Hi, Quartz Africa readers!
Adapt or die
This month’s UNCTAD report on the global digital economy is especially insightful on the role of digital enterprises in Africa as it discusses their opportunities against a backdrop of tough international competition, weak physical/digital infrastructure and relatively limited access to capital and talent.
The authors frame their analysis of African digital enterprises as three strategic approaches. The first, described as customer-relationship scaling for local niche market, is used by business-to-business digital enterprises in areas including customized software development for local firms and supply chain management systems. This strategy works because the startups often don’t require huge capital resources before acquiring customers and can also adapt and learn as they go along. And yes, they could face international competition but more often than not they’re better placed to customize for the local market than much larger rivals.
The second strategy for African digital enterprises is to be a last-mile platform providing your service through a digital-analog relationship for instance like M-Pesa (East Africa) or Paga (Nigeria) agents helping to reach customers. It seems to work because African digital businesses operate in digital markets of low trust and capacity along with other infrastructure weaknesses such as poor bandwidth.
A third strategy is for African digital businesses to “exploit the distance-bridging potential of digital technologies” by targeting customers in developed countries with a localized offering. The idea is to turn the startups’ physical presence in Africa into an asset. The most obvious example of this is Andela (started in Nigeria) and Gebeya (Ethiopia). Both “take advantage of the incessant demand for software developers in developed countries and the low cost of labour in Africa.”
Even though the internet offers African digital companies an opportunity to reach the world with just a few clicks, the report argues localization and adapting to their market challenges is key to ensuring a competitive advantage on the global stage.
However, even as these individual businesses grow there’s a concern not enough is being done to build African digital infrastructure across markets—”the enterprises seldom, if ever, create digital building blocks for innovators elsewhere in Africa or beyond.” It was a point made during our Africa Innovators panel at the World Economic Forum Africa last week. “We can’t allow our continent to become a dumping ground for crap from other countries,” argued Bright Simons, founder of Ghana’s mPedigree. “To do that, we need to build supply chain systems, regulatory systems, and defend them. And we need to have the technology and the systems to defend them.”
— Yinka Adegoke, Quartz Africa editor
Stories from this week
Understanding why the Chinese and Africans are traveling to each others countries. As China-Africa relations have deepened over the past two decades, so has the direct airline flights between African capitals and Chinese cities. Beyond trade, Youyou Zhou looks at the trends shaping the movement between the two sides.
The race to save the northern white rhino from extinction looks hopeful. Fatu and Nanjin, two female northern white rhinos who live in Kenya, are the last two of their species anywhere in the world. A team of scientists and conservationists this week succeeded in creating two embryos, raising hopes the rare species could be saved in the future.
The worsening odds of an African getting a student visa to Canada. For Africans seeking for student visas to Canada, there’s a three in four chance their applications will be rejected. But as Yomi Kazeem explains, even though there’s no official change in policy with regards African students, the high rates of asylum claims from the continent is likely raising fears that student applicants might not return home.
South Africa’s Naspers has created the biggest internet company in Europe. Africa’s most valuable company, Naspers has listed its international assets on Amsterdam’s stock exchange and, in the process, created the biggest consumer internet company in Europe. The listing is part of South African media company’s long-term ambitions to transform into a global internet company on the back of successful bets on several internet companies outside Africa.
Africa’s Catholic Church faces competition and a troubled legacy even as it grows. Pope Francis’s seven-day visit across Africa, including three stops in Mozambique, Madagascar and Mauritius, was lauded by Catholics across the continent. But beyond conducting masses, the Pope’s visit was also a significant play to boost Catholicism on the continent which is growing slower than other denominations of faith.
Zimbabwe turns to Tesla batteries to keep its top mobile money player running as a power crisis deepens. Ongoing electricity shortages in Zimbabwe have had a far-reaching effect, leaving homes in the dark and hobbling businesses. Reporting from Harare, Farai Shawn Matiashe notes the country’s largest telecoms operator Econet is turning to Elon Musk’s Tesla to ensure its mobile money system stay online amid power blackouts.
Chart of the Week
South Africa faces bigger national problems than hosting foreigners. African migrants in South Africa have been blamed for taking jobs and committing crimes, leading to repeated violent xenophobic attacks that have seen some of them flee the country altogether led by Nigerians. But as Abdi Latif Dahir shows in these charts, the country faces much deeper socioeconomic and political challenges than African migrants.
The Dealmaker
Kingson Capital, a venture capital firm based in South Africa has raised a total of $100 million for its second fund (Kingson Fund Two) which it will invest in in up to 80 South African startups and businesses with potential to scale across Africa and to the US…Kuda, a Nigerian startup digital bank, has raised $1.6 million in seed funding as it aims to grow its offering of financial products to include consumer saving and peer-to-peer payments. Notably, the funding came from a group of angel investors led by Haresh Aswani, managing director of the Nigerian unit of Tolaram Group, a 70-year old conglomerate best known as the maker of the popular Indomie noodles.
Other Things We Liked
The downside to China’s agricultural investments in Africa. At the invitation of Uganda’s government, Chinese firms have taken up land across Uganda promising to create jobs and introduce much-needed technological efficiency. But their arrival has only created legal tussles and left locals disgruntled, as Peter Ford reports for The Christian Science Monitor.
Nigeria’s film industry is drawing global entertainment brands. In its infancy in the 1990s, Nollywood churned out cheap films ranging from bawdy comedies to morality tales about witchcraft and infidelity, writes Alexis Akwagyiram for Reuters but explores how the industry has evolved in recent years. The local film business now attracts partnerships with global and regional players including France’s Canal Plus and South Africa’s Showmax.
The efforts to revive Kwame Nkrumah’s ideology in Ghana. The socialist ideas of Ghana’s founding father and former president Kwame Nkrumah have been forgotten or dismissed by the major political forces today. But as Sam Broadway writes in Jacobin, there’s a growing movement to revive his ideas and integrate them into modern-day Ghana’s political reality.
ICYMI
The 13th Class of Harambeans. Nominate young African innovators who could benefit from angel investment, internships and scholarships if they join the next intake of Harambeans. Successful candidates will attend an annual symposium at Harvard and Bretton Woods in April 2020. (Oct. 15)
Obama Foundation scholars program. The fully-funded program brings rising leaders to study at Columbia University in order to deepen their skills and capacities to create an impact in their respective countries. (Dec. 13)
Keep Your Eye On
Tunisia’s elections (Sept. 15). Over 7 million voters will elect a new president among 26 candidates including prime minister Youssef Chahed and jailed media mogul Nabil Karoui.
Journalist Erick Kabendera’s trial continues (Sept. 18). A Tanzanian court will hear an update on the investigative reporter’s medical condition who appeared in court limping this week—a case that rights groups have criticized since Kabendera was first removed from his home in late July.
*This brief was produced while listening to Killin It by Patty Monroe ft. Bebe Cool (South Africa/Uganda). [Spotify]
Our best wishes for a productive and ideas-filled week ahead. Please send any news, comments, suggestions, ideas, more northern white rhino embryos and Canadian student visas to africa@qz.com. You can follow us on Twitter at @qzafrica for updates throughout the day.
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