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[Column] Mhlengi Ngcobo: How African entrepreneurs can use tech to solve continental problems
“If we do not create jobs for an extra 1 billion people in Africa by 2050, we’re sitting on a ticking time bomb.”- Fred Swaniker (Founder and CEO of African Leadership Group )
Today the African population stands at 1.3 billion (growth rate of 2.52% per annum) with population expected to double by the year 2050. Although Africa does have adequate resources to sustain the rapid growth in population we still lack advanced skills, global market visibility, manufacturing & processing infrastructure and access to basic technology.
According to African Development Bank only 30% of Africa has access to electricity and Africa has the lowest telephone and internet penetration (14% as compared to world average of 52%).
Only 18.6% of exports are manufactured products while 65% of the continental imports are manufactured products. Although these numbers may seem shocking and demotivating, the good news is that Africa has shown positive growth trend over the last decade. According to IMF and UN population projections, more than 50% of the African population will be living in the cities by 2030. The figure expected to rise to 62% by 2050.
This means that as African entrepreneurs we need to be at the forefront of innovation and proactively be looking at strategies that will solve the foreseeable problems that will arise.
The answer of whether African countries may be able to successfully deal with rural-urban migration and urban sprawl may lie in each country’s ability to focus in developing both rural and urban areas so as to curb overpopulation in cities.
By 2040 Africa is projected to have a working class population of 1.1 billion. This will undoubtedly create astronomical challenges in the cities. Therefore it is important that within the next decades we focus on problems that if solved would sustainably allow us to grow.
Some of the sectors which would ensure rapid economic growth and accelerate global competitiveness are:
Tech industry
Africa is currently the third largest mobile and smartphone market globally. By 2023, there will be 1 billion mobile subscribers in the Sub-Saharan Africa. This discards the misconception that African countries are lagging in tech or do not understand the tech industry.
Countries leading the revolution are South Africa, Kenya and Ghana. Just having access to a smartphone means better access to information. This will allow accelerated learning that will shift our minds to understanding the digital and technological space.
FinTech
Access to mobile phones will breach the gap not only in terms of communication but also in the ease of doing business within the African continent. Mobile phones have proven to be easy to understand for most users. M-pesa is a typical example of how access to money through mobile phone can transform country’s economy. Article by CNBC Africa highlights that increased access to mobile money in Kenya has enabled more than 185 000 women to move out of subsistence farming into business or sales occupation.
The advantage of Fintech is the ease to scale-up at an affordable cost. African entrepreneurs must invest in Fintech. As tech entrepreneurs our task is to think about how we can use Fintech to close the vast gap that exists between the formal and the informal sector such that both sectors can have access to incentives and resources that will allow them to grow at a faster rate.
Agritech
Part of building a successful business is to focus on what one is good at. For centuries Africans have dominated the agricultural space. However throughout this time innovation has been limited by skills and access to finance. Africa produces some of the finest coffee, cacao, maize, and nuts. However in the global market Africa contributes to 0.9% in the world GDP. African farmers have mastered the recipe but need to scale it.
Our role as entrepreneurs is to create companies that will enable these farmers to maximise their capacity and production. Through promoting methods such as vertical farming we will be able to eliminate the need to use vast farming land, reduce water usage, and get better quality on crops. We need to bring technology to the agricultural sector so that we can have sustainable solutions to food security. This area is important as it brings integrated solutions for both urban and rural population.
In conclusion, African entrepreneurs ought to invest in solving African problems as this is the only way that we can have a recognisable impact and role in the global market. There is no one who understands our problems better than we do. Hence no one knows better solutions than we do.
Mhlengi Ngcobo is the Founder and the CEO of CoffeeMM
Also Read:
[Startup Interview] Mhlengi Ngcobo, CEO, CoffeMM, South Africa
[Column] Mhlengi Ngcobo: How African entrepreneurs can use tech to solve current and future continental problems