'The true measure of M-Pesa's - and Safaricom's - big success is how we transform lives'

Bob Collymore, the chief executive of the extremely successful African telecoms giant Safaricom, says the region's answers lie within

A few months ago, I visited Barsoloi, a small town in northern Kenya about seven hours away by road from here.

Barsoloi is a picturesque town that is home to just over 15,000 people. With its grand vistas and sweeping plains, Barsoloi captures the very essence of what most people think about when they talk about “Africa”.

However, despite the fact that there are now more mobile phones than toilets in Africa, this little one street town was virtually cut off from the world until January this year; when Safaricom put up a telecommunications mast in the area.

The base station created the town’s first ever connection with the outside world since it came into existence.

But the real story lies in what happened after the mast was put up, which is what I think captures the true essence of “Africa”.

In the absence of a power grid, a number of entrepreneurs had set up stations around the tower, offering mobile phone charging to residents for a small fee.

In the absence of a way to communicate security issues, the residents formed SMS groups that kept both them and the police informed on incidents.

Most tellingly, in the absence of a means to communicate with bigger medical centres, the town’s sole dispensary would often run out of essential medicines and health workers would have to walk to each one of their patients homes to check on them.

Out of absence came opportunity, and this is part of what inspired Safaricom to put up a mast in an area that will never give us any return on investment.

Mobile unlocks our human potential.

By changing tens of millions of lives for the better, mobile can, and has, transformed whole societies and reshaped our world just as significantly as it has in Barsoloi.

The story of how Kenya became the leading mobile financial player has been told many times. To date, M-PESA has transferred over Sh Kshs4.18 trillion, or the equivalent of 40% of Kenya GDP.

This phenomenon has baffled investors, and brought many knocking on Safaricom’s door to find out what the elixir of success tastes like.

I like to attribute much of M-PESA’s successes to the inherent nature of Kenyans, which is to provide for relatives who live in rural areas by sending them money.

There was another factor at work though – in their book Portfolios of the Poor, a trio of Princeton researchers found that 85% of low-income and emerging consumers (such as the 80% of Kenyans who live below $2 a day) are not the hopeless destitute that many dismiss of being unable to drive transformative growth.

They are hard-working people who are typically engaged in 16 financial transactions at any one time—saving, borrowing, transferring – it is these often over-looked people who have powered the growth of solutions such as M-PESA.

Out of absence comes opportunity.

Out of opportunity must come commitment.

Without commitment, the new Africa will not succeed. And commitment must be measured by more than how much we spend.

Over the last 14 years, Safaricom has grown to become not only Kenya’s largest mobile service provider but also the biggest IT services company in the region.

True success
But the true sign of success is not whether we are the biggest or the best - it’s the responsibility to ensure that accomplishment is supported by sustained commitment and is used to transform lives at every level.

This responsibility forms the foundation of sustainable growth. To bring this closer to home, I want to focus on three areas that are critical to continued success of our fast growing technology ecosystem: opportunity, people and partnerships.

To the first point, we live in a land of opportunity.

Six of the 10 fastest-growing economies in the world are in Africa. Consumers have more disposable income, there is a bulging middle class, more than half of our citizens have Internet-capable devices, and increasingly sophisticated networks are coming up such as the 4G platform we recently launched.

Today, McKinsey says that Senegal and Kenya, though not as large as South Africa’s economy, have Africa’s highest iGDPs. iGDP stands for the amount that the internet contributes to a country’s GDP. As you can see on the chart, Kenya’s iGDP is rated at 2.9%, higher than Brazil or Chinas.

With about three-quarters of nearly 1 billion Africans already using mobile phones, the acceleration in “mobile money” services is expected to achieve more than US$160 billion in transaction value by 2016.

What this translates to is increased opportunity to grow our Silicon Savannah. It means our innovators must create locally relevant solutions that meet the needs of our people and transform their lives.

A good example of this is a Kenyan start-up known as GuideRig. GuideRig aims at engaging mobile users in an interactive manner to help guide them to various locations using their devices.

GuideRig uses voice commentary and intelligent proximity triggering to notify you when you are near, arrive or leave your destination, and is already being used in the tourism and academic industry and is already being examined at a global level as a best practice.

This leads me to the second point I would like to cover: People.

One of the most critical ingredients for a successful information economy is providing mentorship and training for the people who create these solutions.

Notably, there has been a commendable increase in the number of incubator and accelerator hubs across Africa that offer advisory services, mentorship, R&D facilities, investor access and exposure-demo platforms. Innovators need to take advantage of these to learn and grow as well as have visibility of what is going on to avoid duplicating or creating copycat products.

Economic dividends
Spaces like South Africa’s JoziHub, mLab or the iLab at Strathmore University in Kenya will be critical in extending our ability to maximize on the growing talent pool in the innovation ecosystem and deliver the economic dividends that the sector promises.

Partnerships hold the key to the continued success of the African innovation story.

One of the key learnings for Safaricom over the years has been the fact that without collaboration – and that includes working with fellow sector players, government or start-ups – you are merely innovating for yourself.

Increasingly, we are seeing more emphasis on private-public partnerships in this area and I believe this is a positive development as it formalizes and deepens our ability to fast track the growth of our innovation ecosystem.

It is equally crucial for governments and citizens to commit to buy from local startups and SMEs so that we can create more jobs and boost economic empowerment opportunities.

We are part of an interconnected world that is increasingly driven and shaped by our connections. Because of this new connectedness, the world is already seeing that Africa is already leading from the front when it comes to innovation.

While the future looks bright, we cannot forget the vast digital divide that separates citizens such as those in Barsoloi from more advanced centres.

Democratizing data so that these gains become available to all must remain our key priority.

As Africans, we must commit to continue to empower each other so that we build on that lead by creating truly transformative solutions for the continent.

—The author is CEO of Safaricom Limited

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