Technology Trends that Will Define the African Tech Space in the New Decade
As we take on a new decade, it is only credible to anticipate ideas, products, individuals and companies that will most likely impact the tech industry significantly for years to come.
The listed ideas are not the product of any scientific process. They are the concurring views of a number of industry observers, hence, they are to an extent subjective and not in any way prophetic. In fact, one year is too long a time to spring up a lot of surprises.
And, I have avoided listing specific startups here. This is because great ideas/businesses will come and go. the principles and enabling technologies are most important.
Having said that, let us get to a couple of ideas, products and people that will influence the way we live in 2020:
5G: Africa is not Ready but Africa is Ready
On the global stage, 5G has been a point of focus in 2019. First, the new network will give users the speed and reliability they need to do heavy activities on the internet.
With growing interest in heavy-data reliant activities like HD movies streaming, AI and VR, the 5G is the answer to the question of the next experience.
Now, for Trump and China, it is about who leads the global tech race. For Nigeria, 5G is going to come upon us, like every other technological advancement, either we are ready for it or not.
The signs are everywhere.
Recall that Huawei launched free 5G courses at the South African Wits University and the University of Pretoria, thus laying the foundation for technology leadership and knowledge transfer.
In Nigeria, the Nigerian Communications Commission (NCC) approved the use of spectrum 26GHz, 38GHz and 42GHz for the trial of 5G services in the country. A few months later, MTN, the continents biggest telecoms service provider, kicked off its plans to launch 5G internet connectivity in Nigeria with a live demo in Abuja.
Observers have questioned the readiness of the continent to host the fastest network with its infrastructure deficit and sprawling (basic) internet coverage gap. But Africa is not going to be left behind in the 5G race.
You know why?
The growth potential in Africa is significant, too significant for business-minded global players to ignore.
According to the GSMA report, with an annual growth rate of 1.9%, the total number of internet subscribers in the globe is expected to grow to 5.8 billion in 2025. Of this number, 700m more people will subscribe to the internet for the first time.
Of this number, half will come from the Asia Pacific region and a quarter will come from Sub-Saharan Africa. In fact, Nigeria will be the fourth-highest global contributor (only after India, China and Pakistan).
We have the population, the business is here!
Logistics and Mobility will be the Game Changers
The signing of the African Continental Free Trade Agreement (AfCFTA) by country leaders was a major event on the African continent. It was celebrated, anticipated and dreaded in the same breath.
While we celebrate the potentials the AfCFTA and the possibility of Africa becoming a single business zone, we really forget the pain of navigating the continent.
On the one hand, it is not cost-efficient to have subsidiaries across African countries. Many who tried never succeed. The reason is regulations are unstable, political environments are unstable and the lack of infrastructure means that doing business on the continent requires companies to invest in basic amenities.
Hence, the left best option is to operate from the most convenient base and ship across. The challenge of moving goods across is crazy too. In fact, it is easier to ship overseas in most cases.
This challenge in itself will herald a new generation of unicorns: players in the African logistics game that have the structure to provide a supply chain service that is multi-country, of multiple divisions and end-to-end.
The most prepared player in this space that comes to mind is the Nigerian technology-powered transport company, GIG Mobility (GIGM). It is dominant in the Nigerian space, offers end-to-end delivery and has shown the capacity for quality delivery and expansion.
GIGM’s launch of a distribution hub in Accra, Ghana’s capital sets the template for an Africa-wide expansion. When this happens, it will be one of the major points of convergence for inter and Intra country trade, eCommerce and tech-enabled mobility.
The possibilities are huge!
eSIMs will Change the Telecoms Game
The ’embedded’ or ‘electronic’ SIM (eSIM) is built into a mobile phone, smartphone or tablet device at the point of manufacture. It is designed to empower consumers with the freedom to move between mobile phone carriers and countries much more easily.
Going by the response of Global giants to it (it has been tried in Apple iPads and Samsung Galaxy Gear watches in 2019), the eSIM is set to soon be a replacement for the standard physical SIM that we are used to. This new type of SIMs when released will eventually become commonplace globally.
How will this affect our lives?
