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Going cashless is a priority for Africa tourism

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Although tourism in emerging markets grew from 30 percent in 1980 to 45 percent in 2015 Africa has not enjoyed the same growth rate. This, according to ELIAS AAD, VP, Government Solutions Lead, Mastercard Advisors, is due to security and the lack of going cashless.

Over the last eight years, travel and tourism has grown by 17.3 percent in the top ten fastest-growing global destinations.  This rate speaks to the rapid growth of tourism and how the industry, and an increasing priority for countries seeking for new growth opportunities. In emerging markets tourism grew from 30 percent in 1980 to 45 percent in 2015 and is expected to reach 57 percent by 2030.

Africa has not enjoyed the same growth rate, and although the continent offers a range of benefits, the sector remains largely an untapped opportunity. This is largely due to challenges facing the sector, including security concerns.

Recognizing the economic importance to mitigating the challenges was high on the agenda during the 2017 World Tourism Conference held in Rwanda earlier last year. Sector leaders discussed how to maximize opportunities and also reviewed the needs of the sector to reach its full potential.

The event was attended by tourism ministers from various African countries alongside tour operators, travel agents, hotels, airlines, some of the key private sector players. A set of challenges were identified and we broadly agreed that focusing on tackling them together, as industry leaders and the public sector, would make tangible differences to not only each of the African countries independently but also for the continent as a whole.

Easing of travel visa restrictions:

Current travel visa restrictions prevent even Africans from exploring their own continent. The ministers highlighted the complexity behind removing visas, especially considering that there are a number of factors, including security that needs to be considered. However, keen consideration and solutions as to how countries can circumnavigate the concerns around the need for travel documents will go a long way to feed into the decision to remove the need all together. By removing travel restrictions – particularly at an inter-African level – would boost the sector significantly.

Developing infrastructure that allows for easy travel

Lack of adequate infrastructure, whether air, road or water, makes it complicated to travel between destinations. One such example is a traveler trying to go from Kigali to Cape Verde – currently they need to take a number of connecting flights and routes – costly and a real issue for business travelers. As it stands, there is a critical need to further develop a strong airline and road network that connects African locations as well as consideration of smart ways to utilize existing infrastructure. This speaks to the importance of developing smart, connected, cities across Africa – technology will go a long way to boosting efficiencies that will have a long-term benefit on tourism.

Going cashless must be a priority for African economies

With 94 percent of retail transactions still in cash, there is a real need to displace cash given the countless benefits for consumers to shift behaviour. Additionally, benefits will benefit the sector and overall economy. Focus should be placed on:

·         Safety: Digital payments is far safer, and although in Africa the need still remains to have some cash available, it is important to develop a wider acceptance network that includes hotels but also tourist hot spots.

·         Customer experience: COMESA (Common Market for Eastern and Southern Africa) has launched a program called from Cape Town to Cairo, providing travelers with a full itinerary to travel from, to and in-between these cities. The initiative is helping to take the pain out of having to carry multiple currencies when travelling. The collaboration highlights the importance of similar initiatives, and a closer relationship between countries.

·         Increased tourism spending: Hospitality providers and retailers benefit from higher footfall and greater purchase power from consumers given the ease of paying for goods digitally.

·         Contribution to GDP growth: A Moody’s study showed that increased use of electronic payments added 0.8 percent to the GDP across emerging markets and 0.3 percent for developed markets. This was driven by; higher potential tax revenue; lower cash handling costs; guaranteed payment for merchants; a reduction in the grey economy due to lower unreported cash transactions; and greater financial inclusion.

The reality is that these seamless experiences will only be realized once sound infrastructure is implemented.

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IoT’s answer for Africa

IoT and digitization enables us to efficiently, proactively and predictively address the sustainability challenges that are faced globally and on the African continent, RESHAAD SHA, CEO of Liquid Telecom.

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With Africa’s population set to increase from around 1.3-billion in 2018 to 1.7-billion in 2030, both challenges and opportunities are presented with regards managing issues including food production and security pose  as well the utilization of limited natural resources in a sustainable manner.

Water scarcity and quality for example are realities that negatively impact health, food production and security. Population growth rates and climatic changes place an exponential demand on this scarce and dwindling resource. These are just some of the sustainability challenges facing not just the African continent, but other developing nations and the world as a whole. In addition to this, the demand for the delivery of basic services as healthcare and sanitation also increases.

Against this background of African population growth lies the grim projection that Africa will account for more than 50% of child deaths (under 5) by 2030, while each day, nearly 1000 children die owing to preventable water and sanitation-related diarrheal diseases according to the UNICEF 2017 trends in child mortality report. It’s an alarming fact, given that while some 2.6-billion people have gained access to improved drinking water sources since 1990, 663-million people still do not have access.

The department of Water Affairs and Forestry estimate that the agricultural sector accounts for more than 50% of water use in South Africa and experience water losses of between 30 and 40 per cent. Further, the department states that around 35% of irrigation system losses, often nutrient enriched and containing herbicides, pesticides, and other pollutants, return to rivers. These are just some of the ways in which reactive, inefficient, and manually driven processes have limited us in responding in an impactful manner and timeously mitigating these risks

It is for these reasons and other socio economic and environmental concerns that the United Nations has established its Sustainable Development Goals strategy, addressing the global challenges we face, including those related to poverty, inequality, climate, and environmental degradation.

