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Look into the future of the African city

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How do we identify the impact and trends resulting from urbanisation? What new regulation and governance models are needed? These are questions we need to answer in order to see what the future African city looks like, writes RIAAN GRAHAM, of Ruckus, sub-Saharan Africa.

What does the future African city look like? How do we identify the impact and trends resulting from urbanisation? What new regulation and governance models are needed? What about engagement models that embrace social inclusion and civic participation? These are all questions we need to answer and as 31 October marks World Cities Day – a day to promote successes and challenges resulting from urbanisation – the spotlight is on the future of cities.

The theme this year is ‘Innovative Governance, Open Cities’ which highlights the important role of urbanisation as a source of global development and social inclusion. What’s more, it is evident that innovative technologies and connectivity is critical during the planning, design, delivery and operation of smart infrastructure and services for urbanisation.

Around the world, cities are becoming more connected, collecting data everywhere to help planners make smarter decisions and deliver new services. The Internet of Things (IoT) is gaining traction, impacting every area of our lives and quickly turning “Smart Cities” from intangible visions of the future into a reality.

However, before Africa is able to start meeting those demands, we need to plan for capacity and speed to ensure a high-quality experience. What’s more, we need to take our unique challenges as a continent into account. A robust wireless network is a key part of this preparation – it is the “glue” that holds smart cities together, enabling effortless sharing of workloads with datacentres and bridging connectivity across wired and wireless.

So, what does the future African city look like?

Bridging the digital divide

As technology continues to advance at a rapid pace, the vision of the future is still emerging and we have yet to see what a true smart city will look like. Smart City IoT is an evolving concept, with lots of ideas but only a few complete deployments. Wi-Fi is the platform that will provide the foundation for smart city success, as it has immediate applications and can effectively connect a vast range of wireless technologies that will be involved in creating smart cities.

Smart cities will help address the economic and social inequality that this divide creates, by providing Internet access to all citizens. With robust networks in place, bridging this divide will help bring communities closer together and encourage citizens to play a more active role to local councils. Flawless connectivity will improve city infrastructure and make it possible for citizens to engage with their community, such as removing the roadblocks that complicate access to local services.

Business 

Revenue-generating applications will transform the way African businesses in smart cities communicate with their customers. In addition to an increased use of digital signage, to communicate offers and promotions, we can expect to see an increased use of beacons, which send notifications to customers’ smartphones as they enter a store. It will also transform the way people work and tech-savvy commuters will benefit from smart city technology to work on-the-go.

Smart utilities

In a smart city, lighting will automatically be switched off when it isn’t needed. It will be able to detect when people are on the street and turn on and off accordingly, reducing energy waste which is critical in countries where power is scare or expensive. In the near future, we can expect to see more city planners equipping their streets with smart lighting that uses sensors to track when there is high or low public footfall which will go a long way to reducing usage. Future smart traffic management is also likely to be a core feature of smart cities. This includes centrally-controlled traffic sensors and signals automatically regulating the flow of traffic in response to real-time demand, with the aim of smoothing flows of traffic to reduce congestion. This can go a long way to reduce traffic in high-dense areas over peak times like Sandton for example. And just think about the possibilities it could offer cities such as Lagos or Nairobi.

New technologies will also play an important role to help cities of the future promote sustainable energy use. For example, “smart bins” that alert collectors when they need to be emptied are being used today and we can expect to see more of them crop up in cities across the world as they embrace smart technology.

However, before becoming truly “smart”, cities need to implement the networks that will enable them to deploy new technology and the opportunities that Wi-Fi presents are simply too significant to ignore. The likes of Kenya, Nigeria, Zambia, and even Zimbabwe to name a few have embarked on wireless initiatives designed to bring better connectivity to more citizens. And other African countries are following suit. One key challenge lies in selecting the correct partner to work closely with them to identify and meet all their Wi-Fi needs. The right network will enable a city to save money through increased efficiency (for example, smart traffic and energy systems, as well as optimal budget allocation) and generate additional revenue, by encouraging visitors to return, businesses to invest and people to take up residency.

Africa has started using ICT investment to power its economy to gain more benefits. Government and the private sector are working together to fast track this process. Ultimately, when connectivity is improved, all stakeholders start drawing advantage from it. We are already seeing significant foreign direct investment into key ICT initiatives across the continent. So, even though mobility has sparked the flame around access, it will be wireless that fuels it into the digital future.

Here’s to the cities of the future!

Africa News

Africa’s fintech is migrating

Africa’s fragmented markets and lack of legacy foreign exchange trading infrastructure means that the continent has become a melting pot of fintech activity and innovation, writes TIM HUTCHINSON, Head of Digital for Financial Markets, Standard Bank.

