- Africa finds itself in the middle of a trade war that could adversely affect its future, and experts now warn that the ongoing feud between the world's largest economies could harm the continent’s digital transformation.
- For a region that has heavily depended on Beijing and Washington for both financial aid and technological transformation support, looking West or East for any support is equally consequential.
Africa finds itself in the middle of a trade war that could adversely affect its future, and experts now warn that the ongoing feud between the world's largest economies could harm the continent’s digital transformation.
For a region that has heavily depended on Beijing and Washington for both financial aid and technological transformation support, looking West or East for any support is equally consequential.
Peter Mwencha, chief executive of International Society of Kenya says that Africa’s over-dependence on both nations for imports has led to the ensuing juggernaut.
"Africans are consumers of technology from these tech giants and that is why they have found themselves in a difficult position. There is a total lack of technology creativity that can shake the world, and choosing China or the US is a quagmire," he notes.
He adds that Africa is under dilemma at the moment since techno-political tensions between the two economies could create exposure to political risks which could affect commercial benefits.
Stefan Dercon, professor of economic policy at Oxford University says that the most unfortunate outcome would be if Africa needs to choose between China and US in the short run.
“There is a clash of values, and the UK and Europe as a whole also find themselves caught up in this,” he says.
Kenyan co-founder and CEO of Toronto-based startup HealthBank Odero Otieno told the Business Daily that there is no doubt that the US-China technology trade war will have ramifications for Africa, a continent with a population of more than 1.3 billion people, and which remains at the bottom of the global supply chain.
"This leaves Africa as the main battle frontier for the escalating US-China trade wars. In the midst of this war is the growing global influence of technology companies based in China such as Tik Tok, surpassing America's Facebook as the world's most downloaded non-gaming app," he expounds.
The app, which has rapidly amassed more than 2 billion users across the world including in Africa, has been facing a ban in the US with major companies in the US like Microsoft and Oracle bidding to purchase its US operations.
"If an African country goes for help in China, it will be sidelined by the United States. If you are pro-America, the Chinese won't approve your loans as fast as before," says Boniface Mutunga, an expert in international trade and finance.
But what worries many Africans is the fate of Huawei smartphone users, after the US banned the phone manufacturer from using the Android Operating System (OS) that has dominated the world.
"That is all to the detriment of the US for putting restrictions on Huawei because it has gone ahead and designed its own operating system – Harmony - to retain users. African users can keep on using the gadgets," Prof Bitange Ndemo of the School of Business at the University of Nairobi observes.
However, the Harmony OS currently has only 96,000 apps compared to more than 700,000 that are ready for download from Android’s Google Play Store.
After the ban, Huawei surpassed Samsung to become the top selling smartphone in the world in second quarter of 2020, with a market share of 20 percent. While Apple had 14 percent of the market, other Chinese brands like Xiaomi, Oppo and Vivo also had a sizeable share.
The US, which has constantly accused China of espionage on its devices, algorithms and codes, only gets a small share of the African market, while China ships most of the electronic devices used.
"It is because Chinese products are more affordable than those from the US. African countries are still low income economies and therefore only a few people can afford the iPhone 11 Pro compared to the Huawei Y6," says Mr Mutunga.
He adds that African's fondness with the open source Android system could trigger lower sales of Huawei smartphones in the continent, but notes that the other brands that Africans find pocket friendly also come from China.
Huawei, whose 5G technology was banned in the United Kingdom due to pressure form the US, commands the largest share of 5G networks in the world, with over 150 base stations being shipped, according to mobile recharge service Ding.
June last year, the company won 50 commercial 5G contracts for 30 countries, expanding its network to other Asian countries and the Eurozone.
"China has raised the yardstick for measuring global dominance. It is installing 5G in several countries to firm its grip on its market leadership and prowess through fast internet connection and a robust Internet of Things system. That is the new global power," remarks Mr Mutunga.
In the cut-throat tech marathon between the two nations, US President Donald Trump at one point proclaimed that he wanted to see 6G in his country.
