Arica’s recent historical deficit puts it in a convenient position in terms of adopting new technologies. Other regions have paid the expensive price of being early adopters but African companies can now adopt the best in modern technology, writes BRETT PARKER, MD for SAP Africa.
Trade is in Africa’s blood. Its rich resources, numerous societies and access to the world have created a hotbed of trade civilisations. One could go back millennia to the early kingdoms around the continental horn – the forefathers and peers of the Ancient Egyptian world – or the mysterious Kingdom of Nok in West Africa as examples.
But even in the last 2,000 years Africa never shied away from trade. The Kingdoms of Ashanti and Kongo were world-famous business hubs. In Libya vast desert cities can be found where ancient Berbers built elaborate irrigation systems. The Zimbabwe ruins and South Africa’s Mapungubwe had yielded evidence of extensive trade with Asian and Middle Eastern nations.
But most striking is the legacy of kingdoms that existed along the Sahel: the transitional area between the Sahara and the rest of the continent. Here numerous societies sat shoulder to shoulder, controlling the vast trade moving between Eurasia, West and Central Africa for ages.
Today the world is shifting gears into a new revolution, creating an opportunity for Africa to assert its legacy as the birthplace of business networks. Computational power and connectivity is shrinking the globe, changing how we compete and cooperate. Mastering pace, scale and complexity, creating channels and fostering partnerships have never been more achievable. Some have called this the Network Revolution and it is Africa’s greatest business opportunity yet.
The continent’s recent historical deficit ironically puts it in a very convenient position. Whereas other regions have paid the expensive price of being early adopters, African companies and states can readily adopt the best in modern technology, resulting in real gains on the ground. If there are any doubts about this, just look at the spectacular penetration of mobile devices in Africa: more than any other region in the world. Consider the remarkable growth of Rwanda, which thanks to savvy technology investments has tripled its GDP since 2000.
Success and growth is almost a given when developing markets jump onto the Network Revolution bandwagon. The real question is how to go about it. Here are three steps defining the transition:
From manual to electronic and Internet-based. The Network Revolution is a shift from manual processes kept separate in silos. Automation and accessibility are among its pillars, opening both resources and the ability to cross-pollinate ideas. South Africa’s Department of Home Affairs has dramatically improved its service, auditability and turnaround times by going paperless. It captures all data electronically, which is shared across its footprint. This not only made for happier citizens, but opened the way to adopting the country’s award-winning Smart ID cards.
From an entity and chain to a network. Business networks are the oldest and most vital components to any enterprise’s survival. These are jealously guarded because of their fragility: all it takes is for that proverbial weak link in the chain to break. But today digital
sourcing marketplaces such as Aruba are making it easy to find suppliers, partners and buyers. The mobile phone is a cornerstone to these networks: Africa is currently undergoing a farming revolution in countries such as Kenya and Tanzania, where mobile services help farmers get daily prices, share advice and even gain micro-insurance for their crops across a web of networks, not flimsy top-down chains.
From need to reach and fusion. The biggest impact of the Network Revolution is being born from data. We are increasingly able to quantify aspects of the world through data, be it consumer behaviour, environmental shifts, mechanical maintenance or anything that generates information about its behaviour. That may soon become everything as the Internet of Things brings sensors to every nook of our world. And fusing the resulting data in creative ways to offer new insights will be the differentiator between the haves and have-nots of tomorrow. This is extending the reach and proactivity of companies and governments beyond their traditional boundaries. One example is the Ethiopian Electric Power Corporation, which has accelerated its delivery and boosted efficiency by adopting data-centric thinking.
One element underpins all of the above: the platform. For any business or government to take advantage of the Network Revolution, it must consolidate its processes into a unified software platform: a powerful foundation where everything ties together. Called the 3rd Platform, this is the next step in digital technology, taking advantage of the power and scale provided by modern data centres and connectivity. One example is SAP HANA, the pioneering in-memory platform. Think of it as an operating system for the entire enterprise: a single space upon which all other processes – be it internal tasks, external collaboration, differentiating applications or new technologies – can find a home.
This consolidation pays dividends. Research from McKinsey & Company shows that networked enterprises using collaborative technology to connect processes to customers, suppliers, and partners outpace their peers in nearly every category of business performance. Africa is primed to take the Network Revolution by the horns and reassert itself as the birthplace of business.
Africa phones go flat
Africa’s mobile phone market declined 2.1% quarter on quarter in Q3 2018 according to the latest figures from IDC.
The global technology research and consulting firm newly released Quarterly Mobile Phone Tracker shows overall shipments for the quarter totalled 52.6 million units, with feature phone shipments falling 2.7% QoQ and smartphone shipments declining 1.3% over the same period.
Transsion brands (Tecno, Infinix, and Itel) led the feature phone space in Q3 2018, with a combined unit share of 58.2%. Nokia was next in line with 11.7% share. Transsion, Samsung, and Huawei dominated the smartphone space with respective unit shares of 34.9%, 21.7%, and 10.2%. However, in value terms, Samsung led the smartphone market with 37.2% share, followed by Transsion (21.0%) and Huawei (13.0%).