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The evolution to electronic foreign currency trading in Africa, while slow to start, is today gaining tremendous traction. 

In South Africa, only five years ago, almost 90% of foreign currency trades happened over the telephone. Today, despite challenges around illiquidity and complicated political and capital control environments, approximately 75% of trades are conducted digitally, with a mere 25% conducted on the phone. 

With 57.6% of the world’s 174-million active registered mobile money accounts in Sub-Saharan Africa, the continent is becoming a world leader in fintech generally, and in mobile money in particular. As African citizens and business people transact globally, Africa’s highly developed fintech culture is not only deepening on the continent, but is also migrating out of Africa.  

The foreign exchange flows that Africa’s expanding fintech culture supports are very important to the continent’s financial services providers, most of whom are developing fintech capabilities or partnering with the most popular or effective home-grown African fintech’s to ensure that they capture this flow.

Standard Bank has been an integral part of driving this rapid evolution to digital in Africa’s foreign exchange trading landscape.  

In order to function as an effective market maker, we need to source liquidity in market. We also need to, instantly, formulate risk-based pricing in an ever-changing world. Thereafter we need to distribute price. 

In Africa this requires developing solutions that allows retail, corporate and institutional customers to access foreign exchange markets across multiple jurisdictions. At the same time in most markets, “we also need to show central banks what we are doing,” adds Mr Hutchinson. All transactions need to be transparent and electronically traceable so that local authorities are prepared to approve digital trades. 

Today, however, banks are not only expected to provide the systems and networks to facilitate basic transactions but are also required to provide insight and guidance beyond pure execution by offering additional value-based services across research, hedging and, most importantly, settlement capability. Currency research for example, is increasingly a big client requirement. Having on the ground experience and local expertise as well as the ability to deliver this digitally, “differentiates Standard Bank’s distribution capabilities in this regard”. 

In addition, banks are also increasingly required to inform and guide clients through the broader economic, legal and political landscapes in which transactions occur. For example, one of the considerations in developing Standard Bank’s digital capability was how to combine market intelligence and research with real-time pricing, trade execution and post-trade services. Today it is not enough just to execute trades. It is equally important that we advise and inform the broader universe in which trades happen.  

From a technology point of view Regulatory Technology (Regtec), for example, is assisting Africa to manage new regulatory developments in heavily currency-controlled environments. Similarly, the rise in robotic process automation (RPA) and artificial intelligence (AI), “has allowed Standard Bank to develop solutions that leapfrog traditional business problems”. 

Digital trading in Africa is also evolving in its own often very different way. We have found that it is not just a question of importing developed world systems. Our approach with clients is to work with them to help understand their internal needs in terms of governance and operational efficiency. We then partner with clients to develop and implement digital solutions that talk to the heart of their business need. 

Standard Bank’s own Business Online (BOL) platform provides an example of how the bank has built digital transaction capabilities that exactly meet client need. BOL, for example, allows clients to view balances across the continent while making third party currency payments and also supporting general cash management. This kind of broad, business-wide digital cash view and capability puts control back in the hands of the clients while also allowing clients, rather than the bank, to manage their own cash flow.

From an Institutional perspective it’s very important to be able to offer customisable solutions to clients managing money on behalf of their investors. Standard Bank’s investment in Application Programming Interface (API) technology, for example, is tracking exactly its client’s growing ability to build these capabilities into their own systems. 

On the retail side Standard Bank’s SHYFT app – a digital wallet allowing global transactions in USD, EUROS, GBP and Australian dollars has extended this control element to the man in the street. SHYFT has been recognised both globally and locally for its innovation.

Standard Bank presents a very compelling, unique and globally competitive digital trading proposition to local and developed world clients seeking to access Africa. Our footprint across 20 territories – most at different levels of digital development – provides a compelling pan-African proposition for global and local clients alike.

While Africa’s record in digital adaptation and innovation is impressive, the technology part is often the easier part to implement. The human and cultural systems, and client behaviour changes, required to give this digital evolution life – like getting customer analogue systems to start pricing electronically to make trades visible 24/7 – is often a lot harder to achieve than the technology upgrade. In short, bank employees, customers and regulators all need to undergo fundamental cultural shifts in how they do things and understand the world.

It is often these broader cultural and market shifts that Standard Bank as a pan-African bank is called on to advise as clients seek to understand and engage Africa effectively. 

