Africa's mobile boom powers innovation economy

Young African girl talking on mobile More than half of Africa's 1.1 billion people now own a mobile phone

Innovation is happening all over Africa in all different sectors, from education to energy, banking to agriculture.

Technology of Business

"It's the best kind of innovation - the problem-solving innovation born out of necessity," says Toby Shapshak, editor and publisher of the South African version of Stuff magazine says.

As Technology of Business embarks on a month-long series of features exploring some of these innovation stories, we kick off by looking at Africa's main technology trends and the challenges facing this vast 54-nation continent of 1.1 billion people.

Upwardly mobile

You cannot talk about Africa without talking about mobile. Most innovation involves mobile devices and wireless technology in some way or another.

It's not hard to understand why.

Installing a traditional fixed-line telecoms infrastructure made no economic sense across huge, sparsely populated, and sometimes difficult to cross terrains.

The mobile phone - particularly cheap "feature phones" such as the Nokia 1100 and the Samsung E250 - offered sufficient functionality combined with long battery life.

In a continent where access to electricity is still patchy, particularly in non-urban areas, battery life and energy-frugal applications are key. This is why so many essential mobile services in Africa are based around the SMS texting platform.

Robot traffic cop Innovation everywhere: Robot cops monitor traffic in Kinshasa, Democratic Republic of Congo
Smartphone scanning eye Mobile health: A Kenyan woman has her eye scanned by a diagnostic smartphone app
Solar streetlamp in Mali Mobile solar streetlamps made from bicycle parts allow people in Mali to work in the cool of the night

Information is power, and before mobiles came along, access to data was limited for millions of Africans.

But by the end of 2014 more than 600 million people - about 56% of the population - are likely to own a mobile phone, with some researchers estimating penetration could reach 80%.

When you consider that just 1% owned a mobile in 2000, the rate of growth seems all the more astonishing. There are now more than 35 mobile network operators in Africa busily extending their base station networks to improve coverage.

Foreign companies are waking up to the commercial opportunities this presents.

"Large, multinational consumer goods companies are now looking for ways to reach their customers and employees in Africa through mobile channels, and are viewing South Africa as a gateway to the rest of the continent," says Tielman Botha, South Africa country lead for Accenture Mobility.

Pocket bank

Even though nearly two-thirds of these phones will be accessing 2G and SMS networks rather than the faster 3G and 4G, the range of services they can access is impressive.

Whether it is farmers accessing local market prices for their produce to arm themselves against profiteering middlemen, or nurses, doctors and patients accessing medical monitoring and data services, mobiles and wireless devices are transforming lives.

But it is as a payments platform that the mobile has really blossomed in Africa.

Vodafone and Safaricom's M-Pesa mobile payments system, launched in 2007, now handles about 1.15 trillion Kenyan Shillings (£7.72bn) a year - that's 35% of Kenya's gross domestic product.

Phone showing M-Pesa payment The M-Pesa mobile payments system how has more than 18 million users worldwide

The concept sprang from resourceful Africans using and swapping mobile airtime as a form of currency.

M-Pesa is now expanding across Africa, and has also launched in India, Afghanistan and Romania, while other mobile network operators have launched their own mobile banking services.

People can pay for solar lighting, water, groceries and other goods, and also receive credits and person-to-person money transfers via their mobiles.

Such payment systems - and the digital audit trails they leave - are also proving useful for governments tackling tax evasion and corporations combating fraud.

Internet for all?

In Nigeria, Africa's most populous country, about 42% have some form of internet access, according to the country's Federal Ministry of Communication Technology (FMCT).

But with broadband costing about 30% of a household's income, and half the country's 167 million people living in unconnected rural areas, take-up of high-speed services is understandably slow.

Mrs Omobola Johnson, FMCT minister, believes information and communication technology (ICT) is "the fourth pillar of the Nigerian economy, contributing about 7.8% to the country's GDP".

Her department is working on a broadband strategy that aims to achieve 30% penetration by 2017 through public-private partnerships, in the belief that a 10% increase in broadband connectivity could lead to a 1.3% increase in national GDP.

