This year marks the 60th anniversary of Africa’s independence. There is the feeling, however, that the continent still remains in the shadows of the Berlin Conference. Although 60 years may seem like a long enough period for countries to find their way and emerge as regional leaders, today, Africa remains the poorest and least-developed continent in the world.
Hunger, poverty, lack of clean water and electricity, terrorism, local ethnic and religious conflicts, corruption, disease outbreaks — this was Africa’s story till the early 2000s. During the last two decades, however, the continent has made remarkable progress and embarked on a road to a brighter future. The improved political situation, ambitious economic plans, and much better living conditions have paved the way for Africa’s much-needed revival.
Although today some of the widely-known problems are still around, their overall effect has been widely mitigated. What is left for Africa to solve may still be a long-enough list, but thanks to technology, entrepreneurship, and globalization, the future of the continent seems brighter than ever.
Africa’s painful past and hopeful future
The scars of Africa’s painful past are still evident today. One of the significant problems tormenting the continent is the unstable and opaque political environment. Most countries have gone through two liberation periods in their recent history. First, they had to shake off the effect of Europe’s colonization. Next, there were local dictatorships that had to be dealt with. Today, it is the battle for establishing fully-functioning and transparent democratic governments to rule in the long-term.
This is critical as countries with weak democratic foundations have proven to be the perfect environment for corruption to flourish and penetrate local governing and private structures. The problem is so severe that in 2015, Transparency International estimated that approximately 75 million Africans had paid a bribe during the past year. What is more concerning is the fact that the majority had done so just to get access to basic services that should otherwise be publicly accessible.
Despite African leaders’ commitments that 2018 would have been the year of anti-corruption, Transparency International’s Corruption Perceptions Index (CPI) paints a gloomy picture as the region’s average score was just 32 out of 100.
Another major problem for Africa’s future is the high level of unemployment. Although the average unemployment rate for the continent is 6.1%, according to data from the World Bank, there are countries like South Africa and Botswana where the numbers reach 27.0% and 17.9%, respectively. The more concerning fact is that, according to the International Labour Organization, the youth unemployment rate on the continent exceeds 30%.
The most urgent problem that Africa has to solve, however, is improving the healthcare system. Although a lot has been made in the recent years, Africa remains the continent with the worst medical treatment and living conditions. A direct consequence is the life expectancy of 62.8 years. In comparison, the life expectancy for EU citizens is 81.0 years. But the limited access to adequate public healthcare services isn’t the only reason for this. Such is also the poverty, high prevalence of AIDS, local instabilities, violent conflicts, lack of clean water, electricity deficiency, and more. As Dr. Ola Brown, one of the continent’s leaders, states in her TEDx speech, every single dollar invested in the healthcare system will make a double return in terms of economic output.
Although all these major issues remain on the table, one thing is clear — Africa has the perfect prerequisites to turn things around and capitalize on its potential. The shift to democracy and external initiatives like The Bloomberg Media Initiative Africa, intended to strengthen the media industry and promote market transparency, are fundamental steps that will ensure the long-term growth and sustainable business environment.
In terms of economic growth, the continent is already doing wonders. The positives are a direct consequence of local efforts and international partnerships and growth programs such as the Everything but Arms (EBA), the Africa-Europe Alliance, and the US’ African Growth and Opportunity Act (AGOA). Although the continent is home to 34 of the 48 least developed countries, today, 6 out of the ten fastest-growing economies worldwide are African countries with Ghana on top of the global ranking. Also, according to the World Bank’s 2019 Doing Business index, 5 of the ten most improved countries are in Africa.
Another key positive that should be acknowledged is the massive increase in Africa’s population during the last four decades. Consequently, today it is the continent with the youngest population. In some countries, more than 50% of the citizens are aged 25 or younger.
With the right investments, concentrated efforts, and sustainable development programs, a fact like this can do wonders for Africa’s future.
Technology as the main building block
Africa’s unexplored potential, fast-growing and young population, and the horizon of opportunities present start-ups with a solid foundation for skyrocket success. Local entrepreneurs acknowledge the continent’s problems as issues they are responsible for solving. Furthermore, business leaders are driven by a deeper purpose — to disrupt the status quo and commit to long-term success that will help bring Africa on the world’s innovation map. African entrepreneurs recognize technology as the greatest tool for building resilient business models that can help satisfy the continent’s needs.
- Financial sector
Kenya is one of the countries that have acknowledged the benefits of blockchain’s adoption and its potential to streamline niche sectors like digital payments, governance structures, agrotech, etc. Factors such as the population’s high literacy rate, good existing infrastructure, high connectivity, and welcoming business climate have helped the country establish itself as Africa’s leading blockchain innovation hub.
As a result, Kenya became a birthplace for M-PESA, a mobile money transfer service provider that was key to solving the problem of sending money to unbanked relatives living in rural areas. The good example was followed by other start-ups such as Paga, a mobile payment company based in Nigeria, focused on tackling the problem with the lack of access to basic financial services in the region. In 2014, for example, more than 66% of adult Africans didn’t have a bank account. Thanks to companies like Paga, which managed to sign up more than 8 million users in less than ten years and currently processes over $2 billion in payments, the number of unbanked African citizens dropped massively.
