August 3, 2011Doug Hadden
Liza Benkovitch, FreeBalance Washington
With the current state of tech innovation spreading in Europe, Asia & North America, it is not surprising to see the rise in tech communities in Africa. Technological revolution fosters new growth of local businesses and provides a better infrastructure for sustainable development within the continent. This trend is often termed ICT4D or Information and Communications Technologies for Development.
Africa: The Continent of Opportunity
According to Gallup Survey, entrepreneurship in Africa is becoming a popular notion, with 1 out of 5 African young adults are planning to start a business in the next year. This will help overcome the negative stereotypes and rebrand Africa as a continent of opportunity, sustainability and a land of capacity building initiatives.
Given the current IT infrastructure limits in Africa, the high growth rate of African start-ups is impressive. In sub-Saharan Africa alone, over 90% of business operations are conducted through SMEs and they contribute around 50% of GDP. Hence, more people have started their own small businesses and internet ventures. Obinna Ekezie, for example, is a Founder of a Nigerian start-up, www.wakanow.com. Wakanow is an online travel booking company that provides customers with convenience and flexibility to make online travel arrangements within Africa. E-services range from online tickets, corporate travel, hotel booking and even airport pickups. And to add to the convenience factor – the Wakanow mobile app was just launched.
Funding African Startups
The nature of start-ups in Africa is evolving. Start-ups been funded primarily by venture capitalists and philanthropic investment firms, with the support of intermediary organizations. Active SMEs investors in Africa include Soros Economic Development Fund, Omidyar Network, and Google. Omidyar is known to fund companies and organizations that promote capacity building, government transparency and accountability projects. In Africa, the Omidyar Network is a financial backer of many organizations, including iHub, a Nairobi based incubator, known as the “nerve center for technology.” iHub is particularly interesting because it supports sustainability initiatives in Kenya by hiring local people to run the center and encouraging entrepreneurs to invest in their country by establishing small business enterprises (SMEs). The brainchild behind this innovative project is Erik Hersman, a technology influencer and startup guru. iHub, and other incubators such as ActivSpaces (Cameroon), Bantalabs (Senegal, Paris, London), MEST Incubator (Ghana), all serve as an essential nexus for technology, financial capital and skills.
Government Transparency and Accountability Trends in Africa
Part of Omidyar Network’s investment strategy thus far has been to invest in the government transparency initiatives. Most recently, the Omidyar Network and a Dutch NGO, Hivos, launched a multimillion dollar Nairobi fund, the Africa Technology and Transparency Initiative (ATTI). The purpose of ATTI is to invest in technological platforms that help citizens track government activities & expenditures throughout the country.
As many African countries are becoming hotbeds of tech activity, government transparency and accountability has become more critical in Africa. Good governance is considered critical to improving development outcomes and to improving the business climate.
In mid-June, the Government of Liberia launched the Integrated Financial Management Information System (IFMIS) at the Ministry of Finance. The IFMIS is the FreeBalance Accountability Suite software that enhances “government’s credibility with its citizens and development partners, and demonstrate its continuous commitment to transparency and accountability,” said Minister of Finance, Augustine Ngafuan.
The Government of Kenya launched an Open Data Initiative, a data web portal that enables official government information to become accessible to the general public. The World Bank, along with Google and iHub assisted with the publication of the data and the Government of Kenya has contributed to the launch. The data sets are readily available through an online portal, where users can view the information on a local, national and constituent level.
Closing the Digital Divide: Africa Success Stories
The rise of small business enterprises and tech communities has influenced the political and economic landscape of many countries. Governments are now held accountable by financial institutions for all the loans, grants and credits. Now governments are accountable to citizens.
ICT4D has become an indispensible tool for achieving development goals in Africa. It has created a window of opportunity for ‘out of the box’ tech entrepreneurs to leverage resources and improve their socio economic conditions at home. African leaders have caught-on to the importance of investing in ICT and have made it a priority to provide communication technology services to citizens. Rwanda is a great example of a country that is committed to its ICT goals, especially when President Paul Kagame won the 2006 ICT Award for the second time in a row in Accra, Ghana. President Kagame was selected as the best head of state in Africa in support of ICT policy, surpassing South Africa, Ghana and Tanzania. The success of the policy is attributed to Rwanda’s commitment to its ICT visions and “we in Rwanda have no intent to stand still as the rest of the globe moves forward at an ever increasing pace,” stated President Paul Kagame.
Speaking of moving forward, the technology boom in Egypt is also one not to be missed. International Finance Corporation reported that in 2011, out of 183 economies, Egypt’s “Starting a Business” ranking rose to 18 from 23 in 2010. Those who relied on social media to ignite the uprising in Tahrir Square are now creating businesses to jumpstart the economy.
Sustainability is a major theme in Africa entrepreneurship
Also exciting are the “made in Africa” solutions. These solutions tend to be more environmentally sustainable and operate better in the African context than products and services designed in “the West”. The South African government has recently commissioned the first large scale solar panel facility in the country, while Nokia Siemens network has launched an energy solutions program to help reduce network operating costs and power consumption through the use of renewable energy. Leading telecom operators in Africa, MTN and Vodacom, are also looking into renewable energy to power the stations in Sub-Sahara Africa.
South African green media company, Eco-Bin, transforms the use of advertising to promote eco sustainability. The ads on the back panel of the bins are used for educational purposes, while the E-lite material offers brand exposure all day, without using any extra power. Eco-Bin is a one stop shop for earth-friendly and sustainable products for South African communities.
The digital divide is closing in Africa through emerging tech- savvy nations and entreprenuers.
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