I know that many of you are interested in starting an ICT business in Africa. But are you aware of current trends? I would love to share some insights with you. As always, my article will focus on the actionable way forward for aspiring entrepreneurs and first time entry into Africa by individuals or SME’s – we will leave the Million Dollar market information to government and the media out there, they are pretty good at keeping up with it.
What makes Africa such an intriguing market for ICT is the enormous rise of mobile phone connectivity and that enables easier interaction between companies and their customers. We can expect to see new trends such as peer-to-peer (P2P) applications, on-demand services, and ICT infrastructure sharing driving business models unique to the African context. But we can also expect an Internet revolution to take place soon, and while the establishment of submarine cables continues, most countries on the continent have seen an enormous increase in Internet penetration and broadband speed.
Now let’s get cracking – today I want to focus less on the aspects of running an online business or telecommunications company and tell you more on the ICT solutions you can provide in Africa on a profit. So where exactly are some gaps on the continent loudly calling for you ?
1. Business 2 Business (B2B) solutions
When I visited Kenya’s renowned tech hub, the iHub, last year I met with some members of the management team and was told that they see a clear shift in focus. In short: Apps are somewhat out and B2B solutions are in. I was told that in the beginning everyone wanted to build apps – having your own app was somewhat cool. But now Kenya’s tech community at iHub is focusing increasingly on B2B solutions, because the demand for that is growing.
This is really a trend, which we see in other dynamic ICT markets in Africa as well, in fact, add to that: Business 2 Customer solutions. Both are becoming more prominent and the need for solution, expertise, and guidance is huge.
With the big rise of e-commerce in countries like Nigeria, Kenya, South Africa, Egypt, and a very visible new peak of interest in Morocco, Uganda, and Tanzania we also see an increased demand for ICT solution providers who offer their expertise and products around entirely new business models. The E-commerce space is one to follow, and demand that ICT experts could fill reaches from online purchasing and payment systems, to logistics, to customer services (CRM).
With growing competition among businesses operating in Africa’s growth market, it is a trend we can absolutely expect to continue and to grow even faster.
2. Africa has excellent software developers…..but there is a huge need for many more
I met Betty Enyonam Kumahor during the Homecoming Revolution Expo in London in 2014. I remember how she took the stage at the conference to tell us how she left her posh office and position in one of the top law firms in the US to move back to Nigeria and open her own IT Consulting firm, ThoughtWorks. Two years later she employs 120 people…! Isn’t that amazing? But not only that: Betty and her team have developed world class software and one of the systems was used during the recent disaster in the Philippines reuniting thousands of families. “This is Africa providing IT solutions to the world” Betty said.
Read my actionable and rare Africa market insights I gained during that event from Betty and others operating on the continent here.
Another company that has made a big name for itself is Coders4Africa. Based in the US the management team has built a strong network of over 1,500 African developers in 25 countries and several offices on the ground in Africa! Amazing! Their immediate objective: To lead outsourcing development programs for companies globally. Here is how they summed it up on their website:
Problems we are trying to solve:
Africa impacts just 1% of the world’s IT distribution and production for both software and hardware (UNCTAD 2013)
70 million African internet users & more cellphone users than US & EU and not enough coders to leverage this opportunity
Africa is faced with 3 problems
Not enough Software developers
Not skilled enough to do the job
Not enough contextual and impactful APPs
I am fortunate to have been in touch with Coders4Africa, and I can tell you their vision and dedication is a wonderful example for Africa, so make sure you use their services for your own undertakings or you spread the word!
3. ICT solutions for Africa’s financial sector
I think it is fair to say that a big chunk of ICT solutions has been developed for the financial sector, and frankly, it is a sector with a lot of capital that can be invested into capacity building, payment solutions, and customer outreach through tech. Kenya has seen certainly some amazing and exciting developments in this regard over the last few years, but huge improvements in this regard have also been made in Nigeria, Ghana, and SA.
I want to make you aware of a few markets that I believe have also great potential for ICT solutions in the finance sector. They are Botswana, Rwanda, Mauritius and possibly Zambia. The reason is because Botswana, Rwanda, and Mauritius are ambitiously marching towards the vision to becoming regional financial capitals of their own, besides some powerful markets next door (well, make that across the ocean for Mauritius).