There were differing fortunes in the region’s three major markets, with Nigeria suffering a heavy 11.6% QoQ decline in mobile phone shipments, while South Africa and Kenya saw respective QoQ growth of 8.5% and 7.9% in Q3 2018.
“The decline in Nigeria stemmed from a slowdown in government spending, ongoing warfare in the country’s northern states, and market uncertainty in the lead up to elections,” says George Mbuthia, a research analyst at IDC. “In South Africa, the market’s growth was spurred by the penetration of low-end devices from brands such as Mobicel, Mint, and Nokia, while the launch of entry-level smartphones helped drive growth in Kenya despite increases in taxes and fuel prices placing a significant burden on disposable income in the country.”
While feature phones remain steadfastly popular across Africa, particularly in more rural areas, consumers are increasingly being attracted by smartphone offerings from Chinese brands such as Xiaomi, Oppo, and Huawei, which are actively targeting feature-oriented customers at more economical price points.
“There is a new wave of Chinese brands aggressively pursuing growth opportunities in the region, while the more-established Huawei is also accelerating its marketing efforts and expanding its distribution budget,” says Ramazan Yavuz, a research manager at IDC. “These brands have quickly progressed along the learning curve and evolved their offerings to perfectly reflect the realities of the region by addressing the diverse pricing and feature needs of the consumer base.”
Looking ahead, IDC expects Africa’s overall mobile phone market to reach 58 million units in Q4 2018, spurred by the festive season and online consumer events such as Black Friday. The introduction of more affordable smartphones in the African market will help drive progress in this space over the coming quarters, while the share of feature phones will decline steadily as the transition to smartphones gathers momentum.
Mobile money to cross borders
Orange and MTN launch pan-African mobile money interoperability to scale up mobile financial services across Africa.
Two of Africa’s largest mobile operators and mobile money providers, Orange Group and MTN Group, today announced a joint venture, Mowali (mobile wallet interoperability), to enable interoperable payments across the continent. Mowali makes it possible to send money between mobile money accounts issued by any mobile money provider, in real time and at low cost.
Mowali will immediately benefit from the reach of MTN Mobile Money and Orange Money, bringing together over 100 million mobile money accounts and mobile money operations in 22 of sub-Saharan Africa’s 46 markets. Mowali is ready to enable interoperability between digital financial service providers beyond MTN and Orange operations and markets, to support the existing 338 million mobile money accounts in Africa.
Mowali is a digital payment infrastructure that connects financial service providers and customers in one inclusive network. It functions as an industry utility, open to any mobile money provider in Africa, including banks, money transfer operators and other financial service providers.
The objective of Mowali is to increase the usage of mobile money by consumers and merchants. Mowali enables money to circulate freely between mobile money accounts from any operators in all countries. From the customer’s point of view, this means “I can pay or receive money anywhere from my mobile account regardless of my operator”. The system will unlock further innovation in the digital financial space within the continent.
For Stéphane Richard, Chairman & CEO of Orange, “by providing full interoperability between platforms, Mowali will provide an important step forward that will allow mobile money to become a universal means of payment in Africa. Increasing financial inclusion through the use of digital technology is an essential element in furthering the economic development of Africa, particularly for more isolated communities. This solution embodies Orange’s ambition to be a leading player in the digital transformation of the continent. By joining forces with another of Africa’s market leaders, MTN, we aim to accelerate the pace of this transformation in a way that will change the lives of our customers by providing them with simpler, safer and more advantageous services. “
“One of MTN’s goals is to accelerate the penetration of mobile financial services in Africa, Mowali is one such vehicle that will help us achieve that objective. Furthermore, co-operation and partnerships that help us accelerate the pace of development and overcome some of the scale, scope and complexity of challenges that society faces are key. This partnership with Orange is therefore an important step in helping us play a meaningful role in supporting the United Nations’ Sustainable Development Goals related to eliminating extreme poverty and enhancing socio-economic development in the markets we operate in and beyond. Thus giving our customers access to a bright, digital future.” said Rob Shuter, Group President and CEO of MTN.
The GSMA supports the Mowali initiative as interoperability at this scale is a key accelerator for both financial inclusion and Mobile Money usability across Africa. “Today, there are over 690 million mobile money accounts around the world. Mobile money services have become an essential, life-changing tool across Africa, providing access to safe and secure financial services but also to energy, health, education and employment opportunities. The creation of Mowali will help to further transform mobile financial services throughout the African region. It demonstrates the mobile industry’s continued leadership and commitment to driving financial inclusion and economic empowerment through industry collaboration. The GSMA is proud to support its development,” said Mats Granryd, Director General, GSMA.
“Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome, in support of financial inclusion. With Mowali, Orange and MTN deliver a solution that will enable them, and other companies, to scale digital financial services across Africa, faster, to everyone—including the poor,” said Kosta Peric, deputy director of Financial Services for the Poor, at the Bill & Melinda Gates Foundation “This is a signal that a new wave of innovation, which can help alleviate poverty and drive economic opportunity, is coming. We’re pleased to see an implementation of Mojaloop—an open source payment platform available to operators across the sector—help achieve that.”