IN THIS WEEK’S BOTTOM LINE
CONTRIBUTED BY KIRK SWART| OVERBERG ASSET MANAGEMENT
AFRICA TECH HUB: Africa is fast becoming a notable player in the global tech space. A factory belonging to the Mara Group situated in Kigali, the capital of Rwanda, successfully launched 2 made-in-Africa smartphones in October.These phones, called the Mara X and Mara Z, come with high-tech features such as fingerprint sensors.
Kigali is branding itself as a tech hub. The city is home to several tech incubators, a Carnegie Mellon University engineering campus and local start-ups that design cashless payment systems. Mara has also opened a plant in South Africa (Durban) and is investigating the possibility of opening another in Nigeria.
FURTHER ON THE CONTINENT: In 2019 Visa invested $200 million in Nigerian firm Interswitch, an electronic payments and digital commerce company. OPay, a Lagos based mobile payment services company, raised $120 million from international investors.
In May 2019, Microsoft opened offices in Kenya and Nigeria for engineers specialising in artificial intelligence, machine learning and mixed reality while Google opened an artificial intelligence lab in Ghana. In November 2019, Jack Dorsey, CEO of Twitter tweeted that “Africa will define the future” and that he will return to Africa for at least three months in 2020.
AFRICA'S CLEANEST CITY: Of all African countries venturing into technology, Rwanda stands out. Kigali has been given the honour of Africa's cleanest city. At the 2018 World Economic Forum meeting in Davos, the head of the UN Environmental Programme went even further by referring to Kigali as the “cleanest city on the planet”. It has long been a dream of Paul Kagame, the country's president, to make Rwanda the Singapore of Africa.
LACK OF RED TAPE AND EASE OF DOING BUSINESS: Rwanda promotes itself to technology companies as a country with little red tape. Rwanda ranks 38th in terms of ease of doing business according to the World Bank. This is better than the Netherlands, India and Brazil. South Africa is ranked 84th. According to the CEO of Awesomity Lab, a Rwandan software development firm, it takes around six hours to start a business. The IMF forecasts Rwanda will grow its economy by 8.5% in 2020.
ELECTRIC VEHICLES IN KIGALI: Awesomity Lab designed Move, a taxi service app that includes driverless and chauffeured options for a fleet of electric vehicles in Kigali. The app was designed in partnership with Volkswagen, Siemens and the Rwandan government.Assisting businesses such as Awesomity Lab to grow, Rwanda is targeting 100% electricity access by 2024. Currently it is mostly the urban areas that have access to electricity.
SOUTH AFRICA AND KENYA TECH: In South Africa, Cape Town has a diverse tech industry ranging from Aerobotics (drones for farmers) and SweepSouth (Uber for domestic workers) to listed giant Naspers, which owns a big stake in Chinese tech company Tencent.Start-ups in Kenya include AB3D, which turns e-waste into 3D printers and Ushahidi, a crowdsourcing platform that has been used for election monitoring in India and Mexico. These countries are full of entrepreneurial spirit.
SUMMARY: The challenges that Africa face are all well known. A lack of basic services, access to electricity and high levels of poverty have all hindered the development of the continent. However, there is a new wave of entrepreneurial tech savvy companies that will change the continent’s potential.Tech hubs in Kigali, Cape Town, Lagos and Nairobi will help drive the continent’s growth in the future. It appears Africa has moved beyond only attracting foreign aid to attracting foreign investments. Companies such as Microsoft, Volkswagen, Naspers, Siemens, Google, Visa and many more have all decided to invest in Africa.
Read More: Overberg Market Report 18 February 2020