Online Africa Weekly Top 10: mobile money, tech ecosystems, local content, solar power, and more
A few themes from this past week’s headlines are worth discussing in greater detail.
9 countries in SSA have more mobile money accounts than bank accounts
By now everyone knows the success of mobile money in Africa along with the fact that traditional bank accounts are less common in most of Africa than in Europe or North America. Still, we are always impressed by how half of the world’s mobile money accounts are located in Sub-Saharan Africa. In fact, a third of the global total (as of June 2013) was located in East Africa. And the number is only increasing as more Africans get mobile access. Needless to say, it will be interesting to follow the evolution of Africa’s mobile financial services as the decade progresses. Also intriguing is Safaricom’s new Lipa na M-Pesa product that allows merchants to accept payments from M-Pesa customers.
Recent statistics are still vague
Most statistics pertaining to African internet access contain great error and the methodology behind the numbers isn’t necessarily clear. Trends are often accurate however, especially if data is collected the same way on an annual basis. For example, the International Telecommunications Union (ITU) publishes a widely-cited annual estimate of internet access by region. In Africa, it is expected that 20% of the population will be online by the end of the year. This is double the share that was online in 2010. The group also issues an estimate of mobile broadband subscriptions by region which to no surprise finds nearly all of Africa’s internet connections are through a mobile access point. Still, empirical evidence would suggest a 20% internet access rate is rather conservative. Maybe one-in-twenty Africans has a mobile broadband subscription, but many more can access the internet using that subscription (think public access points and simply using a friend’s phone).
We had to briefly mention this as it is impressive how the hashtag first used by Nigerian Twitter activists on April 23rd spread globally over the past week. As a result of increased awareness of the activities of Boko Haram, multiple foreign governments are sending resources to help find the abducted girls. And countless other individuals and organizations are putting new pressure on the Nigerian government to tackle the complex issue of domestic terrorism. Even though there will always be debate over the effectiveness of “armchair activism,” no one can deny the success of the #BringBackOurGirls hashtag as a unifying voice.
Algeria as producer of startups
When someone thinks of North African entrepreneurship he or she will often first think of Morocco or Egypt or Tunisia. But, as Wamda asks, why is Algeria not included in this group? To start, these nations have more robust ICT infrastructure, better legal framework to create a business, and mobile internet access is more common. Access costs in Algeria are much higher than in places like Egypt and Morocco. Despite challenges (a lack of available funding is another), numerous Algerians are launching dating websites, classifieds platforms, and online media companies. The quality of these endeavors is mixed; monetization is scarce too. If Algeria is to create an environment ripe for startup growth, then a mentoring network that fosters communication skills needs to be created. More government-funded incubators are needed (many are sprouting up within universities). Failure does not need to be shameful.
90% of African internet content is hosted outside the continent
Keep in mind that number represents African content, period, and not content accessed by Africans. Still, considering Facebook is often synonymous with Internet usage, it comes as no surprise that only 10% of internet content accessed by Africans is hosted in Africa. That share isn’t about to change overnight, but ideally it would gradually shift to something like 30% of African content is hosted within Africa. Developments like carrier-neutral data centres, open peering internet exchange points, regional fibre links, and submarine cables are allowing more African data to be stored locally instead of in places like The United States or Europe. There’s nothing inherently wrong with having Africans store digital content on faraway servers. The benefits of African content delivery networks, however, are faster speeds and more reliable service when accessing web content.
Video content is ready to take off in Dakar, Senegal
The head of Google’s Senegal office points out how young African mobile users are consuming a mix of local and international content. He feels the Internet should be about all of their life and not just half of their live. In other words, he stresses the need for local video content. Shooting for high-quality bandwidth is better than slowly building medicore internet, in his opinion. His view that telling people they are too poor to get the benefits of the internet is ethically wrong stands out amid controversy that those without clean drinking water often spend money on mobile phones.
Solar power is a necessity for rural ICT access
A lack of reliable electricity is hindering internet access, business creation, and even the manufacture of phones in Nigeria. However, solar power is being utilized more and more to delivery the benefits of the internet to rural areas. Just last week, Samsung launched a Solar Powered Internet School in Rwanda. The school is actually a 40-foot shipping container complete with 25 tablets, printer, electronic board, server, internet access, and solar panels. In another development, a Canadian company has introduced a solar-powered laptop to the Nigerian market (retailing for USD620). Over in Tanzania, a company is running a solar-powered kiosk that can charge up to 20 devices at a time.
Mobile internet prices are declining amid new offerings
It comes as no surprise that Research ICT Africa finds the dominant mobile operator to usually offer the cheapest product. Many exceptions exist among the 42 mobile baskets in question (just look at Kenya and South Africa), but it makes sense that the dominant operator would have the scale needed to offer lower mobile tariffs. Notably, prepaid mobile voice/SMS prices continued to decline in South Africa (to USD4.85 for the cheapest product in Q1 2014) but still are more expensive than the cheapest in Africa (Vodafone Egypt and Zain Sudan have options from the dominant operator for around USD2.80). Moreover, it is interesting to note that a non-dominant (perhaps the second largest?) mobile operator in Sudan, Kenya, South Africa, and Madagascar offers an approximately 60% cheaper equivalent product than the dominant operator. Such a vast price disparity is surprising, but pricing doesn’t take into account factors like network coverage and reliability.
Are African tech ecosystems successful?
There’s been much fanfare around Nairobi’s success as “Silicon Savannah” and the leading African tech hub. Despite impressive developments in mobile banking (M-Pesa), agriculture (m-Farm), and professionalization of the general tech scene (through iHub), challenges remain. The tech ecosystem is not yet stable. No startup can match the success of M-Pesa. Creating a profitable company is extremely risky as funding is hard to come by. Ecosystems have to start somewhere, but they also require full government support and an influential community of investors (both foreign and domestic).
Sierra Leone fibre optic update
In 2013, the ACE cable landed in Freetown, Sierra Leone. There was great hype surrounding the launch of the international cable, yet internet speeds and internet costs have yet to improve for the consumer. Wholesale bandwidth costs have decreased from USD2700 and USD200 per Mbps. Unfortunately, ISPs have not reduced prices accordingly. The government, who has taken ownership of the project, is making progress with the project as a backbone cable is being installed across the country. Still, as Sierra Express Media opines, “companies who continue to cheat us with high rates for slow service will no longer be accepted as the standard.”