Why Elon Musk And Jack Dorsey Have Big Plans For Africa
Dorsey, the founder and CEO of Twitter and Square, told people he was moving to
Africafor a few months in 2020, it raised some eyebrows in Silicon Valley. After all, tech companies
haveconsistently looked to China and India when they talked about reaching vast, untapped populations who are slowly coming online and needing smartphones, cloud computing and mobile payment infrastructure. But it turns out in 2020, that sounds a lot more like
Africarather than China or India. For years, it was known derogatively as the dark continent, while colonialism and general ignorance about
Africa's people skewed perceptions. Even today, if you listen to American media cover
Africa, you mostly hear about famine, Ebola and violence from militant groups. And while countries like Burkina Faso, Mali and Niger
havehad to deal with a recent spate of extremist violence.
Africais a big continent and much of it is open for business. Today,
Africahas more than 600 active technology hubs, organizations with the local address, facilities and support for tech and digital entrepreneurs. That's up from 442 in 2018. Big tech companies from the U.S.
havenoticed and are beginning to focus more and more on
Africaas the next big market.
Africais home to 54 countries and a population of more than 1.3 billion people. And according to the U.N.'s world population prospects of 2019, that's expected to explode to 4.3 billion by the start of the next century. The
also remains young, very young. The median age in 2020 is projected to be under 20 years old . In 2019, s ix of the top 15 fastest growing economies in the world were projected to be in
Africa, according to Focus Economics. The list includes Ethiopia at one, Rwanda at two, the Ivory Coast at five. Tanzania at 10. Senegal at 12, and Ghana at 15.
African startups last year reached $2.02 billion in equity funding. That's a new milestone, according to global investing firm Partech
Africa's 2019 report on VC funding for
African startups. Ben Lynette is a venture capitalist in San Francisco. His company, Lynette Capital, invests in
African startups. One of Lynette's investments is in Flutterwave, which provides payment solutions for companies like Uber. I'm really optimistic from a general standpoint that tech enabled startups can be the driving force that has historically been lacking at building a lot of basic infrastructure, allowing people to get into the middle class. Last year, the
African Continental Free Trade Area was formed with the goal of creating a single market on the continent and dealing with the ongoing issues like infrastructure and bureaucracy. The agreement couldn't
havecome at a better time since many believed the continent is poised to take off. According to the London based think tank Future Agenda,
Africa's total GDP could at 2.6 trillion this year and GDP growth is projected to accelerate to 4.1 percent by 2021, according to the...
African Development Bank. With a growing middle class, that number could easily head higher as the continent tackles its lack of critical infrastructure. Only 43 percent of the population has access to electricity and internet penetration on the
African continent is only about 40 percent as compared to the more than 60 percent of the rest of the world. Infrastructure is one reason, but another is cost. American tech companies know this. But so does China. The country's Belt and Road Initiative demonstrates how serious China is about helping
African countries develop the roads and travel infrastructure necessary to grow businesses. In 2017, there were more than 200000 Chinese citizens working under contract in
Africa, according to the Johns Hopkins China
AfricaResearch Initiative. And they worked on ports, pipelines, power plants and railways. At the same time, a number of U.S. technology companies are working to gain a foothold in
Africa, and some of the locals are trying to make it easier. David Osei is the CEO of Silicon Accra, a 60 acre technology park. He's building in Accra, Ghana. The park will include residential and retail units as well as recreational facilities. It will also house the
African Institute of Mathematical Sciences. The park will open in 2022, but he's already talking to large American tech companies about locating there when it's fully complete in 2023.
Africans, we love Americans. because when an American to do a partnership with you...
they leave knowledge behind. They leave you with experience, they leave you with empowerment. I'm not saying we don't get that with the Chinese necessarily. But I'm saying that we are yet to
havethat model from the Chinese. We see the Americans come in willing to participate, willing to train. So we want Americans to come to the party or else they will come and realize that there's a little bit too late because
Africais growing exponentially. At the same time, companies need qualified workers to fill positions on the continent. But that is improving as well. Charles Laba is the head of GMEA, a Ghana-based tech group that works with fintech, manufacturing and oil industries. Laba has worked with tech giants like HP and Cisco for the last 25 years. And he says when he first went into business in 1990, finding qualified people was difficult. That's beginning to change, though. And so they actually quite a few other people in Ghana who
havecome in, who
havebeen educated outside and come back to Ghana. The end result is a larger pool of qualified people and increased dependence on technology. The challenge about coming to
Africais really finding the right partners who is going to collaborate with you . You know we still
haveour challenges in terms of the policies and in terms of creating actually conducive business environment, which actually respects the rule of law. Big tech understands that, a nd it's already begun to maneuver. In November 2019,...
