Despite Africa’s Infrastructural deficiencies, stretching from healthcare, e-commerce, logistics and transportation to financial services, we can’t deny or overlook the increase in the number of emerging and innovative companies solving the continent’s most difficult problems. This is reflected in the growing amount of capital that they are attracting, which is on track to hit $3.5 billion in 2021
Even with all this growth, Africa is yet to unlock its full potential. The continent is still the last frontier in many aspects, including talent and the building blocks of the digital economy. That is why we’re looking to bring attention to our community and beyond the recent developments in the African tech market and its hidden opportunities.
In November, we hosted a Clubhouse session with Bankole Makanju of Afrobility Podcast, Samora Kariuki of the Frontier Fintech Newsletter and our Research Principal Manager Peter Kisadha where they talked about the hidden opportunities in the African tech market.
Here are the key takeaways from the conversation
Listen to the full conversation here.
Identifying opportunities in the ecosystem
Bankole believes that one thing that enables companies to grow is obsessing about the problem and figuring out multiple ways to solve it rather than focusing on the solution. This makes identifying the right opportunities in the ecosystem necessary. But, what are the best ways to identify these opportunities, understand Africa’s problems, and solve them with technology?
He points out applying blockchain technology to solve various unknown problems rather than understanding the core problems and concluding that the technology is the right solution.
“One of my favourite quotes is that ‘an idea or a fact is not worth more because it is easily available to you, you need to do the work,” Bankole says. “You should also be very well aware of availability bias that you are more likely to weigh something more because you work in healthcare, and you think that is the major problem,” he adds.
Essentially, make sure that you understand the problem by talking to the people you are looking to solve this problem for.
The areas technology can be used to solve African problems
The optimistic Samora believes that all industries in Africa are in the position to be improved by technology. He cites an example of technologies such as blockchain, which he thinks is an exciting ecosystem because there is nothing to be disrupted by it; instead, players are building from scratch.
Samora’s view is backed by opinions that argue “blockchain can boost trade in Africa” as it is increasingly considered a relevant technology in Africa’s emerging markets. In Ghana, for example, it was announced earlier this year that the country is prioritizing blockchain projects in a new regulatory Sandbox.
Samora, however, also notes that Africa isn’t a consumption-driven economy, recommending that the continent needs to increase consumer spending as a percentage of its gross domestic product. However, this requires us to ask important questions around how to increase GDP and incomes and make it smoother for Africans to earn more.
“I think as a thesis, that is like one of the most powerful things,” Samora says. “One of the powerful elements around Tesla is it created a whole network that started earning revenues that hadn’t existed before, and so there was this decentralization of income,” he adds.
Important lessons from Jumia
Jumia recently released its third-quarter financial performance that created mixed concerns for people around the world. But, according to Bankole, one important lesson that should be taken from Jumia’s story is how powerful the art of storytelling is.
With storytelling, Jumia positioned itself as the ‘’amazon of Africa’’, even though some argued that they were far from this. This positioning enabled them to attract capital and several resources, which have enabled them to execute on the opportunity.
Samora agrees that Jumia has done an important job for the ecosystem. However, he highlights another lesson that we can learn from Jumia: how they have understood the African consumer, infrastructure, and how to execute in the continent. This depth in understanding is necessary, especially for various strategies, including going to market.
Listen to the full conversation here.
We are looking forward to having you at our next session. Please follow us on Clubhouse to get more to join more insightful conversations on technology in Africa.