"I want 5G, and even 6G, technology in the United States as soon as possible. It is far more powerful, faster, and smarter than the current standard. American companies must step up their efforts, or get left behind. There is no reason that we should be lagging behind," Mr Trump announced in a tweet dated February 21, 2019.
Huawei is also competing with Google in growing Kenya’s tech talent.
Recently, the Chinese firm launched the seventh cohort where 60 Kenyan university students will be trained on technologies like 5G, Big Data and cloud computing, in its Seeds for the Future programme.
But Google has outdone Huawei in the training front, giving a grant of Sh100 million to train 100,000 farmers in the country in 2018, while partnering with the Mombasa County Government to train 5,000 youth in digital skills as part of their Grow with Google programme.
However, Dr Mwenja reckons China seems to have understood the African psyche better than the US, and that is why companies like Safaricom use Huawei devices for their Wi-Fi installations, as they prepare for the take-off of 5G.
"The US approach to Africa is too commercial, too capitalist. Their products such as iPhones come with conditions. The Chinese have known what Africans want, they have embedded development in their policy of tech dominance," he explains.
To counter sanctions in the US and the drops in Chinese exports to Europe, manufacturers from Beijing have been flooding African markets with cheaper products than what local African companies can profitably match.
"This is largely because these African companies do not enjoy the large economies of scale that is synonymous with their Chinese counterparts, further pushing Africa down the supply chain," notes Mr Otieno.
But as Africa builds its Big Data ecosystem, China's tendency to listen into the lives of people using sophisticated technology is pushing the continent away from devices from the world's most populous nation, citing privacy concerns.
In 2018, for instance, Beijing had to deny reports that it spied and eavesdropped on the proceedings of the Africa Union meetings in Addis Ababa by creating a 'backdoor' to siphon confidential data from the servers, for more than five years!
Many media reports indicated that in January 2017, technicians noticed that between midnight and 2 am every night, there was a peak in data usage even though the building was empty. Investigations revealed that the union’s confidential data was being copied on to servers in Shanghai.
China, which has funded numerous development projects in Africa, finds itself in the same boat with the US — through Google and Facebook, regarding the breach of data laws, as they both take advantage of Africa’s underdeveloped Big Data sector.
This further shines the spotlight on Africa's lack of innovations in the tech industry that can birth companies to compete in the global data economy.
Prof Dercon says the most constructive response would be for Africa to sort out its governance of these technologies to avoid depending on the competing models of the two superpowers.
“Data cannot remain an ungoverned space including in Africa. Given the uncertainties and lack of transparency of the governance of technology, it may well force Afican governments to take cybersecurity, and the need for them to understand and invest in this, more seriously,” he remarks.
Dr Mwenja observes that data being the ‘new oil’, has sparked a silent war between China and the US over who controls Africa's data.
“This is where African nations must team up and create a data law to protect their citizens, otherwise the two countries will keep amassing valuable data at the expense of the continent,” warns the expert.
Since technology comes before regulations, he adds that the continent needs to step up efforts to create global solutions, since regulating a technology you do not own or you have little understanding about has proven an up-hill task for African governments.
Prof Ndemo's worldview is that that Africa's vulnerability to tech manipulation lies within its disjointed progress in the Fourth Industrial Revolution, and time for all the 55 nations to unite is fast running out.
"These nations are fighting for monopoly and have gathered so much behavioural data that they can predict how, why, when and what Africa wants," he says.
He calls for the creation of a single digital market for Africa, to enable the 1.3 billion citizens to negotiate in the global digital economy.
"We cannot compete as independent nations, we have to unite so that when we have an issue, the world can listen to us."
Meanwhile, Africa's leading economies like Nigeria, South Africa and Kenya can become beneficiaries of this trade war, if they lead Africa in stepping up support for local companies and startups, especially in the technology space through grants, subsidies and establishment of government-funded technology hubs.
"Kenya and Nigeria have talented young entrepreneurs and engineers. Combine this with the fact that the African continent is endowed with some of the world's most important minerals, there is no reason whatsoever, as to why these countries still do not manufacture basic things like smartphones and laptops, or even cars," Mr Otieno opines.