Satellite shot of the earth showing light pollution This 2012 Nasa satellite image of the earth reveals the scale of Africa's electricity deficit

While mobile phone operators, such as Unitel in Angola, are beginning to roll out high-speed cellular broadband, this does require users to upgrade to more expensive smartphones and tablets.

So Microsoft's 4Afrika initiative is trying another way to bring broadband to rural and other unconnected communities.

It is using so-called TV white spaces, those unused parts of the wireless spectrum usually used for television, to provide internet connectivity.

Radio signals in the TV bands travel over longer distances than other radio signals and are less prone to interference from obstacles in their way. This means fewer base stations are needed, reducing costs.

'Skills gap'

Lack of widespread broadband internet is one problem; lack of education, training and skills is another.

"There's a disconnect between employers and educators - a skills gap," says Njideka Harry, president and chief executive of the Youth for Technology Foundation, based in Owerri, Nigeria.

"We fundamentally believe that technology should be a basic human right - accessible and affordable and available to every human on the planet."

African kids waving Can tech help fill the education deficit? About 21 million African children do not attend school

About 21 million children are not in school across Africa, according to the United Nations Educational, Scientific, and Cultural Organisation (Unesco).

In the Central African Republic there can be 86 pupils to a classroom, while schools in other countries can lack water, basic sanitation and electricity. Textbooks are often in short supply, as are qualified teachers.

While technology would seem to offer some answers, electronic libraries, digital textbooks, online exam marking and distance learning projects can only flourish once faster wireless connectivity has been rolled out.

"Without this connectivity we will never be competitive - ever," says Farouk Gumel, partner at consultancy PwC Nigeria.

'Made in Africa'

As and when such ubiquitous connectivity is achieved, young people also need to be taught how to use these technologies and understand their potential, Ms Harry believes.

Her academy teaches "technology, entrepreneurship and life skills to young people" and is looking at the potential for "3D printing to transform the African continent from an 'Aid to Africa' to a 'Made in Africa' model".

By using low-energy, low-cost kit, such as the Raspberry Pi computer and inexpensive laptops and tablets, "our young people are creating an ecosystem of relatively inexpensive, yet innovative, technologies," she says.

Projects by her entrepreneurial students include domestic security systems and LED lighting programs.

Elephants silhouetted in Kenya Technology is also being used to protect African wildlife from poaching

"Technology is also enabling more people to create, record and edit their own content then distribute it cheaply via Facebook and Twitter," says Chichi Nwoko, chief executive of Hey What's On? - a media company based in Lagos and New York.

Home-grown companies like Jumia, Konga and Iroko TV are beginning to give global brands like Amazon and Netflix a run for their money, she believes.

Innovation is happening in other sectors, too.

For example, satellite mapping, GPS tracking systems, civilian drones and mobile cloud-based databases are helping farmers monitor their livestock against disease and theft, track pesticide residues in their crops and study weather patterns.

For Africa, it seems, necessity may be the mother of invention, but technology is its father.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    08:51: BANK OF DAVE Radio 5 live

    Dave Fishwick, the minibus salesman who founded the "Bank of Dave" is on Radio 5 live. What does the banking market need? "What we desperately need out there is challenger banks," he says. What's also needed is "tighter control of the bigger banks to prevent greed and corruption," he adds.

     
  2.  
    08:36: MARKET REPORT

    The fallout from Tesco's results yesterday continues today. The supermarket is the biggest faller on the FTSE 100 Index so far this morning down 2.3% to 167.05p. European markets are down generally. The FTSE 100 is down 0.45% to 6390.17, Germany's Dax is down 0.40% to 9011.29 and France's Cac-40 has fallen 050% to 4136.95.

     
  3.  
    08:23: PEARSON EARNINGS
    penguin

    Pearson's chief executive John Fallon says the firm's £50m cost-cutting programme is on track and "momentum in digital, services and emerging market education is building, which will drive a leaner, more cash generative, faster growing business from 2015."

