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IBM invests in Africa

As the tech world recognises the opportunity that Africa presents as one of the few growth regions, IBM has made a strong move into the continent.

As economies stagnate and shrinks across the world, Africa remains the one region that is characterised by economic growth almost across the continent. Analysts estimate the total InformationTechnology market opportunity across Africa to be worth more than $20 billion in 2012 alone.

In recognition of the potential of the market, IBM is making a significant investment in Africa, ramping up its profile on the continent as part of its focus on emerging markets.

IBM is already present in more than 20 African countries and growing fast, viewing the continent as the next major growth opportunity, and harnessing the company’s Smarter Planet initiative to help both public and private sector clients do more with fewer resources. IBM has a broad program in place in Africa, covering the creation of new facilities, offices, training, staffing and recruitment, skills development, sales & marketing and corporate citizenship.

The expansion program is part of a major business plan to increase IBM’s presence in growth markets and support global strategy, strengthening our ability to provide high value solutions to our clients in the world’s fastest growing markets. IBM’s growth markets are outpacing major markets in terms of revenue growth.

The continent’s potential is undisputed, not only in the light of its abundant resources and fast-growing market opportunities, but in terms of its integration into the global business community and the ability to leapfrog legacy technology systems.

For example, the rapid growth of the mobile phone market across Africa (Africa has more than 700 million mobile subscribers) is part of the creation of basic infrastructure across banking, healthcare, communications and transportation that will support future economic growth.

IBM has signed several deals with Bharti Airtel, creating an integrated infrastructure for the telecommunications giant throughout 17 countries in sub-Saharan Africa. IBM is also providing IT support for Bharti Airtel staff across all its operations, and customer call centers.

With the rise of the middle-class African consumer and rapid urbanization, Africa’s top 18 cities are expected to have a combined annual spending power of $1.3 trillion by 2030. Currently there are 52 cities of over 1 million people (more than that of Europe).Africa’s greenfield situation presents the continent with vast opportunities for the introduction of innovative, economy-boosting services.

In East Africa, where 80 percent of the population still stash cash under their mattresses, mobile phones are steadily opening up new avenues to deliver mass-market banking services. In step with the rapid transformation of the African financial services sector, IBM is working with local businesses to implement smarter systems that allow them to launch innovative new services to customers.

Banks across Africa have turned to advanced technologies to launch new services such as mobile and internet banking in order to take banking services to previously unbanked parts of society. In 2011, IBM signed around 20 deals with banks across the continent as part of core banking modernization projects to support the new wave of innovation in Africa’s financial services sector.

In South Africa, IBM helped the country’s leading short term insurance company, Santam, to save $2,4 million on fraudulent claims in the first four months of using IBM business analytics software. The system has enhanced Santam’s fraud detection capabilities, helping to uncover a motor insurance fraud syndicate and enabling faster payouts for legitimate claims.

‚”By opening a direct presence in many markets on the African continent, IBM overcomes one of the biggest barriers to entry in Africa, namely being able to offer local support and insights to their clients and business partners,‚” says Hannes Fourie, Senior Analyst for IDC, Middle East and Africa.

With a mobile phone penetration rate of 70% in the Kenyan capital Nairobi, IBM consultants have also developed a plan for using mobile solutions to help manage traffic in the city, coordinate emergency services and identify parking spaces. The blueprint developed by IBM to ease Nairobi’s notorious traffic jams and increase government revenue, was part of an IBM Smarter Cities Challenge grant of $400 000 awarded in early 2012 as part of a three-year, 100-city philanthropic progamme.

Africa is also a focus region for IBM’s Corporate Citizen Corps, a corporate version of the US Peace Corps. Through 2015, IBM will send close to 600 employees to Africa to work on additional pro bono projects in South Africa, Tanzania, Ghana, Kenya, Senegal, Nigeria, Egypt, and Morocco.

IBM says it also has an ambitious initiative to build skills and a culture of innovation across the continent, with the goal of developing more products and services “in Africa by Africans for Africa.”” The program combines private-public partnerships with a multinational mentoring program that pairs experts with students and young professionals. Leading the project is Dr Mark Dean, the inventor of the IBM PC, who was recently appointed as IBM’s Chief Technology Officer for Africa.

In addition, IBM is attracting skilled members of the African diaspora working in Europe and the US who are keen to return home.

“”With Africa rising, the case for qualified professionals to stay put, and the diaspora to return, has become more compelling,”” IBM said in a statement.

For example, Senegalese Country General Manager, Mamadou Ndiaye, is the son of a peanut and millet farmer, and walked five kilometers to school every day in rural Senegal. Ndiaye holds a Masters in Statistics from Columbia University and a Masters in Computer Science from the Polytechnic University of Brooklyn, New York as well as a Bachelor in Mathematics from CAD University in Senegal. Since accepting the position in 2011, Ndiaye’s mission has been to help improve Senegal’s IT infrastructure ‚Äî specifically, by working with the telecommunications, banking, and government sectors. To that end, Ndiaye’s team and a local business partner recently implemented IBM’s first major project in the country: a new import and export tracking system for the government, which allows customs officers to see what’s happening across all 30 border posts in real time. The mainframe solution has significantly increased efficiency, reduced power consumption, and cut operating costs.

“”The bottom line is IBM is solving big, chewy industry problems in partnership with governments trying to build out infrastructure. This is a big budgets, high stakes game and it’s IBM’s sweet spot. Look for Africa to emerge at the end of this decade as ‚””the next big regional thing in IT,”” says Wikibon CEO David Vellante/

IBM has offices in countries including Tanzania, Ghana, Nigeria, Kenya, Morocco, Egypt, South Africa, Tunisia, Algeria, Angola and Nigeria. In March this year, we opened a new subsidiary in the Indian Ocean island country of Mauritius, where there is strong demand from the textile, banking, tourism and telecommunications sectors. Local clients include Air Mauritius and global textile industry leader Compagnie Maurcienne de Textile (CMT) which has more than 12 000 employees and supplies the fashion markets of the USA and Europe. IBM provided CMT with a new data storage system which led to a 20% increase in the performance of its operations.

“”For more than 60 years, IBM has played a vital role in Africa’s development,”” said an IBM spokesperson. “”The company is now a key part of the continent’s technological business community and we’re committed to more progress through innovation and transformation.

IBM has Innovation Centres in South Africa and Morocco providing access to training workshops, consulting services, assistance to clients and local partners, start-up companies, independent software vendors (ISVs), and the academic community to help solve business challenges and bring new technologies to market.

IBM’s Integrated Delivery Centers in South Africa and Egypt provide virtual, professional IT support to outsourcing clients in Africa and Western Europe and its Business Continuity and Recovery Services facility in Johannesburg provides recovery services to private and public sector organizations across the continent. A new Software Centre of Excellence recently opened in South Africa.

* Follow Gadget on Twitter on @GadgetZA

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