THIS September, US billionaire Michael Bloomberg and US Secretary of Commerce Penny Pritzker will host the second US-Africa Business Forum, which aims at increasing trade and investment between the US and Africa.
The forum is scheduled for the week of September 19, coinciding with the 71st session of the UN General Assembly, and will build on the progress of the first such forum held during the US-Africa Leaders Summit in August 2014. Almost 50 African heads of state and more than 150 global CEOs attended that summit.
These days, forums like these are nearly a dime a dozen; China, India, Japan and Europe all have annual or biennial summits with African leaders.
Although the China slowdown and the global commodity price collapse over the past year or so have already done damage to many African economies, it would be wrong to conclude that they have given Africa a mortal blow, or even really shaken it in a fundamental way.
This is because many of the forces that have shaped the continent over the past decade and a half – since the infamous “hopeless continent” Economist magazine cover in May 2000 – are more subtle, discreet and nuanced; they have brought Africa to this point where everyone is scrambling to be a suitor. However, they are not acknowledged enough.
Sixteen years ago, war, AIDS, famine and poverty were the buzzwords around Africa, and aid was the key to fixing them all.
Today, business, trade and investment are the big words; entrepreneurship challenges abound, venture capital investors are roaming the continent looking for somewhere to plug their money, and numerous governments have launched specialised funds to give small businesses easy access to capital.
And although you might think Africa’s economic situation was turned around by a few wild cat investors and a booming global commodity market, that’s only part of the story; the bulk of the change has come from within Africa itself.
In this series, Mail & Guardian Africa will chronicle some of the African multinationals, entrepreneurs, leaders and artists that have shaped the 21st century Africa as we know it. The list is by no means exhaustive, but will give some outline to the question of how we got here.
The mobile revolution
There has perhaps never been anything as transformative in Africa in its independent history, as the mobile revolution. In 1998, there were less than 2 million mobile subscriptions on the continent, 86% of which were in South Africa, says data from the African Development Bank (AfDB).
But then, mobile quickly took Africa by storm, subscriptions grow by 2,000% in a decade; last year, there were more than 700 million mobile subscriptions on the continent.
The reason why Africa took to mobiles so fast has been theorised many times, and it mostly has to do with fixed landlines being so few that the continent leapfrogged that analogue telephony age altogether.
But the greater question is how that happened, and the impact that it had on how business in Africa is conceptualised and done today.
Much of it can be traced back to MTN South Africa, which started out as M-Cell in 1994. In 1998, the company acquired mobile operator licenses in Swaziland, Uganda and Rwanda.
By crossing borders on on a large scale, MTN gave a real shot in the arm to the idea of intra-African trade
Three years later, MTN cracked the deal of a lifetime when it got a license to operate in Nigeria, which would quickly become its largest market by far: 62.8 million subscribers at last count, compared 28.5 million in its home market of South Africa. By the end of 2015, MTN had 231 million subscribers, nearly a third of Africa’s total.
MTN did something few other companies had done before – it became the first true African multinational, demonstrating - with big boots on the ground presence - that large, profitable, home-grown business was possible on a continent that the world was dismissing as “hopeless”.
By crossing borders on that scale, MTN also gave a real shot in the arm to the idea of intra-African trade, which until that point, was something that was discussed excitedly in pan-Africanism conferences, but few private enterprises had actually taken it on in real life.
Mobile becomes tech
How Africa’s mobile story became a tech story can be traced back to Kenyan mobile operator Safaricom, which began operations in 2000, and quickly overtook then-leading mobile provider Kencell (which is now known as Airtel). Safaricom’s success had to do with an aggressive adaptation of mobile technology to fit into a local context.
One instructive moment was in the early 2000s; at that time, market leader Kencell was billing subscribers by the minute – so it didn’t matter if you spoke for 3 seconds or 59 seconds, the charge was the same.
But Safaricom did something novel and introduced per second billing, and with that, a curious phenomenon became widespread, called “flashing” or “beeping”, in which someone would call and quickly hang up in order to prompt the person on the other end to call them back.
If the receipient was quick on the draw and actually picked up the call, it was not so much of a catastrophe for the caller because you would only be charged for a few seconds, as opposed to a whole minute.
That small feature blew Safaricom far past its competitors – along with introducing recharge cards in small denominations, as low as $0.05, knowing that Kenyans tend to spend their money a little at a time, as opposed to buying a recharge card worth $5.
But the company’s killer app, of course, was M-Pesa, which tapped into much of the gaps already existing in the country’s social and economic infrastructure – a huge unbanked population, the majority in the informal economy; a culture of sending money to relatives upcountry; and many unemployed people willing to do the unsexy work of being mobile money agents. It changed the talking points about mobile and banking in the world.
“The bottom billion”
M-Pesa brought the poor into the formal sector, and with that, a telecommunications company became the greatest channel of financial inclusion for people long neglected by banks.
But its success, and global accolades, did more than that – it demonstrated that the poor in the developing world, or the “bottom billion” as they later came to be called, were not a mass of hopeless, destitute people who could only be saved by aid money. They were a market, with the capacity to turn a profit for a company willing to treat them as real people, whose choices were valid and legitimate.
Ushahidi, an open source software that is now used globally for information collection, visualisation, and interactive mapping, was also a large part of the start of Africa’s tech story.
Emerging from the disputed 2007 election in Kenya, Ushahidi collected real-time reports of violence on the ground and overlaid it on a Google map. It was a very useful crowdsourcing tool at a time when the mainstream media had difficulties travelling to disputed areas to get reports of what was happening.
Alternative way of life
But Ushahidi also did something else – it demonstrated an alternative to the police, and in a broader sense, and alternative way of organising society. For the first time, Africans had a way of reporting crime and warning each other on possible outbreaks.
It was an intelligence system that was free from state or other vested interest capture, and gave a sense of autonomy, and the hope of making something of oneself outside the formal economy that was far too small – and politically encumbered – to accommodate the millions of educated young people joining the labour force every year.
The combination of mobile money like M-Pesa, and apps like Ushahidi, would lead to an explosion of Nairobi’s – and Africa’s tech scene, and today, there are more than 70 innovation hubs around the continent, some functioning as incubators, others business accelerators, and others a combination of the two.
Suddenly, being an entrepreneur was sexy, as a generation whose parents had emphasised white-collar employment turned its back on the drudgery of office work, to bet on hunching over laptops and coffee, and try to make something big.
And with that, global investors smelled something good.