Given the rapid pace of digital evolution within Africa’s varied market, customer, legislative and cultural landscapes, we need to balance customer value and efficiency – and regulatory pressures to be more transparent – with what is, in the long run, best for the market. 

As a pan-African bank inextricably committed to the growth and success of the continent, Standard Bank’s digital journey requires a judicious blend of developed world technology with African insight and innovation. This blend should be capable of balancing customer need and legislative oversight in the development of efficient and inclusive markets that sustain long term growth. 

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PC drops 5% in Africa

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The Middle East and Africa (MEA) personal computing devices (PCD) market, which is made up of desktops, notebooks, workstations, and tablets, declined 5.3% year on year in Q1 2018, according to the latest insights from International Data Corporation (IDC). The global technology research and consulting firm’s Quarterly PCD Tracker shows that shipments fell to around 5.7 million units for the three-month period, which represents the lowest quarterly volume recorded for more than six years.

While the overall PCD market experienced a slowdown in Q1 2018, PC shipments recorded healthy year-on-year growth, with both desktops and notebooks gaining traction across the region. “The overall market decline stemmed from falling demand for tablets,” says Fouad Charakla, IDC’s senior research manager for client devices across the Middle East, Turkey, and Africa. “These devices are falling out of favor across the region, with the biggest year-on-year decline seen in Kenya, where a massive delivery for the education section sector that took place in Q1 2017 was not repeated.”

There was a considerable year-on-year decline in PCD shipments to the UAE in Q1 2018, where a significant slowdown in consumer demand was witnessed, in line with IDC’s expectations. “The country had a slow start to the year owing to the introduction of 5% VAT, while April’s edition of the renowned IT and consumer electronics sales event, GITEX Shopper, was cancelled,” says Charakla. “However, this decision was well received by the PCD vendor and channel community as it enables them to focus their efforts on the October edition of this event.”

On the flip side, South Africa’s overall PCD market performed better than expected, with shipments into the country growing year on year. “This was spurred by the country’s improved economic situation and the strengthening of the local currency against the U.S. dollar, making it cheaper for PCs to be imported into the country,” says Charakla. “Meanwhile, February’s announcement of a 1% increase in VAT encouraged market players to ramp up their shipments into the country ahead of its implementation from the start of April.”

Another area of positivity is gaming PCs, which continue to act as a driver for the MEA region’s overall PCD market. “The higher-than-average price points and profit margins associated with gaming PCs is maintaining strong interest among market players in these devices, ” says Charakla.

Looking at the PC market in isolation, all the top five vendors maintained their respective positions in terms of market share when compared to the corresponding quarter of 2017. HP Inc. achieved significant growth in terms of market share to maintain its lead by a significant margin.

Middle East & Africa PC Market Vendor Shares – Q1 2017 vs. Q1 2018

Company

Q1 2017

Q1 2018

HP Inc.

26.9%

31.5%

Lenovo

18.8%

19.3%

Dell

16.4%

14.9%

ASUS

8.6%

8.2%

Acer Group

4.8%

5.1%

Others

24.6%

21.0%

In the tablet market, Samsung remained the clear leader and gained market share as well during the quarter. Lenovo climbed to second position in the market, overtaking both Apple and Huawei, which came in third and fourth place respectively.

Middle East & Africa Tablet Market Vendor Shares – Q1 2017 vs. Q1 2018

Company

Q1 2017

Q1 2018

Samsung

19.0%

21.2%

Lenovo

8.8%

10.6%

Apple

9.6%

10.3%

Huawei

9.0%

10.2%

i-life

6.6%

7.4%

Others

47.1%

40.3%

“The sharpest decline in consumer demand in Q2 2018 is expected in the ‘Rest of Middle East’ sub-region, where recently re-imposed U.S. sanctions against Iran have weakened the country’s exchange rate. Consumer demand in Turkey, the region’s largest single market, will also decline considerably due to the uncertainty and instability surrounding the upcoming elections in June. Turkey’s currency has also weakened to new lows against the U.S. dollar, making personal computing devices costlier for home users.”

In more positive news, a number of large education deals, primarily for notebooks, are expected to be delivered in Pakistan, the UAE, and Qatar over the course of the year. However, in the longer term, IDC expects the MEA PCD market to continue shrinking in shipment terms, with slate tablets declining the most rapidly of all the various PCD products.

IDC’s Shipment Forecast for Middle East & Africa PCD Market

Product Category

2017

2018

2022

CAGR 2017–2022

PC

12,310,198

12,902,095

12,950,311

1.02%

Tablet

11,354,777

9,646,870

8,508,807

-5.61%

Total

23,534,986

22,428,025

21,307,495

-1.97%

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