The need for IT revolution in Africa

The need for IT revolution in Africa

It is Africans themselves who have the power to shape their continent’s transformation. Africa’s largest untapped market and its biggest opportunity for progress are right on its doorstep. In 2014, Europe’s export to other continent was 69%, while Asia was 52% and North America 50%. Africa had the lowest level of intra-regional trade, at just 18%,” writes Jacqueline Musiitwa.

The need for IT revolution in Africa

As Africa transitions from the margins to the mainstream of the global economy, Information technology is playing an increasingly significant role. Africa is booming and a lot of this economic growth stems from investment in technology. According to World Bank projections for global growth, out of the 20 fastest growing economies in the world, 11 are in Africa. Driven by increasing industrialization and the proliferation of free markets, the continent’s development can be seen via the move away from labour intensive economy to ones which largely rest on information technology, banking and retail. Although the African growth story is far from homogeneous, many agree that the continent’s prospects for the future largely depend on investment in technology.

Africa and West Africa specifically is a hotbed for technology start-up activity. Technology hubs in Africa include iHub and SwahiliBox in Kenya, Hive Colab in Uganda, Bongo Hive in Zambia, RLabs in South Africa, iSpace in Ghana, GODP and CCHub in Nigeria, and Hypercube Hub in Zimbabwe.

In a recent study conducted by BBC, in which the top three giants in the technology industry in the world were interviewed, enquiring why they invest in Nigeria; the respondents answered thus:

We believe research for Africa, solving Africa's grand challenges, has to be done on the ground in Africa-Dr Kamal Bhattacharya, IBM Research – Africa

"The key thing is… the great growth story of Africa" We know that financial inclusion is the big challenge. About 80% of the population has no access to financial services. There is the lack of access to energy, safe water, sanitation, food security. As scientists we believe that science and technology is an enabler to express your needs, it is an enabler to shape your own future. And this is why IBM is making this very significant investment into Africa, starting with Kenya. We've hired some of the top talent from all over the world, the African diaspora, people of African origin, also people who contribute to the growth of Africa, and we bring them all together here” Dr Kamal Bhattacharya, IBM Research - Africa

We believe research for Africa, solving Africa's grand challenges, has to be done on the ground in Africa and this is why we set up and made this investment. People ask us: 'Can you do African research from New York?' Yes you can. It is possible, you can do research from anywhere. But you will miss the mark... In order to capture value, and deliver innovation that leads to commercially viable products that impact people's lives, we have to be here, in the local ecosystem."- Dr Uyi Stewart

These comments show the following:

- Africa’s economic development requires massive development in information technology

- There is a demand for information technology and innovation in Africa

- There is a short-fall in supply of information technology and innovation

- Africa is the world’s new technology hub

Over the past decade, driven by its meteoric economic growth, China has quietly but steadily increased its foreign direct investment (FDI) in Africa. In the five years from 2003 to 2008 alone, Chinese investment in Africa shot up by a CAGR (Compound Annual Growth Rate) of 105 percent, from $75 million in 2003 to $5.5 billion in 2008. The same went for imports and exports between the two, which grew from $10 billion in 2003 to more than $50 billion in 2008.

Why is China investing so much in Africa?

Unlike the West’s investment, China’s ravenous appetite for African labour and resources is not tied to countries with good governance. The only two criteria for Chinese investment in the continent appear to be stability and profitability. This has allowed China, which still only accounts for 3 percent of the FDI in Africa, to grab the lion’s share in some of its larger FDI recipient markets, such as Sudan, Congo DR and Nigeria, all of which score low in world democracy rankings. Zimbabwe, long a thorn in the side of the western world, recently made the yuan its official currency, effectively making it an economic vassal state of China.

In all this transformation, one cannot overemphasize the role information technology hubs play; seeing as they’ve become irremovable elements in creating successful businesses and likewise, entrepreneurs. Today, they are major go-to places, both for investors who seek investible startups and individuals seeking to nurse their great idea to fruition.

There are countless projects helping to put Africa on the map. But what has really made the continent the darling of the tech sector recently is the extraordinary growth of tech hubs – places where coders, hackers, entrepreneurs and just plain geeks can come together to create new digital products and set up businesses.

But Africans need to start focusing on utilizing her resources to create standard technology to solve problems peculiar to the continent.

Africans must learn and show they can do it for themselves. We are in danger of repeating the mistakes of the past and wasting an opportunity that now presents itself if we decide to stay num.

Let us learn from India, How did they do it?

India is the world's largest sourcing destination for the information technology (IT) industry, accounting for approximately 67% of the US$124-130 billion market. The industry employs a workforce of about 10 million.

India’s highly qualified talent pool of technical graduates is one of the largest in the world. This large pool of qualified skilled workforce has enabled Indian IT companies to help clients to save US$ 200 billion in the last five years.

More importantly, the industry has led the economic transformation of the country and altered the perception of India in the global economy. India's cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the US, continues to be the mainstay of its Unique Selling Proposition (USP) in the global sourcing market.

The IT industry has also created significant demand in the Indian education sector, especially for engineering and computer science.

Some factors contributing to India’s success in IT

• Abundant human resources

• Low cost of labour

• Government intervention

• Focus on IT education

• Massive private investment

Let us learn from Sweden, How did they do it?

With almost as many tech startups as Silicon Valley, Stockholm in Sweden is fast becoming one of the global IT hubs. Internationally successful startups such as Spotify, Candy Crush and Minecraft creator Mojang all hail from Stockholm. We know about giants like Volvo, Saab, Ericsson, IKEA, H&M, ABB and Husqvarna, but how did a bunch of Swedish startups – from Skype, Spotify, Linux and Mojang to MySQL, Wrapp, Klarna, Memeto and LifeSum – get so BIG?

A Creandum report showed that €2.6 billion (around £1.9 billion, $2.9 billion) is being generated per year from Nordic tech company exports, with more than half of this coming from Sweden alone. In this nation of nine million people, something is making tech tick.

Some factors contributing to Sweden’s success in IT

• Free education

• Ease to start up

• Insentive for start ups

• Strong engineering culture

• Fast Internet

• Real innovation community

• Government intervention

WAY Forward?

Africa can become the Biggest Tech Hub, if only we can learn, Plan, Act and Act now….

- There is demand already

- We are rich in human reserves

- We are Intelligent

- We have no excuse

Then we need:

• ICT Education

• Massive private investment

• Deep IT policy reforms

• Creation of the right environment

• Government support


Source: Legit

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