Other businesses like Dala and Wala have also embraced the mission of making financial services available to as many people as possible. By running blockchain-based solutions, they have helped many Africans make free-of-charge transactions. The results are staggering — today, Africa has more than 120 million active mobile money accounts. This remarkable progress is projected to add more than $300 billion to the continent’s GDP by 2025.
Let’s now focus on a sector that is in a way bigger need for improvements than financial services.
The health sector in Africa presents some worrying statistics. Africa accounts for more than 65% of all deaths related to pregnancy and childbirth on a global scale, while one child in 9 dies before the age of 5, simply because of the lack of diagnostic tools. The reason — if you look at a satellite photo of Africa at night, you will find it hard to distinguish the mainland from the ocean. Due to the concentration of big cities in particular areas and the lack of electricity all over the continent, two-thirds of its territory is covered in darkness. The regions that are off the grid suffer from healthcare issues as the hospitals find it impossible to store medicine or vaccines.
Once again, technology comes to the rescue with plenty of successful start-ups turning things around already. The British start-up, Babylon Health, for example, operates in Rwanda with more than 600 000 clients. For less than a dollar, Rwandans get access to a phone consultation with a doctor, which helps improve disease prevention and treatment efficiency.
Leading tech companies like Philips and IBM are also helping improve Africa’s medical sector. The Dutch electronics firm, for example, has designed a portable Doppler ultrasound machine that needs no power and helps reading out a fetus’s heartbeat patterns. This methodology has proved to be much more efficient when compared to traditional Pinard horns. A trial test in Uganda, for example, revealed that more than 60% of the scanned patients needed urgent treatment. The innovative solution now comes as a solar panel-powered pack with another useful tool — a mobile chest monitor that tracks babies breathing and prevents pneumonia.
Another inspiring and highly-valuable medical device is the Cardiopad, which tries to solve the problem with the lack of cardiologists on the continent. To put in perspective how serious the issue is — in Cameroon, there are currently 60 cardiologists for a population of 22 million (or one cardiologist per every 366 666 people). The Cardiopad works as a remote examination device that conducts a standard ECG test and records the data on a server to help with the prevention and further treatment of cardiology problems.
IBM, on the other hand, employs AI to fight malaria and drug-resistant tuberculosis. The positive example is followed by the medical charity Médecins Sans Frontières which also helps diagnose malaria with the help of smartphone cameras.
The lack of professional medical staff that the healthcare industry in Africa suffered from for many years is now tackled with the help of robot doctors. The Helen Joseph hospital in Johannesburg, one of the busiest HIV clinics on the continent, accepts more than 750 patients per day. Due to the lack of medical staff, robot pharmacists are proving to be a real help in bringing treatment to as many patients as possible by prescribing and packing drugs. This has helped reduce the waiting times in the clinic from 4 hours to 20 minutes.
Other companies like Zipline have developed specialized drones to process blood, medicine, or industrial cargo deliveries to hard-to-reach regions. These types of solutions help with the safe and timely delivery in military zones, rural areas or for emergent situations, while at the same time cut transportation costs.
Another remarkable project healthcare project is Flying Doctors Nigeria — a medical emergency service with about 20 charter aircrafts, specializing in air ambulances, medico-logistics services, medical infrastructural development, and medical training services.
- Talent development
Thanks to technology, Africa is now making the right steps towards reducing youth unemployment as well. The first step in the process, proper education and self-development is taken care of start-ups like Kytabu — a company that makes it possible for students and teachers in underprivileged schools or low-income regions to lease textbooks on mobile devices.
There are also companies like the Uganda-based Fundibots, focused on improving technical education among young students by bringing robots to classrooms.
The positive trend continues with high-tech firms like Andela, working with leading global corporations, and helping them find talented programmers. Andela recruits African developers, trains them, and connects them with employers from all around the world, mainly US tech giants. In the long-term, such a policy will result in the establishment of a talented community of developers and business professionals, who can become the spine of Africa’s future. Indirectly, the chance to earn a higher income by working for companies from abroad results in more spending power among young Africans, which further contributes to the local economy.
Africa’s only direction is forward
Africa’s story is a remarkable one. The innovations are born out of necessity, not out of the capitalistic driving forces. Local entrepreneurs have grown up in poverty, hunger, and violence, which have proven to be the most efficient motivators. The majority have seen and been through the worst, and their only trajectory is upwards. Foreign investors and companies also contribute actively to solving Africa’s leading problems. The fruitful combination of local talent and inspiration with international know-how and resources paves the way for Africa’s sustainable growth.
The continent, with its abundance of resources, growing young population, and continuously improving business climate is a perfect investment opportunity for foreign companies to invest and expand their operations there. And with the promising economic growth in some African countries, it may be just a matter of time before we see the next leading innovation hub.
This story was first published in Issue #2 of the International Investor magazine.