[Column] Ray Chimhandamba: Africa’s donation to the Disruptor Economy
Any company worth its salt today has to include, within its strategy, sector or industry disruption on their list of threats. Disruption is everywhere and will happen in absolutely any industry. When one the leading global hotel business does not own a single hotel room. One of the leading global taxi companies does not own a single taxi, it is clear that no industry is immune to disruption. Think Airbnb, think Uber. Disruption is here to stay and will be part of business and part of our lives for a long time to come.
One has to ask, what role has Africa played in the disruptor economy and what role will it play in the future. Mpesa, the mobile money invention by Safaricom in Kenya, is one of my favourites. It changed banking in Africa as we knew it, for individuals, small business and big business alike. It allowed the unbanked, small businesses and big businesses to transact in ways they could not have before. Rural folk could now access money without making a trip. The revolutionary trend spread to the rest of the continent like wildfire. Kenya continues to be the global leader in mobile money today.
Africa’s challenges can be quite unique. Mobile money has literally transformed mobile companies into banks, without having to apply for a banking license. This is a disruption within the banking sector that is pretty similar to the hotel sector and the taxi industries that I started off with. And Econet in Zimbabwe has gone further by actually taking a stake an existing bank and rebranding it. Now they can sell mobile products and banking products in combination in a way that competition cannot match.
Zimbabwe is facing cash supply constraints. People are forced to use mobile money instead. This presented such an excellent opportunity to pilot cryptocurrency. Unfortunately the Reserve Bank of Zimbabwe does not recognise cryptocurrency as legal tender. Which is shame because it would have solved the cash challenges and at the same time would have given Zimbabwe a chance to pilot something that could have put the country back on the map, for the right reasons this time.
Disruptor companies like Google are investing more and more in technology start-ups in Nigeria, to grow the talent for coding and related IT fields. Google’s CEO, Sundar Pichal, visited Nigeria last year. He said that, one million people have been trained in Africa on digital skills. They plan to train 10 million Africans in the next five years on digital skills. The effects are quite visible. Nigeria now leads the Sub-Saharan Africa, in terms of online purchases, ahead of South Africa.
Kenya is the cradle of Africa’s ICT innovation. Consequently, Kenya actually achieved 4G technology ahead of South Africa. A combination of government policy and private sector innovation has catapulted Kenya ahead of the pack in the region. “Teams of skilled developers and programmers have sprung up in innovation hubs, incubators and accelerators across the country to build information and telecom solutions that capitalize on the country’s mix of challenges and opportunities.” It was seen as a strategy to absorb large numbers of well-educated unemployed youth and thus to contribute to economic growth, raising the GDP significantly.
According to Investing News , the Democratic Republic of Congo holds the world’ highest reserves of Cobalt. A whole 3 500 000MT of it. Australia is number two at 1 200 000MT of reserves. DRC is the world’s biggest producer of cobalt, supplying 50% of global demand. Cobalt is an essential component of rechargeable lithium-ion batteries. As innovation pushes towards electric cars and governments look to phase out petrol and diesel cars, cobalt is becoming a highly sought-after metal. In fact, some studies are predicting a 30-fold increase in demand by 2030. Tesla will require 7 800 tons of cobalt to make 500 000 electric cars per year by 2018.
Africa has made its contribution to the global disruptor ecomony, and will continue to do so, not only in the way it presents unique challenges that need unique solutions, but with also its wealth of minerals and the unique talents of her children. I look forward to seeing more of Africa’s contribution to the disruptor economy.
Raymond Chimhandamba is the Founder and Director of Handas Consulting.