I have highlighted in previous articles here and here how Information Technology has empowered, transformed Africa for the better in the last 10 years alone. Innovation, entrepreneurship and private sector involvement has emerged as a favoured route out of poverty for many development organisations and funders. Its potential to reduce unemployment, tackle societal challenges and stimulate economic growth has sparked significant interest and investment. The immense disruptive power of IT has been witnessed especially in the mobile sector, where considering there are 1billion cell phones in use in Africa, and it has been said that a home in the most poor parts of our motherland is more likely to own a phone than have a toilet, is a pretty safe bet in terms of investment. Africa is ripe for a magnitude of innovative homegrown solutions. Technically, the number of 26 year old African tech billionaires that made their money from focusing on mobile, should be greater than what it is now, zero.
In this month’s news in Kenya, Taxi drivers are angry and threatening violence on the Uber drivers who’ve effectively monopolized the cabbing market due to their low prices. People were asked on social media to save a little empathy for the poor cab guys who’s business was ‘stolen’ by technology wielding foreigners while they still have loans to pay and taxes too (Uber is an Irish company). Of course, Kenyans on Twitter have no chills to spare and said that the nature of disruption is that it is swift, cold and ruthless. “Woiyee is not a business model.” The question was then asked: The taxi industry has been in jeopardy for a while, cabbies have been exploiting their customers and the pain had been felt of people abandoning them for cheaper transportation even before Uber showed up. If they’d been suffering slow business before, why hadn’t anyone come up with solutions? Tech solutions to fight off Uber even before they landed? Why aren’t Africans developing mobile solutions to universal problems on the large scale?
- Education/ Expertise Gap
Education is one of the most powerful instruments for reducing poverty and inequality and lays a foundation for sustained economic growth. Inequality in Africa, especially in urban areas, is on the rise. 33 million primary school-aged children in Sub-Saharan Africa do not go to school. 18 million of these children are girls. Only two-thirds of children who start primary school reach the final grade. Although literacy rates have greatly improved in Africa over the last few decades, approximately 40% of Africans over the age of 15, and 50% of women above the age of 25 are illiterate. Africa loses an estimated 20,000 skilled personnel a year to developed countries.
Between illiteracy, gender based discrimination and brain drain, the prevailing unhealthy macroeconomic environment, created over the last 2 decades, has had significant impact on ICT education and expertise levels, adversely affecting the quality the current labor force.
- Outdated government policies
Technological innovation, often fueled by governments, drives industrial growth and helps raise living standards.
Rural areas are less connected than the urban, and are “information-poor.” There is a high demand for information in rural areas but considerable costs are associated with information search. The digital divide in Africa maps the gap between those who have access to electricity in the first instance and those who do not. In most of the countries analysed, more than half of the households have access to electricity. In Ghana and South Africa, more than two-thirds of households are connected to the grid. Tanzania, Uganda, Rwanda and Ethiopia have not reached 20 per cent of households connected to the electricity grid.
It’s been said that we shouldn’t vilify corruption as much as we do, that revolutions do more to hinder growth and development than theiving government officials.
I take the approach of corruption as a barrier to innovation, but still maintain that not all kinds of innovative activities are affected negatively by corruption. Innovative activities that require use of public property (like permits, licenses) might get affected differently by corruption. Innovative activities that do not require use of public property exclusively need not get affected by corruption. Corruption and Innovation: A Grease or Sand relationship?by Prashanth Mahagaonkar.
I happen to be of the opinion that, while yes, companies that engage in corrupt practices like the bribery of government officials and bypass tiresome bureaucracy leading to faster innovation do cause growth, the overall effects of a corrupt system are actually hindering it. Why? Let’s look at the broader picture here. A corrupt government leads to poor education, healthcare systems, a bigger poverty gap, malnutrition, almost non existent security and a populace that cares nothing for law and order thus only perpetuating the cycle of impunity. Brilliant individuals born into this system do not get to go to school and learn the technical skills required of a labor force in technology. Some die before adulthood due to preventable and treatable sickness and still others through violence that goes unpunished.
For those lucky enough to escape unscathed, they enter excitedly into the tech space only to find the bureaucracy they so feared isn’t even an issue because those mandated to issue them the licences and other public resources they require to operate, are in the pockets of fat industry players. Their hand greased to prevent any competition, they block out bright young minds that would have done more for the economy than the corrupt who run it.
If corruption happened only in the issuance of tenders, licences and permits then we’d probably look the other way (don’t we already?) and let it continue at will because growth would foster innovative technology. Innovation requires much more than just illegally acquired papers though. The tech labor force requires a great number of entreprenuers and the very existence of tenderprenuers is a threat to that.
- Colonial mentality
How does it look when white investors team up with a privileged non-black Kenyan against the black founders of the company? Are there racial politics at play? Are black founders incapable of running startups? Currently, the Angani platform is being run by foreign consultants, which says a lot about the faith of the management team and board in Kenyan tech talent. Bringing in Shape Blue is an admission of lack of technical capacity by the current team at Angani and an admission that they lack faith in the Kenyan ecosystem as a whole. How does a team you invest in (we can assume because of their capability and the integrity/potential of their product) suddenly become incompetent post investment? How does this even make sense?
:Brenda Wambui in her article Corruption In The Silicon Savannah, a commentary on why and how the cloud services company, Angani, died a painful death after hostile take over by its white and non black Kenyan investors.
True, it may seem like the conversation on why start ups fail is deteriorating into not so thinly veiled accusations here. Yes, investors aren’t in the social justice business, they are not activists, and if a company is being mismanaged they have every right to do everything within their power to fix the company. What I am addressing here is the assumption that black Africans do not have the capacity to run global companies. That investors come in already with this mentality leads many to change management of start ups as soon as they land, before they have a clear understanding of the market/local context. When ‘community champions’ become demons, tearing up its soul because of ego, blocking sales, sabotaging projects killing companies because they don’t approve and their word is law, we begin to wonder if the Silicon Savannah has been colonized by a few seemingly philanthropic ‘saviors’.
For these ecosystems to flourish there is a need to build both hard tech skills and softer business skills. But that’s not all. Regulatory frameworks are often inhibitive, while high data costs, language and literacy problems and a lack of simple payment mechanisms create barriers to market penetration. Meanwhile, unreliable and costly electricity and transport, slow internet and cumbersome bureaucracy all increase the cost of doing business. Under such conditions, it is hard to keep budding entrepreneurs motivated. With no immediate income and a lack of awareness about technology’s far-reaching benefits, getting a tech start-up off the ground can be an uphill struggle. Would you blame any Kenyan techies for choosing a career at Google over starting their own companies?