💡 Optimist's Edge: Full digitization of the world's second-largest continent

Summary

📉 What people think

The majority of respondents, 35 percent in our Warp News survey, believe that internet use in Africa has increased by 400 percent since 2010.

About half answer that they believe that internet use has increased by between 10 and 50 percent. The rest of the respondents believe that internet use has decreased in varying degrees.

📈 Here are the facts

The statistics from Internet World Stats say something completely different than what people think. Between 2000 and 2021, internet use in Africa increased by almost 13,000 percent. Today, in 2021, 43 percent of the continent's population are Internet users. The world average is 66 percent.

💡 Optimist's Edge

Digitization is a key to lifting Africa out of poverty. Since most countries on the continent do not have an old technical debt to consider, development can take place quickly.

A huge project is now underway to lay underwater internet cables. Together with Starlink, this provides an opportunity for hundreds of millions of Africans to connect. Digital financial systems are growing stronger, which is the engine for all other vital areas such as trade, healthcare, and agricultural development.

👇 How you can get the Optimist's Edge

Perhaps the most important thing right now is to stay up to date on developments in Africa. The digitalization taking place is far from an isolated technical issue. When the world's second-largest continent is digitized, it affects the whole world.

Do you want to contribute and accelerate development? You can, for example, become a mentor via Norrsken or GrowthAfrica, or support financially via Help to Help and Kiva.

📉 What people think

The majority of respondents, 35 percent in our Warp News survey, believe that internet use in Africa has increased by 400 percent since 2010.

About half answer that they believe that internet use has increased by between 10 and 50 percent. The rest of the respondents believe that internet use has decreased in varying degrees.

📈 Here are the facts

The statistics from Internet World Stats say something completely different than what people think. Between 2000 and 2021, internet use in Africa increased by almost 13,000 percent.

Today, in 2021, 43 percent of the continent's population are Internet users. The world average is 66 percent. The increase in recent years has meant an enormous change in a relatively short time and, at the same time, it is quite obvious what a significant change Africa is now facing.

Africa is the world's second-largest continent. Today, about one billion people live in 54 countries. Countries that are diverse have very different conditions and impacts regarding connectivity and the degree of digitization.

In a highly digitalized Kenya, internet penetration is just over 85 percent. In Western Sahara and Eritrea, internet penetration is just five and seven percent, respectively.

African countries are both open and closed when it comes to democracy and human rights. There are countries with far-reaching strategies regarding society's digitalization and innovative power. The challenge often lies in attracting financiers and venture capital. There is also a need for a well-educated workforce that can lead and implement the significant changes that are underway.

💡 Optimist's Edge

Digitization is a key to lifting Africa out of poverty. This can happen almost immediately if certain fundamental factors come into play. Since most countries on the continent do not have an old technical debt to consider, development can take place quickly. The word often used is leapfrogging, improving one's position by skipping certain steps. Why install copper cables when there is 5G?

While automation and data collection can build digital services, there are still concerns that jobs – the low-wage jobs so important to Africa – will disappear.

Anyone who has the answer to how both simple jobs can be taken advantage of while new technology is introduced quickly is sitting on a gold mine.

Banks and trust in public institutions

It is crucial to keep pace with the ambition to increase the level of education, create access to a robust internet, ensure that people are given access to mobile payment systems, and digitize public services.

This is an excellent foundation to stand on for the next step in development. Digitization of public services is a key part of Africa's transition. With access to public services, increased trust in public institutions follows, and with it, widespread corruption can decrease.

A large part of the population south of the Sahara is what is called "unbanked." That is, lacking one's own bank account and connection with a bank.

Therefore, access to mobile payment services is a key to being able to develop more and more advanced digital services. With the internet and mobile services, it is possible to solve this lack of access to money and transactions in a new and much cheaper way.

Today, banks are only partially involved in mobile transactions. Oftentimes one must go with a bag of money directly to the mobile operator, which then creates access to the payment function. While this is one way, it is certainly not the most ideal.

Major changes in Ethiopia

There are many indications that significant changes are expected in Ethiopia, the second-largest country in Africa after Nigeria, with approximately 115 million people.

In September 2021, the decision was made to allow foreign banks to operate in the country for the first time ever. This unique decision, combined with the fact that the state telecom monopoly was only broken a couple of months ago, means there will most certainly be extensive changes in the near future.

With a large foreign operator in the country, access to the internet can become much more consistent and reliable. Due to the ongoing war situation in the northern parts of the country, about a third of the Ethiopian population has no access to the internet or even telephone. Communication is completely off.

At the same time, with a sitting Prime Minister who has a background in the IT sector, there is also an investment in digital strategies, infrastructure, research in the AI ​​field, and powerful data centers. The latter has not previously been available for commercial operations in Ethiopia at all and is an absolute prerequisite for handling large amounts of data.

With the Kenyan operator Safaricom in place in Ethiopia, many other African countries use the successful and straightforward SMS-based payment service M-Pesa. It is a mobile application that enables both the transfer of money, payment of goods and services, as well as the management of microloans.

