Economics and Business
The Introduction provides a framework for understanding technology change, and the ways in which it has been used by the author. It looks at how different players in the development field have sought to understand: how these changes work; some key terms like the digital divide; and the drawbacks of some of these approaches. It outlines the author’s approach to writing the book, drawing on twenty years of primary research and making extensive use of interviews, many of which were carried out specifically for the book. The book’s methodology is primarily historical, but draws upon materials from fields as diverse as economics, business studies, development studies, history, anthropology, ethnography, sociology, psychology, politics and cultural studies. On this basis, it provides a first draft of the history of thirty-five years of technology use in Africa, commencing from 1986.
This chapter describes how sub-Saharan Africans used airtime transfer to send cash to each other; the way in which this was noticed and used to create early, unsuccessful mobile money services; how the United Kingdom government’s the Department for International Development helped to finance M-Pesa; the unsuccessful early roll-outs of mobile money in West Africa and why they failed; and the hurdles mobile money start-up Paga faced when launching in Nigeria. Mobile money has enabled national, regional and international transactions as well developing a wide range of payment services (for example, loans, insurance and social payments). All of these have come together to create a developing payment ecosystem. The chapter concludes by looking at the future of mobile money and how industry ‘collision’ – where, for example, a mobile operator becomes a bank or a social media platform adds a payment facility – will play a part.
This chapter looks at the opening up of communications markets in sub-Saharan Africa to privately owned companies (known as liberalisation), and the privatisation of state-owned monopoly telecommunications companies, that brought large-scale investment into Africa to create mobile voice networks. This was both a political and a legal challenge. The chapter describes how market liberalisation and privatisation pitted the inefficient state telecoms behemoths against new mobile market challengers, with the latter introducing innovations like pre-paid calling. It describes how liberalisation in South Africa at the end of the apartheid era drew in international investment, and the licensing process in Nigeria that overcame corrupt practices. It concludes by looking at the uneven pace of liberalisation and privatisation up to 2004. The contrast between the struggles to set up a mobile voice operation in Zaire (described in the Prologue) and Zimbabwe illustrate the ‘old’ and ‘new’ ways of doing business in Africa. Whereas Telecel’s Miko Rwayitare and his partner relied on a relationship with a key politician, Masiywa’s struggle, and those of many others, was about due process and rules.
This opening section looks at Africa’s first mobile phone operation in Zaire (now Democratic Republic of Congo). In 1986 the company launching the service – Telecel – was far ahead of its time. The business was very much cast in the ‘old Africa’ mould, it relied on political patronage and became heavily dependent on politicians’ goodwill to keep operating. Its business model was one of selling scarcity expensively to elite customers. The section outlines the considerable difficulties that businesses operated under before telecommunications was more formally regulated.
This chapter looks at how communications became the ‘magic dust’ for development; the assumptions underpinning what its transformative effects might be; the debate over its appropriateness and cost-effectiveness; the shift from information communication technology for development (ICT4D) to mobile for development (M4D); the transition to a wider palette of technologies; and the long challenges to ICT4D in Africa: education and agriculture. The chapter opens with a description of how one of the world’s largest refugee camps (Dadaab) was connected to mobile voice and internet communications, and some of the changes it brought about, some transformative and others within the boundaries of existing cultures. The opening snapshot illustrates two themes of the chapter. Firstly, how development agencies’ operating costs and efficiencies can often be improved by using the same technologies used elsewhere, not least by connecting camps to fibre networks and delivering aid money directly to refugees by mobile money. Secondly, how development agencies use technologies and their use, or lack of use, by ‘beneficiaries’.
This chapter provides a history of the early wave of start-ups and the early ecosystem; a critical description of the ‘start-up ecosystem’ for tech-enabled businesses; the different types of start-ups and the investment they have brought into the African continent and the challenges facing home-grown start-ups. It also describes the deep challenges faced by international start-ups coming into the continent, using the examples of e-commerce and ride hailing. The opening section looks at how two entrepreneurs – one Kenyan and the other Nigerian – came together to create an ambitious, pan-continental payments company. It provides an unflinching look at the kind of obstacles experienced by sub-Saharan African entrepreneurs and how they have overcome many of them. It looks at how they changed what their company did as they reacted to market changes and how they sought to find a profitable niche.
This chapter looks at the emergence of digital life in sub-Saharan Africa and the failures and successes of the early pioneers, who largely drew upon diaspora users. It examines the challenges of local African content producers in a range of different fields, including: music and entertainment; news and tabloid media; and user-created content. Realising the growing power of online content, African governments have sought to control it through a combination of taxation and censorship. In addition, the business models for online content have proved difficult to develop, particularly for ‘traditional’ print media. Drawing on user research, the chapter concludes by outlining how those accessing the internet in sub-Saharan Africa use it in their daily lives. It identifies the impact of key barriers like education, language and literacy that hold back higher levels of usage.