Several new bank branches have for example opened in Botswana, while Rwanda is still trying actively to entice some international banks to open shop in Kigali, although this is progressing currently rather slowly I have heard; a lot of regional banks however have entered the market over the last few years. While the country’s financial inclusion is currently below 25 per cent, with more financial institutions entering the market, the government is targeting more than 70 per cent by 2020. And the good news is that the Rwandan government is usually following vigorously through with their ambitions, so watch this space – well, and if you are in ICT: don’t just watch, get in!
4. ICT: Shall I focus on government, health, and education?
I just discussed the huge ICT opportunities in providing solutions for B2B and the finance sector. What about the demand for ICT in government, health, and education? – you may ask. The demand undoubtedly exists, and you can fill it, but here is an important point that I would like you to be aware of: government, health institutions, and the education sector (the latter two being largely owned by the first) will be notoriously slower in response and more complicated in dealing with due to the high level of bureaucracy, as compared to selling to the private sector.
Having said that, the health and education sector in Africa are seeing a big boost in privately owned entities, especially in Kenya, Nigeria, and South Africa; so you may want to focus on them. It occurs to me as being a better strategy for a new entrepreneur, a start-up, or a first Africa entry – dealing directly with government may murder your motivation. Figuratively, of course.
Once you are operating confidently in the market and you have build some connections with key decision-makers and various stakeholders in your industry, you can attempt to bid for ICT related government tenders trying to win a major contract.
A third option is that you become a social tech entrepreneur. This works almost anywhere in Africa. Finding solutions for the many health and educational challenges in Africa and making them accessible to the wider population. Check for example MedAfrica, a popular app that aims at increasing community access to health related information.
5. Meet the huge demand for ICT training
This is an excerpt of my free monthly Africa Business Intelligence (feel free to sign up to it on the right sidebar here on my blog if you have not done so yet!): “Private companies and government entities in Liberia and the DRC for example are facing a huge lack of skilled ICT personnel, so much so, that it is repeatedly discussed.
The shortage of quality ICT skills has been a recurrent theme in Liberia. Highly specialized skills required to automate processes are currently lacking and impossible to recruit anywhere in the country. And this shortage I put to you, is strongly in software design, programming, project management and software business consulting. The ICT skills shortage in Liberia, specifically in the area of computer programming is of great concern, because computer science and software engineering significantly impact business automation.
Visit many of our ministries and other entities and you will find out that many of the ICT staff have never attended any ICT training or human capacity strengthening program since they graduated school. This particularly hurts their ability to innovate and perform because in ICT, things change faster than any other area. (Source: Liberia Daily Observer)
Frankly, you have a similar situation and chronic gap in this regard in the huge markets of Congo, the DRC and in Angola – and you have the spending power there, too. Be aware however, that most there speak French and Portuguese, respectively.
Out of the top of my head I would say Senegal, Ghana, Ethiopia, Uganda, Tanzania, Zambia, Botswana, Namibia are other markets that are pretty dynamic, but could do with enticing ICT training packages for certain target groups.
Why not come up with neat ICT training packages that you could deliver through your new Africa ICT training business? All you need it a lap top and a luggage to get you started in Africa!
6. Find a local communal problem and fix it!
Seriously, this is the African solutions – to African problems way, and I am so proud to see a significant number of African ICT software and app developers providing affordable solutions to some of Africa’s biggest social and socio-economic problems.
Like Cameroonian Nteff Alain for example, who founded ‘Gifted Mum’ to bring down child mortality after birth with his special app. Or M-Farm, which offers real-time market prices for crops, matching Kenyan farmers with buyers. Depending on the target market, these are not always the most profitable businesses, but undoubtedly among the most impactful. Blessed be those entrepreneurs: Africa is becoming a better place, because of them!
Have you thought of starting an ICT business in Africa – and what are your questions or experiences? We would love to hear from you!
Author: Dr. Harnet Bokrezion is the Founder of africajumpstart.com and co-author of the book ‘101 Ways to Make Money in Africa’. She coaches individuals and consults existing companies assisting them to make smart and strategic business decisions in Africa’s new emerging markets faster and more confidently. Dr. Harnet also regularly writes for the renowned DHL powered publication howwemadeitinafrica.com. Get in touch to inquire how she can be of assistance to your own Africa business endeavors: firstname.lastname@example.org