Twitter founder and Square CEO
Dorseyannounced he would be moving to
Africa. Analysts who cover Square weighed in on the move, saying
Africawas untapped and underserved, that the region was the future of payments, and that
Dorsey's move was forward thinking.
Jack, I think, is looking at
Africaas a huge growth vector for the company. I think if you ask him, his perspective will ultimately be around users and revenue. And then lastly, I think he's got a view that he has to figure out some way to decrease the hiring pressure here in San Francisco. And so by creating a more remote workforce, and he may lead by example. In fact, mobile payments and social media are how big tech hopes to gain traction on the continent. Online retailer Jumia offers a cautionary tale about opening a consumer facing business in
Africa. After much fanfare, it became the first
African tech firm to list on the New York Stock Exchange in April 2019 . But the company has hit a rough patch and has been forced to close offices in Cameroon and Tanzania . After hitting a peak valuation of near $4 billion dollars, Jumia's market cap has fallen to just over $440 million. U.S. tech companies know the potential in
Africa, and they're well aware of the potential pitfalls. Still, many of them are making significant investments on the continent. Microsoft arrived in
Africain 1992, but it wasn't until 2013 that it launched the 4Afrika Initiative, its business and marketing development...
engine on the continent, From health care to agritech to fintech. There's really been quite a bit of investment that has been landing across the continent, but also just innovation, local innovation that is taking off as well in different markets and different markets are different stages as we look at it. But the opportunity for scalability busy of some of these solutions is actually quite there. Microsoft is looking to promote its cloud technology, which it says will provide a number of benefits. Entreprenuers will be able to deliver new services to market faster. Businesses will become smarter and make more data driven decisions. Governments will be more transparent, efficient and accountable, which improves local climate for business. And every citizen will
haveaccess to key services. But you
havecritical infrastructure, and more than one tech giant is focused on providing it. Facebook's biggest problem of reaching all of its users is getting them on the internet cheaply. So what are they do? They help enable startups that are building cheap internet. To that end, Facebook, Airtel Uganda and BSC worked to complete a 770 kilometer network in northwest Uganda to bring mobile broadband to some 3 million people. In South
Africa, the social networking company worked with Vast to connect with the underserved communities to Wi-Fi. And in Nigeria, it teamed up with Main One to build out 750 kilometers of fiber. Last year, the Wall Street Journal reported that...
Facebook was in talks to lay an underwater cable that would go around the entire continent and drive down the cost of bandwidth. The project is known as 'Simba' for the Lion King character. Meanwhile, Google has its own plan, called Equiano, named after the Nigerian-born abolitionist and writer who was a slave when he was a boy. The plan to connect Portugal to South
Africa, the first phase of the project is slated for completion next year. Google also has a number of initiatives across
Africa, including Google for startups, which announced last September it had started its first
Africaimmersion cohort. It was a twelve week program meant to share expertise with tech startups from
Africa. One of the companies they worked with is called Kwara, which provides online and mobile banking services for financial institutions and members. Amazon has been in
Africasince 2004, when the company opened its development center in Cape Town. The center focused on networking technologies and customer support software. In 2015, the company continued to expand with an office in Johannesburg. Two years later. Amazon introduced AWS Direct Connect to
Africa. Available in every country in
Africasince 2016, Netflix is now programming to its audience. Queen Sono is a crime drama series coming in February 2020, and it's its first
African original series. It features South
African actress Pearl Thusi. More
havebeen commissioned from South
Africa, Zimbabwe and Nigeria. In...
late 2018, the countries in
Africasigning an agreement to develop the
African Continental Free Trade Area, an agreement the director of the International Trade Center called a game changer.
Africais taking off and it's a good time to be involved in the transition of
Africa. As 54 different countries to
Africa, as one continent on trade. This year we are launching the
African Continental Free Trade, which is a very big deal because all 54
African countries agreed to now
havea trade. Now, this is not just a trade deal on paper. But it's going to be trade, That is going to transcend groups and services, intellectual properties. In November 2019, The
African Union met in Ethiopia to discuss its goals for its member states. The A.U. also wants to promote continuing education in
Africaby creating a virtual university that will allow students to access from anywhere in the world. And it's also adopted cybersecurity as a flagship program to ensure that these technologies are used for the benefit of
African individuals, institutions and nation states by ensuring data protection and safety online.
African leaders, it seems, also know the importance of Internet connectivity and are taking steps to improve it.
Musk, who's from South
Africa, isn't going to wait. In January 2020,
Musk's company, SpaceX, launched another rocket containing 60 Starlink satellites.
have700 in orbit by mid year and to create a mega constellation designed to...
provide low cost Internet to underserved regions like rural America and