     
  4.  
    08:06: SPIRIT PUBS TAKEOVER

    Could this be the beginning of a bidding war? The pub chain has said it has rejected a takeover proposal from Irish cider maker C&C Group today. Spirit is already in talks with brewer and pub owner Greene King about its proposed £723m takeover offer. C&C, the maker of Magners and Bulmers, has until 20 November to announce a firm takeover offer.

     
  5.  
    07:51: PEARSON EARNINGS

    Pearson has reported flat underlying revenue for nine months to the end of September and a 1% fall in in what it calls headline growth for the period. It blames the strength of sterling against key emerging market currencies for the fall. Penguin Random House has performed well in the third quarter, it adds without giving detail. It says the integration of its businesses is "progressing well and is on track to deliver benefits in 2015 and beyond".

     
  6.  
    07:38: HIKMA WARNING

    Hikma Pharmaceuticals says it has received a warning letter US Food and Drug Administration after an inspection at its manufacturing plant in Portugal. "In the letter, the agency raised issues related to investigations and environmental monitoring at the facility," said the firm, which is taking the letter "very seriously."

     
  7.  
    07:26: TSB EARNINGS
    The TSB logo

    Impairments - that is, bad loans - fell to £23m from £32.2m, said TSB. Loans rose 7.7% to £22bn compared to a year ago, but fell from a peak of £23bn six months ago. TSB won 9.7% of all new or switched bank accounts, it said, adding £500m of deposits.

     
  8.  
    07:18: PEARSON FINANCE CHIEF STEPS DOWN

    Robin Freestone, chief financial officer of Financial Times and Penguin Random House owner Pearson has announced he is standing down after 10 years with the firm, including eight in his current role. He will probably leave the firm in 2015 after a successor has been found, said the firm.

     
  9.  
    07:08: TSB EARNINGS

    TSB third-quarter profit before tax fell 14% to £33.1m compared with the same time a year ago, after operating expenses rose. But revenue swelled 18% to £199m

     
  10.  
    06:54: EU PAYMENT Radio 5 live

    Sarah Hewin of Standard Chartered on 5 live says the payment has to be made in the next few months. That could mean more borrowing, she says.

     
  11.  
    06:41: EU PAYMENT Radio 5 live
    British Prime Minister David Cameron

    Sarah Hewin of Standard Chartered is explaining why the UK has to pay an extra £1.7bn to the EU on 5 live. "The UK has been doing better since 1997 than we thought and that's resulted in this extra payment. The Netherlands will pay more, while France and Germany get a rebate."

     
  12.  
    06:29: AMAZON RESULTS Radio 5 live

    Paul Kavanagh of wealth manager Killik is talking about Amazon's loss-making results last night. "It begs the question about what is happening here with this strategy. The shares fell 11% in after hours [in the US]." Investors may be growing tired of ever-more sales expansion with little profit to show for it, he tells 5 live.

     
  13.  
    06:20: CHALLENGER BANKS Radio 5 live

    Paul Kavanagh of wealth manager Killik says it's difficult for banks to persuade customers they offer something new. When a challenger bank succeeds, the larger banks often take the best ideas, he says on 5 live.

     
  14.  
    06:12: CHALLENGER BANKS Radio 5 live

    Steve Davies is still on 5 live. He says challenger banks are forcing their larger competitors to think more about the customer and service - think Metro bank opening on Sundays. Competing on rates is more difficult, he says. TSB results coming up later.

     
  15.  
    06:03: CHALLENGER BANKS Radio 5 live

    Steve Davies of accountants PwC is on 5 live talking about so-called challenger banks. Can they challenge the largest high street banks? "They have to be able to offer something a little bit different," he says. "The challenge is around innovation," he says. Customer is key, he adds.

     
  16.  
    06:00: Howard Mustoe Business reporter

    Good morning. Get in touch via email blizlivepage@bbc.co.uk and twitter @BBCBusiness.

     
  17.  
    06:00: Matthew West Business reporter

    Morning folks. It's Friday, we're nearly at the weekend. But before that, TSB kicks off bank earnings season and Shire has financials out as well. There's also some service sector data but the big bit of data is the first estimate of third quarter GDP. We'll bring you it all as it happens as always.

     

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.