Digital tech’s role in Africa transformationWednesday February 21 2018
The World Bank’s 2018 Global Economic Prospects reports that four out of the ten fastest growing economies in the world are African.
Yet the continent is facing many challenges including stalled industrialization, rapid urbanization that is forcing many people to live in slums, unemployment, declining agricultural productivity and resource utilization, and the threat of rising extremism in the western world that may alter trade relationships.
Fortunately, the high rate of technology adoption may be the ‘knight in shining armour’.
Africa is adopting ICTs and enabling digital technologies to transform the continent. However, much more beyond admiration of adoption rates needs to be done to effectively realise the full potential of the transformative nature of digital technologies.
There is need to emulate other emerging societies – of which we have only seen the beginning – what Nagi Hanna refers to as “smart, data-driven, learning economy and a smart, networked, learning society.”
The greatest impact of digital transformation in Africa has no doubt been in the financial sector where it has empowered millions of people to access banking services, facilitated financial inclusivity and greater productivity in the economies.
The success of Kenya’s phone-based mobile money transfer innovation, M-Pesa, was a culmination of different actors coming together to offer the necessary political will, organisational support and an economy that was yearning for greater productivity.
In social and cultural aspects, the demographics favoured new innovations that embraced cashless transactions. Next will be agricultural disruption.
This sector is the backbone of African economies employing more than 80 per cent of the workforce and contributing to more than 30 per cent of GDP in sub-Saharan Africa (SSA).
Productivity in food production and distribution is among the greatest problems in virtually every country. That is changing.
A Nairobi-based start-up, Twiga foods used big data analytics and a mobile platform linked to M-Pesa (mobile money app) to develop the farm-to-market supply chains for bananas in Kenya. They are in the process of replicating the same for fruit and vegetables across the continent.
Twiga Foods’ intervention is transformative given the fact that the fruit and vegetable market in Africa is haphazard and registers post-harvest losses of more than 40 per cent.
Twiga has virtually eliminated waste by aggregating customer data and organizing distribution of produce to retailers on need basis. The platform has made it possible to more precisely match prices to demand and supply.
With data and other emergent technologies like Internet of Things (IoT) and Artificial Intelligence (AI), the platform is able to support retailers with credit and other business development facilities.
Investors have noted this fast growing company as evidenced by their response to Series A funding round that attracted $10.3 million within a short period. The funding is for the company to expand into other farm produce.
The potential for Twiga to scale up is great but scalability still depends on whether they will have the political will, social and cultural acceptance.
READ: Bulk supplier Twiga Foods raises Sh1bn, to increase clients
So far so good, the adoption rates are high but vulnerable if policy makers interfere with the business model for lack of a regulatory framework.
In case of M-Pesa, the policy environment has been streamlined with existing regulatory framework.
Scalability of Twiga means they will be a fully-fledged commodities exchange that is not regulated at the moment. These two cases demonstrate the basis a recent paper, Making sense of Africa’s emerging digital transformation and its many futures, that I co-authored with Tim Weiss, published in the latest edition of ‘‘African Journal of Management.’’
We argue that these technologies that leverage on ICTs are unstoppable and going by their adoption, they are bound to impact every facet of life in Africa.
Already they have gone beyond financial services into agriculture, transportation, education, health and even manufacturing just to mention a few. Africa’s challenges can be addressed by leveraging the emerging digital transformation.
Contrary to what Africa digital transformation enthusiasts believe, adoption alone does not indicate any broader change or transformation but rather indicates a potentiality for change — a latent power to catalyse broader societal change processes.
There is need to look beyond adoption.