known. It is in fact the story of an innovation driven by the way Kenyans do things, which started out in the early 2000s and subsequently came to fruition as M-Pesa (M for Mobile, Pesa meaning ‘money’ in Swahili). I met Bernard James Maina, founder of a microlending agency, in the heart of a Johannesburg township, who told me his story. It’s an ‘organic’ story, a good example of serendipity. At the time making mobile payments was simply out of the question, there wasn’t such a thing, but there was ‘airtime’ – prepaid telephone time. Kenyans were transferring airtime to their relatives or friends who were then using it or reselling it. There were already telecoms operators who, for instance, allowed users to buy minutes and transfer them to their friends and family. Maina realised, as did the operators, that millions of minutes were travelling across Kenya unused.
M-PESA, A GOOD EXAMPLE OF SERENDIPITY
He realised that, without being aware of what was happening, and in a very natural way, without any advice from outside, Kenyans were using airtime as a currency, as a barter medium. They bought products in exchange for airtime and these minutes were then used to pay day labourers. It was standard practice for a farmer to pay his workers in telephone minutes. And then in 2007 Safaricom, the largest mobile network operator in Kenya, realised that something was going on. The firm didn’t know quite what, but they started to develop what later became M-Pesa, which then became the bank for the unbanked. Contrary to what people say, the main innovator behind M-Pesa was the people of Kenya, who had already started, five years before the launch of M-Pesa, to hack the banking system without realising they were doing so. This is a concrete example of organic innovation, of habits leading the way, of serendipity, as defined by the man who coined the term, who said that the princes in the Persian fairy tale were: "always making discoveries, by accidents and sagacity, of things which they were not in quest of".
FinTech seems to be one of the sectors that’s made a lot of progress in Africa. Why is that?
The FinTech sector is moving at lightning speed in Africa because it can help to solve the huge problem of ‘unbanked’ people
When you don’t have a bank account you’re condemned to being part of the informal economy. FinTech has enabled people in Africa to engage in economic interactions other than cash-in-hand or barter trading. Mobile payment solutions such as M-Pesa mean that you can pay salaries, bills, pay for your shopping, for a taxi; you can pay for everything on your mobile phone rather than using cash or barter. And this is official money, which is being re-injected into the economy so it also helps to pay for public services. The FinTech sector is moving at lightning speed in Africa because it can help to solve the huge problem of of ‘unbanked’ people. We’re talking about 1.2 billion people in Africa and in thirty years’ time there’ll be two billion. Nairobi has become a laboratory for the financial services of tomorrow, but it’s not just mobile payments that are making progress in Africa. What’s interesting is that a whole financial ecosystem has been created. Microfinance startups such as M-Shwari have rounded out the M-Pesa service, allowing low-income households to borrow small sums in real time, at preferential rates, so as to be able to rent a space, for example a hairdressing salon that a woman entrepreneur would like to set up. Applying technology to the financial sector has created an entire ecosystem around mobile payments in Africa, especially for the base of the pyramid.
Would you agree that in Africa the education sector provides another opening for digital technology?
among young africans
Well, when it comes to EdTech, the problems are pretty much the same. There’s a lack of infrastructure, but in this case it’s schools rather than banks. Given that the 1.2 billion inhabitants of the African continent have an average age of 19-20 and the unemployment rate among young people is close to 30%, EdTech specialists are hoping to enable African youth to catch up and leapfrog into the new technology era. In fact SMS has transformed the mobile phone into a new version of the school exercise book. I looked in detail at the model developed by the Kenyan startup Eneza Education, founded in 2011. A total of 8,000 schools use the Eneza solution in Kenya, which adds up to four million young Africans who, for less than €4 a month, use or have used Eneza Education to learn to read or count, through quizzes and lessons, with access to a simplified version of Wikipedia and, most importantly, personal interaction with and support from a teacher.
And there’s a new trend: bringing together education and energy – EdTech and GreenTech. In Côte d'Ivoire for example there’s a project called Solar Pack, a backpack with an integrated lamp that recharges using solar energy so that schoolchildren can study in the evening. In Nigeria, Ghana, and Côte d’Ivoire, a frightening number of people don’t have access to electricity and most Africans light their homes with kerosene lamps, which are highly pollutant. The equivalent number of inhabitants of a city like Lyons – which has over 500,000 – die from air pollution every year. And often, as soon as night falls, schoolchildren have to stop studying. The solar backpack enables them to do an extra two to three hours’ study in the evening, raising their level of education and boosting their chances of getting good marks at school.
MOBILE AND SMS: tWO ESSENTIAL ASPECTS OF DAILY LIFE IN AFRICA
Agriculture is the basis of the African economy. So is this sector fertile ground for digital technology?
INNOVATION is GERMinating in THE SOIL OF africa
The Sahel region is having to cope with all the challenges facing the world today: global warming, food insecurity, demographic issues – it already hosts 100 million people and its population is likely to pass 400 million by 2050. In this region we find particularly disruptive innovations in agriculture – which is as it should be, given that Africa’s economy is largely agriculture-based. In the capital of Niger, Niamey, I came across a startup called TechInnov, which specialises in remote irrigation, using Big Data and nano-sensors to expand the area of land that can be cultivated. TechInnov has helped turn zones that used to be entirely desert into green fields, bringing billions of hectares of land back into cultivation. The technology, which has been developed by a Nigerien entrepreneur, Abdou Maman Kané, is used by thousands of peasants in Niger; on average multiplying by three the amount of fertile land that would be available using traditional methods. The ‘connected’ remote irrigation equipment works on the basis of a set of nano-sensors that measure humidity, soil temperature and also the air temperature – which is extremely important, especially when the harmattan, the Sahel desert wind, blows. The irrigation device takes all this information into account and will, for example, speed up the waterdrop count, because when the drops are too spaced out and the harmattan is blowing, the water evaporates in mid-air and the land doesn’t receive any. The equipment pumps water from a well; this is also an interesting feature as the pumping is controlled via SMS. Traditionally farmers would sometimes have to dig down fifty metres in order to activate the pumps manually, which leads to a huge number of accidents and deaths. The TechInnov solution enables a farmer to turn a pump on and off by SMS, even if it’s installed a hundred metres down. Moreover, the pump is solar-powered, a far better approach than using oil-driven pumps which tend to pollute the groundwater table.