We need to look at smarter ways that leverage technology in order to addressing these challenges. The situation requires a radical response that delivers a proactive, predictive and data driven approach to addressing these issues with exponentially growing levels of speed and impact.

The IoT ecosystem, comprising of sensors, connectivity, data analytics and workflow automation platforms, and applications are at the core of acquiring, analyzing and harnessing the insights that can be integrated into agriculture, service delivery, health and resource management processer – IoT is at the core of a digitization

One such sector which has benefited immensely from technology is in agriculture pest control, with the implementation of AI and IoT by Spanish startup AgroPestAlert. The innovation makes use of “smart” traps that capture insects and analyse their wing beats to identify their species and even their sex. Placed throughout the fields, the traps communicate with the system to predict an imminent invasion. The system will send alerts to phones, tablets and computers and use an easy-to-understand visual tool to cue farmers instantly.

Around 200-million Africans use approximately 1-million manual pumps across the continent to manually access clean drinking water.  IoT applications have been utilised in assuring the delivery of water through manual these pumps, According to estimates, at least one-third of those pumps will break down at least once in its lifecycle, and up to 70% will break in the second year of operation. The impact of not having access to clean drinking water is dehydration or water borne pandemics.

In the Kenyan Region of Kyusoa, Oxford University began a proof of concept project in 2013, which made use of motion sensors) to capture the movements of the pumps’ handle which was transmitted and analysed in real time. A decision support system based on real data was  used to predict pump malfunctions, allowing for a better planning and shortening the time needed to repair broken pumps, or avoiding malfunctions altogether, directly improving the access to clean drinking water for the rural population.

Liquid Telecom realise that the future of sustainability lies in technology and innovations such as IoT. We provide high speed fiber connectivity to interconnect as well as access platforms to build IoT solutions, in addition to access to Microsoft Azure suite of platforms for analytics and algorithm driven based processing and execution. Our Pan African network enables collaboration and cross border innovation and learning, fast well as the capability to efficiently scale out these solutions on Africa’s Liquid Cloud.

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Africa start-up ecosystem can drive blockchain

Through nurturing and technical support, Africa’s tech start-up ecosystem can be a major driver of Blockchain-based innovation says BEN ROBERTS, Liquid Telecom’s Group Chief Technology and Innovation Officer.

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African communities have always come-up with inventive solutions to local problems. Take Somalia as an example. The country is said to have one of the largest diaspora populations in the world. It has few commercial banks and relations with international creditors remain fro­zen due to debts incurred in the late 1980s. 

So its population uses Hawala; an infor­mal value transfer system based on the per­formance and honour of a large network of money brokers. For example, it would mean a Somali based in the US would give money to a local branch agent, where it is sent to a cen­tral country clearing house, then onto a clear­ing house based in another country (typically somewhere in the Middle East). From there it goes to a Somali agent, before the funds are finally collected by an individual in Somalia.

Much like blockchain, the Hawala system is built on trust – but that’s where any similarities end. In fact, cryptocurrencies – many of which are blockchain-powered – may eventually be­come a replacement for Hawala and other exist­ing forms of international remittances. Cryptocur­rencies can enable people to exchange currency online without any middleman – even banks. 

International remittance is one of many compelling use cases for blockchain. The technology’s ability to digitise trust makes it a unique fit for many African countries, par­ticularly those where processes and supply chains remain poorly designed and susceptible to corruption.

At Liquid Telecom, we’re excited about the potential for blockchain technology across the region. Along with other emerging tech­nologies, we recognise this as another major new digital opportunity for businesses that utilises our network infrastructure and servic­es. The rise of blockchain innovation will rely on the skills and talent of the region’s soft­ware developers, who themselves rely on a high-speed internet connection and access to cloud-based tools. Our fibre footprint – which will soon stretch all the way from Cape Town, South Africa, to Cairo, Egypt – is providing the foundations for digital innovation, while our partnership with Microsoft is enabling access to the cloud-based services and tools needed to create digital solutions for local problems.

Last year, with support from Microsoft, we set-up our Go Cloud initiative, which is helping to provide the region’s start-up communities with technical support, training and access to software. Using Azure Cloud, start-ups can cut development time and experiment easily with modular, preconfigured networks and infra­structure, enabling them to iterate and validate blockchain scenarios quickly by using built-in connections to Azure.

We’re starting to see the first crop of African start-ups experimenting with blockchain and cryptocurrencies. Take Rwandan start-up Up­lus, which is utilising blockchain to secure all transactions on its digital crowdfunding plat­form. The technology also allows the platform to take contributions from any country and covert it to the local currency.

A lot of existing applications in Africa tend to fall short when it comes to user experience, and blockchain could certainly help address some of these issues – be it by creating a new trusted way to make payments or verify user identification. During this early stage of block­chain experimentation and proof of concept, it will be crucial for start-ups and businesses to develop solutions that are relevant for Afri­can communities. Without that, the technology won’t gather momentum.

Regulation can nurture or constrict the tech­nology and will have a role to play in being a ‘make or break’ for blockchain. Living in Ken­ya, I’m proud to see how proactive the gov­ernment has been in seizing the blockchain opportunity. The creation by the President of a taskforce earlier this year dedicated to blockchain – led by the former permanent secretary for Ministry of Information and Com­munications, Dr. Bitange Ndemo (see page 7) – shows how committed the country is to being a leader in emerging technologies. As more African countries follow Kenya’s lead, blockchain should hopefully find itself reso­nating more powerfully with local businesses and consumers.

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