Ethiopia is just one of many examples. But, with internet penetration in the country at just 17 percent, we can expect significant changes in the future.

When everyone gets an address

Another challenge, and by extension the possibility, is to solve the fact that 50 percent of the earth's population has no address of its own. Many of these people live in Africa. With your own address, you can suddenly be part of the democratic process and, for example, register for general elections.

One can, with available and reputable banks, register a bank account. People can also e-shop and order goods and services at their doorstep. Addresses in the traditional way are not typically created quickly. Still, right now, Google is creating simple addresses by scaling down satellite images with such high precision and quality that each small, simple property and hut can have its own unique identity based on longitude and latitude.

An address could be PR7G + 2Q, for example, which is in Nairobi. With Google's new solution, 516 million homes can already be identified in an area equivalent to 64 percent of the entire African continent. In addition to the location of buildings and their position, there are also great opportunities to, for example, better prevent and manage natural disasters.

Africa better connected to the world

The continent also gets a better connection to the rest of the world thanks to new offshore cables that create direct contact with, among others, Europe and Brazil.

The most significant current investment, 2Africa, will connect 26 countries in Africa with the Middle East and Europe throughout 2023 and 2024.

Behind the investments are Facebook and several international telecom operators. Today, 37 out of Africa's 38 coastal countries, all except Eritrea, have one or more submarine cables connected to the 16 land-locked countries.

Beyond this, Africa has been and still is highly dependent on mobile networks. As much as 90-98 percent of all internet traffic today goes through mobile networks. This is why a lot of energy from governments and legislators over the years has been put into solving concerns like the spectrum issue.

The fact that 2Africa is now underway and that Elon Musk's large satellite investment, Starlink, can be "up and running" later this year means that access to a robust internet will increase. In addition, costs will go down.

The digital divide between Africa and the rest of the world will decrease, and economic and social development will, in many ways, be able to pick up speed. In many countries throughout Africa, governments and legislators are currently working on their own strategies for broadband expansion nationally. The large-scale, international initiatives are complemented by small-scale and local initiatives to reach beyond large cities and densely populated areas.

AI and blockchains in Africa

While many countries on the African continent are struggling with the elementary functions of achieving the benefits of new technology and digitalization, the presence of the great technological powers in Africa is quite real. China is investing heavily in both digital and physical infrastructure. The American presence in Africa includes the most prominent AI companies, such as Google and IBM. They invest heavily in research and development in artificial intelligence on the continent.

Digitization, artificial intelligence, blockchain technology, and access to data are no longer technical issues but rather highly political issues. As access to information and user data increasingly falls into the hands of global, commercial actors, it has become a matter of democracy.

If we look at blockchain technology, it offers excellent potential for both people and companies in Africa. The technology can create both transparency and resilience, which increases security and reduces dependence on third parties. This is something that Africa needs.

👇 How you can get the Optimist's Edge

Perhaps the most important thing right now is to stay up to date on developments in Africa. The following digitalization on the continent is far from an isolated technical issue. It is increasingly about geo- and security policy. For Africa, after so many years in the shadows, is a game plan for big politics.

All major powers and most countries around the world are currently creating their own Africa strategies.

For example, the EU's strategy from 2020 emphasizes that Africa must build capacity in the public sector when it comes to digital transformation, security, and resilience. The EU also points to the importance of exploiting the potential of artificial intelligence, blockchain technology, and big data. The opportunities for companies in these sectors are great.

Still, many initiatives and opportunities are in their infancy when it comes to Africa. Many initiatives believe that the AI ​​used today is in its simplest form, but it is only a matter of a couple of years before it looks very different.

Many analysts also believe that the fintech area, or financial technology, is perhaps the one with the greatest potential right now. A well-functioning digital financial system is the engine for all other vital areas such as trade, healthcare, and agricultural development. But also to speed up digitalization in general.

Pascal Murasira is head of Swedish Norrsken's new East Africa hub located in Rwanda. He believes that what Africa needs now is to build a digital economy on top of the digital infrastructure. This is best done by supporting entrepreneurs and start-up companies.

"Sweden is a successful IT nation. There is a lot of accumulated knowledge and experience there that is now needed here, in Africa. Both in the private business sector and in the public sector. We need mentors and knowledge transfer," says Pascal Murasira.

Here, as a Premium Supporter, you can make a concrete contribution. With a background in IT and digitization, you can make a difference. Norrsken can help to mediate contact with people and businesses in Rwanda and other countries in East Africa. GrowthAfrica is another example where you can become a mentor or advisor.

You can also support financially. Two examples are:

• Help to Help: Here, you can provide educational support to young people in East Africa.
• Kiva: Through Kiva, you can lend small sums, called microloans, to people all over the world. You can filter your searches, such as lending to people in Africa who want to do something in technology.

"There are many here who need support. Especially women" concludes Pascal Murasira.

You now have an Edge because you have gained this knowledge before most others - what should you do with your Optimist's Edge?

❓ What else can you do?

Feel free to share more ideas with other Premium Supporters in our Facebook group.