Two ways: first the options will be limitless for users that will not be bound to any network that will not offer them the service quality of their choosing. More freedom for the user. And, by the way, the way telecoms service providers measure dominance will be measured using different metrics.
Second, aside roaming costs leaving the equation, the possibility of offering mobile-number dependent services like money lending, identity verification and mobile banking services to people across the borders will be limitless.
Technically, Africans will not be bound by borders, the same will be said of telecom services.
Banks and Banking: Mobile is no Longer the Problem
The last decade saw banks struggling to match up with Fintechs and mobile money vendors to get, keep and grow customers.
Especially in Africa, the infrastructural deficit has given a boost to mobile platforms over traditional banks. This is because the mobile network and the mobile phone and money can reach where banks dare not.
The last decade saw banks struggling to match up with Fintechs and mobile money vendors to get, keep and grow customers. Especially in Africa, the infrastructural deficit has given a boost to mobile platforms over traditional banks. This is because the mobile network and the mobile phone and money can reach where banks dare not.
In my opinion, the glory days of mobile money is over. Not that the platform will be phased out. But, it will not and never garner the sort of traction that it once did. The game is changed.
Banks are now contending with new foes: Finance platforms that are also lifestyle enhancing.
The difference between these guys and the previous mobile platforms is that they offer more than mere banking solutions. The previous mobile banking platforms offer basic services: save money, withdraw from savings, send cash, receive cash and pay bills.
The new players include lending platforms (e.g. Carbon), Savings and Investment (e.g. Piggybank), Crowdfunding (e.g. Farmcrowdy), stocks investing (e.g. Trove) and remittances (e.g. Transferwise).
The key to recognising these is that they are capable of holding cash people could have otherwise have placed in banks.
The headliner in this category is the Chinese Fintech platform, Opay. With about $170m funds in its pocket, Opay has aggregated a bunch of virtual and physical services, investing in heavy marketing efforts and expanding into more locations.
Opay is a bigger threat because it combines the features of a payment platform and one point call for many other services.
The next decade will not be about the impact of these platforms but about how the traditional banks will respond. Imitation is the style. In the last decade, the banks invented their USSD codes and mobile apps.
In the coming decade, African banks will sell food, offer mobility, support fit-fams, help customers invest in non-traditional finance instruments and close more branches.
They will follow the customers, everywhere they go!
Government Regulations: Firmer, not Effective
The past decade witnessed a great deal of needless government regulations and stifling decrees.
Recall the MTN’s N330bn fine by the Nigerian Government for Sim registrations in 2015? What we know is that MTN has paid the sum after months of struggle and a potential threat to an industry stronghold.
Just that you don’t think it is a Nigerian problem, recall that the same company was handed a GHC 100,000 fine for its failure to follow the regulatory directives by Ghana’s National Communications Authority (NCA).
The actual offence is inaccurate billing of subscribers for service bundles and issues with customer care lines.
Those are instances of African governments enacting laws that threatened businesses and innovations.
The last decade witnessed several decrees that truncated internet access for political reasons (Cameroon, Uganda etc.). The trend is not going to stop in the new decade. This is because political actors have not changed.
The Nigeria Data Protection Regulation 2019 by the Nigeria Information Technology Development Agency (NITDA) is an example of how African governments will respond to the questions of Data security, identity regulation, local content and citizens’ protection.
These regulations will be disruptive and firmer with time. But, they will not provide enabling environments. Because, that is not what they are meant for.
In sum: Lets Build for the Future!
A lot has changed since the beginning of the last decade in Africa and for the denizens of the continent. To be honest, the continent has just been a drag-along of the West and Asia. We adopted the technologies as they came but we did not develop our people and lands to make the best of them.
This will not likely change in the next decade because the structures that made this to be, have not really changed… Well, except something drastic happens.
On the startup scene, we celebrated a number of mundane things in the last decade: winning pitches, opening new offices, joining incubation programmes, winning awards and raising funds. Many startups died in the bid to look like the big cats.
I hope that in the next decade, our emphasis is laid on building companies that offer values people need, that make money for the investors, that employ people profitably and comply with the rules of the land.
We can celebrate cashing out but the new decade should be about building African companies that will outlive us. Let us get to the decade now.
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