Championing the continent’s digital transformation is Smart Africa, an initiative by African heads of state that aims to bring millions more Africans into the digital economy. Delegates heard that while the growth of Africa’s contactless economy was one of the continent’s success stories, its reliance on 2G phone technology was a barrier to future growth.
Lacina Koné said: “The growth Africa has achieved in mobile money transactions is all done on 2G – 2G, not smartphones. This creates huge potential for the private sector to invest in technology.
“Smart Africa is a pan-African multilateral organisation with the sole vision to transform Africa into a single digital market by 2030. It aims to put [Information and Communications Technology (ICT)] at the centre of national social and economic development, improve broadband access, improve accountability, transparency and efficiency of ICT in Africa and, importantly, to put the private sector first in our ecosystem. Last, but not least, is the need to leverage ICT to promote sustainable development.”
In countries such as Rwanda, the COVID 19 pandemic had spurred the growth of the contactless economy, while underlining the need for affordable and reliable digital connectivity, a point underlined by Rwanda Information Society Authority’s Innocent Muhizi.
Innocent Muhizi said: “If we were to have, God forbid, another pandemic like this, the last resort we have is digital. But to be able to do that, there are three critical success factors [that are needed]. Number one, you have to have affordable, reliable connectivity … Number two you have to have affordable requisite devices. What good is it if you have connectivity, but you don’t have any tool to use it for? And the third one is digital skills. You might have connectivity you might have a smartphone, a smart device, whatever it is, but if you don’t know how to use it, it is no good.”
Another barrier to the growth of ICT in Africa is affordability, according to Eddy Sebera, whose company Mara Phones in Rwanda is the first manufacturer of smartphones in Africa.
Eddy Sebera said: “We all know that for Africa to become successful, there is a need for the digital transformation of the economy. And for that you require [affordable] devices. As manufacturers on the ground, what we are doing, starting next year, is to launch a sort of membership plan that allows consumers to acquire smartphones on a made-in-Africa device financing model that could be on a daily basis, a monthly basis, [depending] on their income generation. Then it will become accessible.
“Accessibility will not be seen in terms of how much it costs, but how much you are prepared, how much are you allocating, to acquire a device and to be part of digital transformation. That is where we [are] aiming.”
The role of capital markets in mobilising African private wealth to finance development was discussed in the afternoon sessions of GBF Africa. Citigroup’s Miguel Azevedo said he is encouraged by the increasing role the UAE is playing in developing a homegrown capital market in Africa.
Miguel Azevedo said: “It is very important to have solid stories, solid companies, very solid governance. Yes, it is important to create a community of domestic investors, but obviously that is easier said than done.
“In [the UAE], there is such a community and that has helped a lot. But I think what we are now seeing, what we are definitely seeing, is that the UAE and some of the fundholding companies from this country are increasingly looking into Africa. This is very different from what it was three or four years ago. I am extremely positive that the links between the two regions will increase significantly in the next few years.”
Paul Kavuma of Capital Principal Partners told delegates the significant uptake in the adoption of environmental, social and governance (ESG) criteria by African companies was making them more attractive to international investors.
Paul Kavuma said: “International players are looking for centres of excellence and they are coming to see these standards being adopted by us in Africa … We are now able to measure the impact of an ESG [programme] on the population, on the market, on gender, on incomes, on quality of life.
“We are now able not just to say: ‘We've done ESG, we’re great and we've got a Sustainability Index of Y’. We can now say: ‘In this area, 10,000 children have improved the quality of their education by 20 per cent over the last five years and we are monitoring it every year and reporting it.’ So the disciplines have now begun to evolve ... and that is important for African private equity going forward.”
GBF Africa continues and concludes tomorrow (14 October) at Dubai Exhibition Centre, Expo 2020 Dubai.
© Press Release 2021