Tech 2020: Hopes high Africa's first unicorn

Startups, incubation hubs, digital citizen registry and escalation of business intelligence will be tech factors that will dominate Africa's 2020.

It was a matter of time before the African continent revealed its first indigenous unicorn. Just recently, Visa invested US$ 200 million in the Nigerian fintech firm Interswitch, totalling its valuation to a US$ 1 billion mark. Already by April this year, there were 44 startups that had raised over US$ 1 million each, a turn of fortunes for African entrepreneurs.

These developments have been induced by progressive tech development in various industries including access to internet, more tech talent in the continent and favourable business environments.

Here are some of the predictions for Africa in the coming year.

From startups to enterprises

Investors are taking African based tech businesses and startups increasingly seriously, with estimates that African companies have already raised a total of US$ 1 billion, even before the year ends. Some of these companies have rapidly graduated from startups to enterprises and now operate in various African countries. Lori Systems, a logistic truck company re-located to Nigeria in October and quickly raised its Series A from Nigerian and Chinese investors. Swvl, an Egypt-based bus booking service raised US$ 42 million to expand their services in East Africa. CarePay, a digital health payment platform, raised approximately US$ 45 million in May this year.

A report by the World Bank titled Kenya Economic Update, suggests that Kenya is in a favourable position to push its startups to become enterprises: "Kenya's impressive performance in churning out innovative new startup stage digital ventures needs to be matched with higher rates of success in enabling these startups to rapidly grow - creating enterprises that will have a big impact on overall economic growth and job creation."

This includes improving access to capital for startups and reviewing existing taxation and procurement policies which are not tailored for the unique start up business models, the report added.

Growth of incubation hubs

Hubs have been known to give entrepreneurs a soft landing in the harsh reality that is entrepreneurship. With the growth of startups, tech hubs will be an important launching pad for the next big African brands.

"As of October 2019, the number of hubs identified across Africa is 643, which includes coworking spaces, incubators, accelerators, and hybrid innovation hubs affiliated with government, universities, or corporates," a new reported indicated. The report from AfriLabs and Briter Bridges showed a growing trend in incubation hubs across the continent, although hampered with financial and funding challenges.

"Hubs across the continent are now on a quest to establish partnerships and knowledge transfer networks and collaborate to avoid unnecessary costs and provide the organisations they support with the right resources," the report said.

There is an indication from the continent that these hubs are still crucial in establishing success stories. More hubs and coworking spaces will be opened to give entrepreneurs spaces to thrive.

The rare acquisition of Kenya's iHub by CcHub in Nigeria is a positive signal that pan-African hubs can help startups extend their reach across the continent.

Growing citizen registries

Kenya's misstep on developing a national digital registry under the Huduma Number has not slowed down other countries and agencies in implementing a digital registry. According to Omidyar Network, there are 500 million Africans who lack identities.

"This means many Africans cannot access employment and education opportunities; health and financial services; and critical social protection. Digital identity helps to include people in the growth and advancement of the continent," Magdi Amin Managing Director, Beneficial Technology at Omidyar Network said.

Countries working on their digital IDs include Kenya, Tanzania, Nigeria, and Ghana, and more are expected to join the bandwagon as the African Union makes it a priority.

However, experts have warned that governments should be careful in rolling out these digital IDs. Concerns over cyber security and data privacy have peaked as governments roll out their various platforms. Kenya's National Integrated Identity Management System, known as Huduma Namba, exposed some weaknesses in its roll out. Issues of identity theft, privacy and data management had dogged the registration exercise.

These issues need to be address if digital ID systems are to reach their full potential. Governments can greatly learn from global standards on how to roll out national identity systems for the benefit of their citizens.

Emergence of business intelligence

With digitisation of business processes and even payments, many small and medium sized enterprises are realising the treasure troves hidden in their data. Data analytics for business will be a space to watch out for in and around the continent as local content, data storage and management is becoming mainstream.

The establishment of Microsoft and Amazon presence in Africa will open opportunities for companies to understand their in-house data and even customer data interactions, to improve how they roll out their services. Local cloud service providers such as CloudHop will also be a fit for the growing enterprise market.

Largely, these data will be created from a mobile phone or smartphone, since the continent has been described as a mobile first continent. Already, digital lending platforms are harnessing the mobile resources to calculate their own credit score. Payment information and m-surveys will continue to be one of the sources of data analytics for the market.

Various use cases of business intelligence are expected to take centre stage in the coming year as companies digitise their operations. More experts in this field will be needed to help businesses understand their areas of operations and generate more income for their endeavours.

Digital skills upgrade

The Octoverse report by GitHub held positive findings on the growth of African tech skills on a global platform. African Developers have created 40% more open source repositories than last year, which is a higher percentage growth than any other continent.

Nigeria and Kenya show great promise as their contribution to open software grew by 59% and 44% respectively. Even though overall, the African continent still lies at the bottom, the growth has signalled a content that is waking up to its potentials in the digital enterprise.

 

If the successes of this year are anything to go by, Africa's 2020 vision looks sharper than ever before.

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